Senior Client Partner, Workforce Transformation Practice Leader
The Job Market Still Rocks as the Great Resignation Still Rolls
Stocks are reeling. Inflation is soaring. A recession is looming.
Neither employees nor employers seem to care.
According to the most recent reports, a record 4.5 million US workers quit their jobs in March. Firms enticed many of those quitters with new opportunities. US firms added 428,000 new non-farm jobs in April, and the nation’s unemployment rate remains near a historic low at 3.6%. The US job market has now recovered all the jobs lost during the worst part of the COVID-19 pandemic in 2020. “Even if things are slowing down, there are still too many talent holes,” says Elise Freedman, leader of Korn Ferry’s Workplace Transformation practice.
The number of people quitting wasn’t the only job-related record in March: as of that same month, firms had posted 11.5 million job openings, another all-time high. But analysts say that the job market might eventually start to cool as the Federal Reserve raises interest rates, or as supply-chain struggles and the war in Eastern Europe curtail economic growth. The big question in the minds of many corporate executives is how to deal with a present-day talent crunch while a recession is looming, says Don Lowman, global leader of Korn Ferry’s Total Rewards practice.
For the past year firms have been dealing with it by handing out big offers or counteroffers, or just scouring the same places for more people. Companies should take the tight job market as an opportunity to find talent in underrepresented areas, says Andrés Tapia, Korn Ferry’s global strategist for diversity, equity, and inclusion. Some firms have already begun to do just that. Unemployment for Blacks is now at 5.9%, a drop of 3.9% since April 2021, while Hispanic unemployment dropped to 4.1%, a decline of 3.4% over the same time period.
But experts say firms might want to step back and assess what skills they are actually missing, instead of how many people they need to hire. Digital transformation is rapidly making some jobs obsolete. Yes, some high-level technical skills are in particularly scarce supply, but call-center employees could be reskilled to handle more digital-centric roles, says Kristi Drew, Korn Ferry’s global account leader for the financial services practices. “It’s an opportunity to be creative and look at things differently,” she says. I“It’s an opportunity to be creative and look at things differently,” she says. Generally, companies should be identifying their most agile employees (regardless of age or experience level), helping them to develop their skills, and transferring them into key positions that need to be filled, says Miriam Nelson, Korn Ferry senior client partner in its Assessment and Succession Solutions business.
This reassessment might be difficult for corporate leaders who have built their careers—and vast HR systems—on the idea that companies have a very rigid job architecture, Freedman says. Instead of thinking “How do we fill that job?”, companies should be thinking, “How do we develop this capability?” “This capabilities era scares some people,” she says.