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2017 4Q Hiring Trends Show Signs of Optimism and Challenges

2017 4Q Hiring Trends Show Signs of Optimism and Challenges

This summer and early fall, the demand for talent has been very high on the Southside of Indianapolis and surrounding area. The unemployment rate in the area is around 3% as of September, down from 3.4% in August. This is the lowest it has been in years. I have been getting lots of questions asking about what I am seeing as we move into 2018. I thought I would share some insight from the recent national Express Employment Professionals Job Insights Survey for the 4Q. The report leaves me optimistic about the future but also nervous as it seems to be a constant battle for local employers to find good people.

Optimistic about the economy
Business is growing and demand seems high. The majority of respondents reported that they expect to see an upward trend in hiring, or at least maintain the status quo. Only 11% of businesses expect their employment activity to trend downward in the 4Q of 2017.

Up slightly since the beginning of 2017, 45% of respondents said they expect business to trend up, followed by 44% who believe their hiring activity will stay on par with current levels. In fact, these statistics have remained relatively consistent throughout 2017 which leads me to believe that 2018 should continue with a strong local economy as we move into the New Year.

The most robust hiring activity this year has been in the “general labor” segment, followed by skilled labor (industrial), and administrative/office clerical. And perhaps the most optimistic statistic heading into 2018, 92% of respondents did not plan to eliminate positions in the 4Q—which is up from 86% in 4Q 2016.

Despite optimism, qualified candidate pools continue to dry
Across most industries, there are jobs to be found. However, candidates with the skills to fill in-demand positions are becoming fewer and far between. Attracting and retaining top performers continues to be one of the highest priorities for businesses.

The Job Insights Survey revealed that more than 70% of businesses say it is “somewhat” or “very” difficult to recruit for and fill positions, with the top three reasons jobs go unfilled including lack of applicants with experience, lack of applicants in general, and lack of applicants with hard skills.

Some wage growth locally but still slow
Wage growth is often a barometer for the health of the overall economy. Locally as the labor market has tightened, I have seen the average wage grow 7% over the same time last year with local clients.  I see this trend continuing as employers are seeing the need to increase wages to hold on to and attract the talent they need.

The challenges that come with a strong economy and tight talent market can be maddening at times. I have been fearful that the difficulty in finding good people for businesses would really slow the economy but so far the growth has continued even as the labor market tightens. I have also been pleased to see companies that are taking steps to improve the engagement and retention efforts to help make their workplace as attractive as possible.

This article is written by Mike Heffner, the owner of the local Greenwood Express Employment Professionals franchise.  Contact Mike at Mike.Heffner@expresspros.com, @IndySouthMike on Twitter or visit ExpressIndySouth.com.