Lately, I've been noticing signs posted everywhere with employers looking for employees. Every corner I turn I see them at fast food, department stores, repair jobs, and the like. Doesn't it seem like suddenly there is a shortage of employees everywhere? Am I the only one that has noticed this or is there only a need for employees in my small suburban midwest community? I doubt it.
From what I hear, it sounds like there is a definite shortage of qualified employees, and the employers are at a definite disadvantage. As I see all these signs posted around town its got me thinking. Thinking of why? Thinking of why all of a sudden? Thinking of what will the effects be? Thinking of how can I capitalize? Here are a few of my theories and answers to take a stab at answering those questions.
- Babyboomers – a lot of babyboomers are starting to retire, and it is leaving a gap in employees to service ratio that needs to be filled.
- Employee Turnover – with how many businesses are hiring it is encouraging people that are already employed to shop around for higher paying jobs and/or with better benefits. As a result, employee turnover is a vicious cycle that is making the entire market place more competitive and makes it harder to keep your best employees
- Higher quality/paying jobs are hiring – if higher skilled jobs are paying for entry level workers, then that is attracting lowered skilled workers away. Consequently, there is glutton of lower paying jobs available and only adds to the already existing employee turnover
- Prices are increasing – regardless of what the government tells us, there is a big increase in the cost of goods and services! This inflation, pushes people to capture higher wages or take on additional side jobs. If you are on a slow and steady salaried job, then it will either make you find a different job, ask for an increase at your existing job, or take on additional part time work.
Why all of a sudden?
- Low cost borrowing – with the Federal reserves long term low interest rate polices, then it is causing more services to be rendered for goods to be delivered. This is like a hidden tax on all of the economy, but has been mounting since early 2009.
- It's the economy stupid! – the economy has been improving! Duh! If you believe this theory, then the increased employee demand will increase the cost of supplies and services. Thus if people perceive the economy as good, then it'll increase their demand to purchase.
What will the effects be?
- Higher pay – it's a classic case of supply and demand! With more employers chasing fewer eligible potential employees, then its going to cause pricing of those services to be pushed higher. As a result, employers aren't going to just swallow those increased costs, but that'll result in higher prices of goods. It's a vicious cycle!
- More turnover – as employees realize that more things are costing more, then it'll put a pinch on their family's financial picture. Thus employees will go elsewhere to find a higher wage, and result in higher turnover of employees, which may result in fewer employees staying with employers for a lifetime. Less dedication to an particular employer.
- INFLATION! INFLATION! INFLATION! – with back and fourth tug-a-war between dollars chasing services and good, then the net result will be inflation!
- Increased debt – if people aren't willing to take on a higher wage or additional work, then some people will choose to fill the gap between wages to expenses with debt. Thus compounding our nations low savings rate and possibly pushing us into negative savings.
How can I capitalize?
- Keep a pulse on the job market – it is always good to have a pulse on how hot or cold the job market is and what equivalent jobs are paying out in the market place. This will help you know if you are getting paid a fair wage, and may be a way to negotiate your salary higher.
- Decrease my debt – with how everyone else is seeking to increase their income to keep up with their spending, then now would be a good time for me to swim against the stream! Fight off debt and fast! This will put me in a lot better position when (not if) the economy tanks, and might allow me to take advantage of some extreme values.
- Make sure my existing employer knows my value – be sure to (humbly) let your employer know the value you are bring to the workplace, and how you are worth your weight in gold. This continual feedback will make it easier to negotiate a raise, and will make you more attractive when a promotion becomes available. Keep fighting!
- Take on some additional work – with all these employers wanting more employees, then try and capture some additional work beyond the typical 40 hours you work. This will help your overall financial picture and help you get out of debt.
Anyhow, these are just a few of my theories as I've seen a lot of employers posting “Now hiring” signs and a few of my thoughts. Has anyone else noticed this lately? I'd like to hear your thoughts on why so many employers are hiring, are you experiencing a employee shortage in your area, and what are you doing about it?