A massive change is afoot in the employment marketplace.
In November 2018, the U.S. Department of Labor released JOLTS (the Job Openings and Labor Turnover Survey), which found there were over 7.1 million U.S. job openings in August and 902,000 more openings than unemployed workers. Both were new records. Then, the October Jobs Report showed unemployment at 3.7 percent—a 50-year low—and average hourly earnings grew by 3.1 percent, the best year-over-year gain since 2009.
This data is scary for companies battling over a smaller talent pool, but it doesn’t tell the full story of an enormous shift underway in the employment marketplace: power is flowing away from employers and to workers. All-time-low unemployment and 10-year-high wage growth puts pressure on hiring companies. But these metrics have seen similar levels in the past, so what’s different today?
Transparency and Connectivity For Workers
Two factors have unprecedented effects on the employment marketplace power dynamic:
- Pervasive social networks democratize workplace information access for job seekers and employees.
- Growing personal compute power creates option value for workers.
Social platforms have driven workplace transparency to all-time highs. Before Glassdoor and LinkedIn gained widespread adoption, companies could attract and keep workers even with weak management, limited growth opportunities or toxic culture. Today, if a company is a bad place to work, the world knows instantly. Workers can quickly broadcast their experiences, and job seekers have more research tools and data than ever. To attract and retain talent, companies must actually be great places to work. Workplace transparency is the new normal.
A mobile device with persistent high-speed connectivity in everyone’s pocket creates worker option value. Before this widespread individual computing power, job seekers could only circle classified ads in the newspaper. Unhappy workers were often stuck. Today, with dozens of job search engines and marketplaces (Indeed, ZipRecruiter, Monster) and the rising gig economy, workers can find and apply to roles in minutes. With more alternatives for gainful employment, workers are no longer beholden to companies.
All-time-low unemployment, accelerating wage growth, all-time-high workplace transparency, all-time-high worker option value—considering all these trends together, it’s clear we are living in a new era of employment: the age of the employee.
Employee-First As A Kingmaker
To navigate this power shift, companies must change how they think about talent. Just as many world-class companies today were built around a customer-first mindset, the dominant companies of the coming years will be forged on an employee-first and candidate-first mindset. For many leaders, the misguided instinct is for this responsibility to fall to people ops, human resources or talent acquisition teams. But for true change to occur, “candidate-first” and “employee-first” must become a companywide initiative.
Companies that have thrived due to a customer-first mentality have not been successful solely because of the marketing team’s work. True customer-centric thinking elevated to the level of company vision, mission and purpose. To achieve this requires getting buy-in from leadership and infusing this mindset deliberately into every function within an organization. Employee-first is no different.
HR Can Borrow From Marketing
The employment marketplace power shift demands the attention of company leaders. HR should use the power shift to amplify the need for a candidate- and employee-first mindset. What then can HR do once it has organizational buy-in? It turns out the same data-driven frameworks marketers have used for years to drive customer value can be applied by HR leaders to drive value for job seekers and employees. Two broad examples come to mind:
- Customer experience/customer journey
- Content marketing
Consider how marketers seek to delight customers at every step, nurturing them from awareness to interest, desire and action. HR teams can do the same with candidates and employees. Capture and evaluate data. Define common segments and understand their traits. Create personas. Map out journey stages and touchpoints for each persona. This will get the entire organization solving for how to delight its people—from first employment brand awareness to application, interview, offer, onboarding, training and growth.
With content, marketers began to address the need to move beyond transactions to sustained customer relationships. You can’t constantly ask your customers to buy. And not every customer is ready to buy at the exact moment a brand decides to communicate. So, marketers figured out other reasons to communicate and ways to give value so that when customers are ready to buy, they show loyalty to the brand that’s already given to them.
Talent acquisition teams can do the same. Create a passive talent community. Give that community advice and tools, not just job openings. Address what they care about—their own career, how to interview, how to grow. Personalize it. The more gifts of insight you give and more personal you make your content, the more goodwill and reciprocity you accrue. And when the candidate or employee is ready to apply or advance, your employment brand will benefit from the loyalty you’ve already created with them.
It’s undeniable that a massive power shift is happening in the employment marketplace and that we’ve entered the employee-first era. Companies unwilling to adapt to the shift will stumble. For business leaders who embrace this change, I see opportunities to create dominant employment brands that will thrive in the coming years.
The views of the author of this article do not necessarily represent the views of Gradifi. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Readers should consult their own attorneys or other tax or financial advisors to understand the tax, financial and legal consequences of any strategies mentioned in this article.