October was a resilient month for the U.S. job market. Despite rising interest rates, employers added 261,000 jobs by month's end. In fact, no single sector saw a decline in jobs at all.
Manufacturing continues to be the big winner, adding 32,000 jobs in October. It's the continuation of an already-historic resurgence, with the sector now enjoying 137,000 more jobs than it did before the pandemic. Notable gains occurred in durable goods manufacturing which accounted for 71 percent of all jobs added. That change was driven, in part, by major monthly swings in industries like:
- transportation equipment (+5,000 jobs)
- computer and electronic products (+5,000 jobs)
- fabricated metal products (+5,000 jobs)
Contributing to the rosy outlook is the still-low unemployment rate. While unemployment did increase to 3.7 percent, that's still right around its historic low, indicating that all these new opportunities are translating into employment for many job seekers. Of course, it also means that if job creation remains as resilient as it has, then employers may struggle to find talent.
the labor market remains tight
Wages continue to rise. Average hourly earnings increased by 4.7 percent in the year through October. That's slightly less than September, but still above the average three percent gains from before the pandemic.
"Demand remains solid, the labor market remains tight," said Federal Reserve Bank of Richmond president Thomas Barkin, adding "That means there's still more work to do." Indeed, the labor force participation is still below where it was just before the pandemic. In October, the amount of prime working age Americans looking for work went from 82.7 percent to 82.5 percent, and the overall share of workers and job seekers fell to 62.2 percent.
what employers can do
Interest rate hikes have yet to stem the tide of job creation, meaning challenges around finding talent are still present for employers. Consider these tips to circumvent the candidate shortage.
keep compensation competitive
Compensation is still your best bet to secure top talent. It's also the easiest to implement. Consult a reputable salary guide to ensure your pay rates are competitive for your market, and check data regularly to keep them competitive in the face of inflation.
The shortage of experienced talent on the market means you can't afford to fall behind on pay in the current climate. Fifty-two percent of employees want their employers to increase their salary beyond standard annual raises, and 45 percent want their companies to provide monthly pay boosts just to overcome the rising cost of living.
perks beyond pay
While improving compensation should be at the top of the list, it's not the only factor that matters to today's job seekers. Randstad's Workmonitor 2022 report found that:
- One-third (34%) of employees said that they wouldn’t mind earning less money if they felt that their job was preventing them from enjoying their life.
- Nearly half of workers (41%) wouldn’t mind earning less money if they felt that their job was positively contributing to society.
Competitive pay combined with perks to address these concerns will provide the most bang for your buck, but prioritizing these two areas can also help employers with limited budget flexibility stay competitive. To help employees achieve better work-life balance, employers should consider flexible working arrangements. For roles where it's feasible, that means offering remote or hybrid work, but it can also take the form of four-day work weeks or flex scheduling. Whatever the right choice is for your workplace, the solution should be centered on helping employees fit work around their schedule to prevent burnout and foster optimal conditions to support performance.
Even for roles that don't have an overt impact on society at large, focusing on employer values can help workers feel as though they're contributing to something good. By and large, today's employees want to work for employers who share their values, either in how they do business, the impact they make on their communities or the social causes they choose to champion.
the bottom line
It's a great testament to the strength of U.S. employers that despite less-than-favorable market conditions, job creation marched on largely undeterred. However, it's also a double-edged sword for employers. With labor force participation remaining low, finding qualified talent to fill all those openings remains a challenge.
Focus on keeping pay rates up to date, providing flexible working arrangements and aligning on employee values to stay competitive for top talent. For more talent attraction and retention tips to guide you through the end of the year and beyond, visit Randstad's Business Insights page.