The old song says, ''What a difference a day makes.'' Imagine what 10 years can do. A decade has passed since the housing bubble burst, the stock market took a plunge and the shock heard 'round the world launched unemployment like a rocket. Two years was all that it took to institute lasting changes in the way people looked for work and how recruiters found them.
Technology has led the talent revolution. Better decisions are made through better information. And that's what technology is all about.
Technology matters regardless of where the unemployment statistics sit. When they're low, as they are now, technology helps you continue to source great talent, even though the people you want aren't looking. When it's high, as it will almost assuredly be again one day, it will help you cut through the noise and source more efficiently.
The Recession Triggered High Unemployment and a Sea of Job Seekers
Toward the end of the first decade in the 2000s, the American economy took a sharp and dramatic downturn and the market flooded with job seekers. For companies that needed to hire, there was no shortage of applicants to choose from. The problem was sorting through unqualified candidates to find the best ones.
Investopedia pegs the beginning of the Great Recession in December 2007. It lasted until 2009, but the effects rippled out for much longer. The housing market collapsed, the stock market spiraled down and the crisis quickly left American shores to spread throughout Europe.
America lost 8.7 million jobs, according to the Center on Budget and Policy Priorities. Although the official end of the recession was June 2009, they explain that recovery was slow and arduous.
According to the U.S. Department of Labor Bureau of Labor Statistics, American unemployment was 4.6 percent in January 2007. By December, it had inched up to five percent. The trend peaked in December of 2009 at 10 percent, then slowly inched back down again over the next several years.
Towers Watson says 25 to 34-year-olds had the highest unemployment rate of any other group while the recession was at its worst. The group with the sharpest spike in unemployment was in the 55 to 64 age group, which increased an astonishing 145 percent.
In November 2016, unemployment was finally back to its pre-recession level of 4.6 percent. It's still going down, and the American jobs market is at what many economists call full employment.
While there's no set-in-stone definition of a full-employment economy, experts agree on one thing. When everyone who wants a job has one, the rates can't go much lower and stay there for long. If the rates go much lower than they are now, inflation will probably result and unemployment will rise once again.
When the economy is healthy and people can easily find a job, there's a shortage of active job seekers in the market. The Economist says it leads employers to look at competitors to find the talent they need and tempt them to make a move.
Unfortunately, recruiting in a full-employment economy takes a much different approach than when the market is saturated. That's been the basis for so much upheaval as well as innovation in talent acquisition technologies and strategies. Fortunately, what has emerged will probably benefit HR and recruiters in any type of employment climate that the future can bring.
One of the most challenging issues that emerged during the recession was not just a job shortage, but a job evolution. As the economic recovery took its first baby steps, job recovery was much more complicated. Some of the same jobs didn't exist anymore. In some markets, jobs returned but skilled workers weren't available.
Construction was one of the hardest-hit industries with 1,899,000 jobs lost. Linked to the housing crash that started the recession, those jobs came back slowly. Many of the top skilled workers had long since moved on to another industry by the time construction chugged back to life again. People who were available for work didn't always have the right skill set. Recruiting strategies became critical for filling roles that were once as easy as posting a no-frills ad.
Construction wasn't the only area that took a serious hit. Other industries with significant job losses:
- Durable goods lost 1,606,000
- Professional and business services lost 1,489,000
- Retail trade lost 1,134,100
- Financial activities lost 628,000
- Nondurable goods lost 541,000
The only markets that grew during the recession were education and health services, and government.
The Recession-Era Job Market Ushered in Lasting Changes
As the job loss effect of the recession took hold, some industries found that qualified employees still weren't easy to find. Although job candidates were plentiful, other problems were brewing.
One job ad could garner a multitude of applicants. While that seems like a great problem to have, it can also slow time-to-hire and reduce quality-of-hire, as well. And when quality-of-hire goes down, turnover goes up and so do costs.
One of the biggest changes that recruiters learned to manage was the employment gap. There was a time when a gap could be a deal breaker. Recruiter.com says they're not as surprising anymore. According to Career Builder, 85 percent of employers accept employment gaps, at least as long as the time was used productively. School is a good excuse for a gap in employment.
Another change is the volume of low-wage jobs that persist. During the recession, middle-management jobs faded away. After the recession, employers haven't rushed to replace them. The National Employment Law Project reported in 2012 that low-wage jobs grew much faster than mid- and high-wage jobs. Recruiter . com says that's still the case.
Technology for better recruiting strategies was still in its infancy as the economy started to recover. Post-and-pray was common. Job boards were inundated with resumes and active job seekers.
Recruiters needed a way to sort through all of the noise. That's when the bright idea of digging in deep to analyze hiring data took root.
Information analytics isn't new. Forbes says it can be traced back to at least the 1940s when it was known as an ''information explosion.'' What is new is the way that it's collected and managed now.
In the early 2000s, digital data was already collected and analyzed. Where there was activity, there was data. And where there was data, it could be analyzed. And where it could be analyzed, recruiters could learn about the past to make better decisions in the future. Undercover Recruiter says data is responsible for helping recruiters take the leap from "I think" to "I know."
As the Economy Recovered, New Problems Emerged
Jobs returned with the improving economy and more people went back to work. But hiring had changed. That's partly because the attitudes of people in the workforce changed first. Qualified candidates were much harder to find than before because they were going back to work. Recruiters threw nearly every noodle of sourcing spaghetti at the wall to see what could stick. Those trial-and-error days brought about some pretty amazing revelations.
- Job candidates can survive on their own without the help of a recruiter. Painful, but proven true throughout the recession.
- Most candidates are passive. They need a genuine reason to care.
- Most employees are open to a new opportunity elsewhere.
- Trendy perks such as a free food and cleverly designed workstations don't breed loyalty.
- Millennials aren't really entitled, hard to please or immature; they're working with a different set of values as their predecessors.
- The younger the worker, the more likely they'll respond to an employer brand that meshes with their personal values. They're also more likely to sever ties with an employer whose company values conflict with their own.
- Job postings have to capture a candidate's attention, both in content and in ad placement. If a candidate isn't looking, where will you find them?
Loyalty in employees doesn't really exist anymore. While the recession hurt a great many Americans, it also brought about an entrepreneurial spirit with more people in charge of their own career. A lack of loyalty isn't as negative as it might sound.
At-will employment put the ball in the employer's court for years. Employees are in the game now with the understanding that they can leave if it's in their best interest to do so. And that opens up new opportunities for recruiters.
A great many things changed during the recession. Many people who worked in industries such as construction found a different way to earn a living. The gig economy was also born of the recession. As workers found less and less to rely on in the job market, they learned to carve out their own path.
Instead of taking a full-time position with one company, they became the architects of their own careers with consulting, part-time and other ''gig'' type work opportunities. They survived independent of any permanent employer. That's the angle that recruiters can capitalize on now. There might not be as many active job seekers on the market. But with new strategies and technology, you can go directly to the source. The candidates you do find are more likely to be of the quality that you need.
Technology Drives Sourcing in the Post-Recession Era
The biggest challenge for talent acquisition now is finding more of the right people. But that's only one of several problems.
You also need:
- Better job candidate lead generation strategies
- Qualified people who are handy when you need them
- Job candidate engagement strategies to keep them interested
- Employees who are more likely to stay with the company longer
- Better use of your talent acquisition budget
- Effective ways to map success so you can predict it next time
Technology is the driver of success now. That's why there's been such an innovation surge. With data analytics at the core, you can get better results at nearly every level.
Because job applicants don't fall from the sky anymore, talent acquisition has switched gears to focus on lead generation much the way that marketing and sales operate. Technology can make targeted recruitment marketing a reality. You can find and mine better sources for better-qualified leads.
With those leads in the talent acquisition funnel, you can nurture them and keep them engaged. That way, they'll be there when you need them. That's much more efficient than sourcing from the ground up every time. Technology also helps you identify signs of a lead that's about to bail out, which lets you act before they disengage.
Predictive analytics is a real game-changer for the talent industry, says Undercover Recruiter. The technology that you use every day collects and analyzes data. That data helps you see in advance how your decisions will most likely play out, which is a boon for your budget spend. You can devote less to ''I think'' and more to ''I know.''
What's more, artificial intelligence learns from everything that you do so decision making gets better over time. When you put it to work, it can make some decisions and take some actions for you. That frees up your time for tasks that need your personal attention.
Technology isn't just important in a full-employment economy. Nothing-good or bad-lasts forever. Next year could bring a shakeup.
Bloomberg cautions that extremely low unemployment isn't always sustainable and has historically been followed by a bust. Recently, unemployment in 1999 and 2000 was low. Then the tech bubble burst. With a Democratic election wave likely at midterms in 2018, the effect on the economy is anyone's guess.
Whether or not next year is still booming, the technology and strategies that you use and develop now will still work. Targeted recruitment marketing reaches more of the people you want. It can help cut back on unqualified applicants. A working talent acquisition funnel lets you cast wide to bring in viable candidates for any job that comes available. If you're always sourcing, you've always got an opportunity to find the next great future employee.
Everything that you do now will help your talent acquisition efforts in the future, whether the American economy is at full employment or not. Technology helps you predict the future based on the past. And that helps you source better for one key role and build a talent funnel to dip into for any job opening that arises.
If technology for the talent industry matters to you, check out our webinar: The Emergence & Impact of Programmatic Advertising on Recruiting and learn more about it.