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Strong hiring equals more workers coming off sidelines

October's Bureau of Labor Statistics report shows a remarkable rise in wage growth. The best surprise may be that more people, especially women, are rejoining the workforce.
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As the United States economy continues its upward job growth and employers have more job openings than skilled candidates, there is a question of whether the country has indeed reached “full employment.” The latest jobs report from the Bureau of Labor Statistics suggests employers are bringing in more people from the sidelines.

Employers added 250,000 new nonfarm jobs to payrolls in October while the unemployment rate stayed unchanged at 3.7 percent. While average wages showed a 3.1 percent year-to-year gain — a welcome sign in a tightening labor market and the largest rise since 2009 — increases in the employment-population ratio and labor force participation rate gave economists something else to cheer about on jobs day.

LinkedIn Chief Economist Guy Berger said that the strong hiring number and wage growth would get the most attention, but the rise in employment-population ratio for prime-age Americans made him the most “excited.” According to Berger’s post, the share of employed prime-age workers 25-54 hit 79.7 percent last month matching the rate just before the Great Recession.

In other words, the U.S. economy’s record-setting streak of job growth over the last nine years has finally brought the labor force back from this generation’s worst economic disaster. Despite reports of employers complaining about difficulties in filling the more than 6 million job openings, there is still slack in the labor market and room for more workers in the booming economy.

“We’re still at least two years away from matching late 1990s levels. In other words, I would take claims of ‘we’re at full employment’ with a grain of salt,” Berger wrote.

Indeed.com Research Director Martha Gimbel broke down the employment-population ratio down by sex which showed that prime-age women outgained men in joining the workforce 1.2 percent to 0.5 percent. Women, who experienced a long-term decline in labor force participation after 2000, are making up ground and re-entering the labor market at a faster rate, drawing the notice of New York Times reporters Ben Casselman and Patricia Cohen. Cohen reported that 1.4 million women joined the workforce over the past year while 845,000 men did.

A Wall St. Journal report from October cited the decline of middle-skilled jobs as the reason why women were falling behind. The WSJ said that with jobs aplenty and rising wages, the trend is reversing.  However, “headwinds” for increased female employment remained in the form of retirements and child-care expenses.

Low-wage working women, especially ones without high school diplomas, are returning but are forced to decide between expensive private child-care and work. Companies that are hurting for high-skilled workers are offering better benefits like paid family leave. The story is not the same, however, for low-wage workers, the WSJ reported.

With the BLS number of unemployed workers staying put at 6.1 million, employers should focus more on re-skilling and retraining in addition to raising wages and benefits. A move to skills-based hiring can also level the playing field for workers who may not have the right credentials, but the skills that employers need or the aptitude to build upon their skill set.

The expansion of the Skillful network to Indiana is one sign that “forgotten workers” in America’s heartland are getting the notice they deserve. Instead of basing job requirements on college degrees and credentials, Skillful is working with state governments and employers to change the focus to skills. Job seekers, in turn, can use Skillful to learn about credentials and where to get the training to obtain them.

While economists are cautioning a potential slowdown in economic growth due to the end of the fiscal stimulus caused by the Trump tax cuts and the trade wars with China and Europe, it’s heartening to see that the record-setting streak of job growth is continuing.

There are still untapped talent pools out there for employers to find and develop. If they have the will to train new workers or align with governments and educators to improve workforce development, then there is a reason to believe that the economy has room to grow and “full employment” is something to look forward to, not something that has already happened.

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Dana Beth Ardi

Executive Committee

Dana Beth Ardi, PhD, Executive Committee, is a thought leader and expert in the fields of executive search, talent management, organizational design, assessment, leadership and coaching. As an innovator in the human capital movement, Ardi creates enhanced value in companies by matching the most sought after talent with the best opportunities. Ardi coaches boards and investors on the art and science of building high caliber management teams. She provides them with the necessary skills to seek out and attract top-level management, to design the ideal organizational architectures and to deploy people against strategy. Ardi unearths the way a business works and the most effective way for people to work in them.

Ardi is an experienced business executive and senior consultant who leverages business organizational transformation through talent strategies. She uses her knowledge and experience to develop talent strategies to enhance revenue and profit contributions. She has a deep expertise in change management and organizational effectiveness and has designed and built high performance cultures. Ardi has significant experience in mergers, acquisitions, divestitures, IPO’s and turnarounds.

Ardi is an expert on the multi-generational workforce. She understands the four intersecting generations of workers coming together in contemporary companies, each with their own mindsets, leadership and communications styles, values and motivations. Ardi is sought after to assist companies manage and thrive by bringing the generations together. Her book, Fall of the Alphas: How Beta Leaders Win Through Connection, Collaboration and Influence, will be published by St. Martin’s Press. The book reflects Ardi’s deep expertise in understanding organizations and our changing society. It focuses on building a winning culture, how companies must grow and evolve, and how talent influences and shapes communities of work. This is what she has coined “Corporate Anthropology.” It is a playbook on how modern companies must meet challenges – culturally, globally, digitally, across genders and generations.

Ardi is currently the Managing Director and Founder of Corporate Anthropology Advisors, LLC, a consulting company that provides human capital advisory and innovative solutions to companies building value through people. Corporate Anthropology works with organizations, their cultures, the way they grow and develop, and the people who are responsible for forming their communities of work.

Prior to her position at Corporate Anthropology Advisors, Ardi served as a Partner/Managing Director at the private equity firms CCMP Capital and JPMorgan Partners. She was a partner at Flatiron Partners, a venture capital firm working with early state companies where she pioneered the human capital role within an investment portfolio.

Ardi holds a BS from the State University of New York at Buffalo as well as a Masters degree and PhD from Boston College. She started her career as professor at the Graduate Center at Fordham University in New York.