Strong Job Growth Expected to Continue in the New Year
Last year’s hiring forecast showed the strongest outlook since 2006. This year, the trend of strong growth and confidence will only continue. Employer confidence is widespread, with more than one-third of employers planning to add full-time, permanent staff this year, according to CareerBuilder’s 2016 job forecast.
It is becoming more apparent to employers that, as competition for in-demand workers tightens in various fields, they will need to adjust their recruitment efforts to keep up with labor market trends and the demands of a more in-control workforce.
In addition to showing positive signs in terms of growth for both permanent and temporary hiring, this year’s forecast brought to light five key employment trends that will emerge in 2016, several of which are tied to higher competition for talent, innovation in sourcing and developing high-skill workers, and a push for more diversity in leadership.
Full-time and temporary hiring all to increase
Thirty-six percent of employers plan to increase full-time, permanent staff in the coming year, on par with last year’s strong numbers. Looking at specific industries, financial services and information technology have already been experiencing accelerated growth, and are expected to outperform the national average – at 46 percent and 44 percent, respectively. Manufacturing (37 percent) and health care (36 percent) are expected to mirror the national average.
Temporary and contract employment is also projected to pick up in 2016, with 47 percent of employers planning to hire temporary or contract workers, up slightly from 46 percent last year and 42 percent in 2014. While temporary and contract employment enables employers to maintain flexibility in their workforce, it also enables them to fill in-demand roles on a short-term basis while they look for more suitable replacements.
Solving the skills gap at home
The skills gap continues to be a pain point for the majority of employers. Sixty-three percent are concerned about the growing disconnect between the skills they need for their organizations and the skills candidates possess. Meanwhile, nearly half (48 percent) say they have extended vacancies within their organizations. In an effort to address these challenges, many are taking matters into their own hands. One in 3 employers (33 percent) say they plan to hire low-skill workers and invest in training them for high-skill jobs at their organizations this year.
Positions tied to revenue growth, innovation and customer loyalty will also see a surge in full-time, permanent hiring in the New Year. Customer service (32 percent), information technology (29 percent), sales (27 percent), production (24 percent) and administrative (20 percent) jobs top the list of areas for which employers plan to recruit the most in 2016.
Salaries to increase for new, existing employees
It’s no secret that money is one of the most influential factors when it comes to attracting and retaining workers. So it should also come as no surprise that, given the higher competition for high-skill candidates, employers are planning to increase their compensation offerings this year. Eighty-three percent of employers plan to increase compensation for existing employees – on par with 82 percent last year – and 66 percent will offer higher starting salaries for new employees, up from 64 percent last year.
While wage growth has been slow since the end of the recession and continues to be gradual, our findings indicates that we may see an uptick soon, particularly as employers adjust their compensation strategies to compete for in-demand, highly skilled talent as well as entry-level positions. Workers are gaining leverage; however, the money employers invest in finding the right talent now will save them money in the long run, helping them avoid costs associated with bad hires, lost productivity and long-term vacancies.
Recruiting the next generation
For several years now, filling positions in STEM-related fields (science, technology, engineering and math) has been an ongoing challenge for employers. In many cases, the skills employers need are not being cultivated in the labor market today, which causes workers and companies alike to miss out on realizing their full potential.
In effort to encourage the next generation to pursue STEM-related fields and other in-demand areas, employers are building relationships with students at an early age. Twenty-five percent plan to hire high school students as interns over the next 12 months.
Recruiting beyond U.S. borders
Employers will continue to look at talent pools outside the U.S. to help fill labor deficits. Nearly 1 in 5 (19 percent) say they will hire workers with H-1B visas in 2016, which will enable them to employ temporarily foreign-born workers for specialized occupations.
There continues to be debate around whether the U.S. should be importing workers to fill high-skill jobs, or investing in educating the labor pool that already exists on our shores. An earlier survey we did showed that employers who support raising the cap on H-1B visas believe that doing so will help decrease the skills shortage in the country and increase progress in STEM-related fields, among other benefits encourage
Prioritizing diversity in leadership roles
Another trend to watch for in 2016 is the diversification of demographics in organizational leadership. Like the population as a whole, the U.S. workplace is becoming more diverse overall. At the same time, there remains a lack of diversity in executive and leadership positions. Diverse organizations are shown to be more innovative, more inclusive, and better positioned to capitalize on an ever-changing consumer marketplace. A diverse leadership team can only strengthen these factors, and our forecast indicates that more employers recognize this.
Fifty-five percent of employers plan to hire or promote more women for management roles, and 53 percent plan to do the same for diverse workers. Forty-seven percent of employers plan to promote workers under the age of 30 into management roles.
2016 and beyond
On average, the U.S. has added 200,000 jobs each month over the last two years, and we expect 2016 to produce similar results, if not better. After several years of frustratingly slow growth, the job market – now back to pre-recession numbers – is showing signs of strong, consistent growth. Employers and job seekers alike should feel optimistic about these findings and what they mean for opportunities moving forward.