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June 23, 2016 / Stephanie Anderson

Women in the draft take equality to new heights

Women today are encouraged to lean in, fight for equal pay and break glass ceilings. This is easier said than done, as challenges remain in many industries. One unlikely institution, however, is breaking the mold by offering equal pay and equal opportunity to all genders and ethnicities: the U.S. military.

First, Defense Sec. Ash Carter announced last year that he was opening all combat jobs to women. Women no longer face restrictions regarding where they can serve and what they can do. The sky is the limit, military ladies.

Next, just last week the Senate voted to approve a bill that included an amendment requiring women to register for the Selective Service. Currently, men ages 18–25 are required to register, yet women are not. Though the U.S. hasn’t had a draft since the Vietnam War, registration of both men and women would dramatically increase the number of people in the Selective Service System.

While the bill still has a long way to go before becoming law, opponents are already speaking out. I am baffled by the double standard. If women want equality, it can’t be situational. We already live in a world where that’s the case, and it’s what we’ve been protesting for generations. We must demand equality and fully embrace what that means — both the good and bad, from the boardroom to the battlefield.

As a female veteran of the Air Force Reserve, the training, experience and educational benefits I received have been invaluable. I know I will support and encourage my two young daughters to serve, should they decide or be required to do so. I believe this amendment and Defense Sec. Carter’s decision set a healthy precedent that could encourage more women to join the military. These developments are important in terms of equality, responsibility and unity.

Equality: If women want to be treated equally to men, we should expect to serve equally. Requiring women to sign up for Selective Service removes yet another difference between genders. Plus, though women are still a minority in the military, it is one of the few “employers” that actually provides women equal pay to their male counterparts.

Responsibility: Protecting our country is everyone’s responsibility. Whether or not you agree with the military’s mission, you benefit from the safety and security it provides in the place you call home. Plus, the Selective Service has an Alternative Service Program available, if you identify as a conscientious objector should another draft occur.

Unity: Having to register for the draft when of age would become a common experience, and I believe it would increase unity throughout populations. We live in a diverse country. The nation is a melting pot of different religions, heritages and viewpoints. However, most people feel the country is more divided than ever before (simply check out 2016 election coverage for an example). Wouldn’t it be great if we could rally around a common mission?

Equal pay and plentiful opportunity? The tides are changing for women’s equality, and the ladies leading the way are proudly wearing a U.S. military uniform.

June 14, 2016 / Molly Moseley

Adult Internships: A Growing Trend for Career Changers

Photo by Francois Duhamel – © 2014 Warner Bros. Entertainment Inc. and Ratpac-Dune Entertainment LLC. All Rights Reserved.

Do you remember the Friends episode where Chandler takes an internship at an ad agency? Older than the other interns, they initially mistake him for senior management by quickly offering him coffee and calling him “sir.” Although his supervisor is two years younger, he uses the experience to jump-start a new career — and of course plenty of comical moments ensue.

If you watched this episode on its first run, your age makes his experience even more relatable. Most people think of high school seniors and college graduates when it comes to internships. The idea of an older intern is generally enduring and funny, as shown in recent Hollywood movies like Anne Hathaway and Robert De Niro’s The Intern.

But for many people, taking an internship at an advanced age is no joke. Some professionals give up their careers to move in order to prioritize a spouse’s professional endeavors. Others exit the job market to have or care for children. When it comes time to hop back on the career bandwagon, it can be a struggle to get noticed. It’s not much easier for career-changers.

Fortunately, more companies are realizing the value of having adult internships that focus on these demographics. This includes SMBs like Wunderlich Kaplan Communications, which started an Enternship program to assist women over 40 who want to re-enter the workplace. It also includes Fortune 500 companies like Goldman Sachs and their Returnship Program, which helps professionals restart their careers.

If you’re looking for valuable experience to change careers or re-enter an industry, an internship might be a good option. However, not any internship will do. It’s important to be selective, and ideally you’ll get paid. When applying, be honest about your history, employment gaps and reasons for pursuing the job. Look for options that are flexible so you can maintain other commitments, such as another job or family obligations. Make sure the internship has the responsibilities you desire so it’s a good use of both your time and the company’s.

Hopefully an internship will lead to full-time employment, but that is never a guarantee. Adopt the mindset that you’ll be getting good experience that you can add to your resume to make you more marketable. Plus, never forget the value of networking while interning. The contacts you make and references you earn while working are invaluable.

Still unsure about an adult internship? There are other alternatives that can help older professionals. If you have an impressive record of professional experience, you may qualify for a temp job in your focus market. Be prepared to explain how your skills can transfer into the new position and convey your enthusiasm as much as possible. Additionally, volunteering at a nonprofit in an area of interest may not be paid, but can provide fantastic experience and networking opportunities.

What other options are there for people looking to change careers or re-enter the market after an absence? Please add your ideas in the comments.

June 10, 2016 / Brad Squibb

ATS options by industry: Which systems companies use most

An estimated 90 percent or more of large companies use applicant tracking systems to help manage hiring efforts. By automating many parts of the application and evaluation process, the right ATS helps companies save incredible amounts of time and money.

The challenge for companies is, of course, to find the right system. There are hundreds of options available to suit different industries, objectives and price points. What are the most popular systems and what types of companies are using them?

The analytics experts at LinkUp decided to dig in to uncover the answers. After researching LinkUp’s unique dataset of 3 million jobs from 50,000 companies, we found some pretty compelling information. We identified nearly 150 ATS options currently in use, and while there are some clear winners, not everyone is opting for the heavy hitters.

Taleo software came out on top with 18 percent of all companies in our job search engine using the ATS, including Dow Chemical, Monsanto and McGraw-Hill. However, what was surprising was the same amount of companies (18 percent) were using their own proprietary ATS. That means rather than purchasing software services, these organizations developed their own custom system to meet their needs. For example, Apple, Google, Netflix and Facebook all have a custom ATS.

Because we love a good collection of compelling data, we decided to investigate further and find out whether the most popular ATS selections would vary by industry. After all, different industries can have vastly different hiring needs.

One of LinkUp’s unique offerings is the ability to classify job openings by industry based on the NAICS standard for classifying business establishments. We took a look at ATS options across industries or NAICS categories.

Key findings for ATS use by industry:

  • Some industries rely on only a few ATS options, such as Education and Government.
  • Some industries such as Retail and Arts, Entertainment and Recreation often use their own custom-made systems.
  • Industries such as Professional, Scientific and Technical Services appear to be more fragmented and have ATS selections that run the gamut.

LinkUp_ATSMarketShare_blog_atsbynaicscode

 

Take a look our sampling of key industries and which ATS prove most popular respectively:

Health care

Research uncovered that companies posting health care and social assistance jobs used 82 different ATS options. The top five in this category include:

LinkUp_ATS_MarketShare_blog_table_HealthcareSocialServices

Professional services

Companies posting professional, scientific and technical services jobs used 74 different ATS options, research found. The top five include:

LinkUp_ATS_MarketShare_blog_table_ProfessionalScientificTech

Education

Companies posting jobs in educational services used 51 different ATS options, according to our study. Not surprisingly, the top five selections slanted toward education-focused ATS providers.

LinkUp_ATS_MarketShare_blog_table_EducationalServices

Government

Government hiring agencies mostly use government-specific ATS options to meet their hiring needs. The top five that emerged in government job postings are:

LinkUp_ATS_MarketShare_blog_table_PublicAdministration

Want to know what ATS providers are popular in other industries, including the manufacturing, retail, real estate, finance and more? Download the ATS Market Share Report now for free.

June 1, 2016 / Toby Dayton

Solid May Jobs Report & Full Employment Environment Will Push Fed To Raise Rates In June

Bloomberg shot

 

Bloomberg’s caption from yesterday morning’s discussion about the May jobs report says everything one needs to know about the significance of Friday’s report from the Department of Labor. It is arguably the most significant jobs report since the end of the Great Recession, and no amount of elaboration or additional commentary could possibly lend more weight to the simple pronouncement above that:

FED HIKE PLANS HINGE ON MAY JOBS DATA

Leaving aside for a moment what we expect the Fed to do in June/July, we are forecasting net job growth of 200,000 jobs in May, taking into account the Verizon strike which will likely reduce job gains by roughly 36,000 jobs.

 

 

May 2016 Forecast

 

Our forecast is based on the 3.7% increase in March in new and total job listings in our search engine (which includes ~3.2 million job openings indexed daily directly from 50,000 company websites). Because there is an average lag of between 30-60 days from the time a company posts a job opening and when they fill the position with a new hire, we have to look back to March’s growth in job listings for signs of job growth in May.

But what makes our forecast a bit tricky is that the average number of days that jobs stay on LinkUp (what we call Job Duration) has fallen from 56 days in February to 50 days in May. While the decline in Job Duration points to an uptick in the velocity of hiring (of particularly note are the 1 million jobs that rolled off the site in the past 6 months that were on the site for less than 15 days), it could be the case that we should be looking at April’s LinkUp data instead of March’s data.

 

May 2016 Duration

 

The other sobering fact is that job listings on LinkUp have declined for two consecutive months. In April, new job listings fell 5% while in May, new job listings declined an alarming 15%. Looking at the ‘raw’ data for May, there are clear signs that the labor market is definitely softening as new job listings declined in 48 states and total job listings fell in 35 states.

 

May 2016 Jobs By State

 

May’s job listings by category report shows a similarly bleak picture, with new job listings declining in 30 of 33 categories and total jobs falling in 16 of 33 categories.

 

May 2016 Jobs By Category

 

So despite a bullish forecast last month that articulated our conviction that we are most definitely in a full employment environment, circumstances that will inevitably trigger a June rate hike, we are a bit more measured these days. Despite what we expect to be a better-than-estimate jobs number on Friday of 200,000 jobs gained in May, there is little doubt that the labor market is cooling off. Given the phenomenal job growth over the past 5 years and the incredible recovery from the depths of the Great recession, this cooling off shouldn’t be too surprising.

 

The Great Recession and The Great Recovery

 

So despite being a bit more measured than we were a month ago, we’ll maintain our position that due to overwhelming evidence for a full employment environment, combined with a strong report Friday that should include solid job growth and continued wage gains, the Fed will raise rates in June.

 

June 1, 2016 / Molly Moseley

Summer hours: Awesome perk or needless stressor?

Summer here in Minnesota means spending time by the water. In the land of 10,000 lakes (the number is actually higher), there’s no shortage of shoreline perfect for sunbathing, fishing or building sand castles. We embrace the long days of summer and can’t wait to enjoy the outdoors when Friday afternoon rolls around.

This summer state of mind extends across the United States where employers are increasingly offering summer hours so employees have extra time to enjoy the season to the fullest. Summer hours can take many forms — half-days on Fridays, early release on some days with time made up on others, flexible start and end times, etc.

The benefits of summer hours are easily apparent. Extra time off increases employee morale and loyalty. Because they have time to unplug and refresh, they return to work with renewed enthusiasm and are ready to bring their “A” game. Additionally, being able to spend more time with friends and family boosts work-life balance. Avoiding the rush-hour commute means less time in gridlock and less money spent at the pump. Plus, summer hours serve as a great recruiting tool for HR departments.

Summer hours, however, are not all sunshine and sundaes. For some employees, they can be a big stressor. For example, clocking in for an extended workday to make up time for an early release can mean a 10-hour day. On the early-release day, some employees may get stuck finishing work and backing up employees who have already left. This can create stress among certain staff members during summer months.

For other employees, it’s hard to stay focused during short workdays. Knowing they’re getting off early will motivate some to work harder to complete all tasks while others will already be in vacation mode. Productivity can vary dramatically between team members, possibly causing engagement to plummet.

A successful summer-hours program varies from organization to organization. To ensure your company enjoys the benefits while minimizing the drawbacks, follow these few simple guidelines.

Hours: Some industries require certain hours to be staffed. This may eliminate the possibility of summer hours completely, but perhaps you can figure out a rotating schedule to ensure teams are properly covered during all required periods.

Dates: Determine start and end dates for the program — many companies select Memorial Day to Labor Day. Remember that those first weeks in September can be difficult for employees transitioning back to a traditional schedule.

Alternatives: Consider alternatives like flextime that allow employees to start and end their day around peak productivity periods. Additionally, telecommuting can be a wonderful way for employees to work a full day while skipping the dreaded commute.

Ask: Not sure if employees will enjoy or feel stressed about summer hours? Ask them directly via a survey. At the conclusion of the program, follow up so you can determine if the program was a success or if it should be updated next year.

Setting clear expectations when implementing summer hours will help ensure that employees use the program successfully. When it becomes part of the culture, businesses will enjoy the momentum that comes from a happier, more relaxed staff.

May 31, 2016 / Toby Dayton

And then there were two: SimplyHired to cease operations

Having been in the human capital management industry for over 15 years, I’ve gotten used to news about companies coming and going. But this week’s news about SimplyHired is different. We founded LinkUp as, what was at the time, just the third paid search recruitment advertising company in the space and as such, we looked up to Indeed and SimplyHired as siblings of sorts. A huge proponent of analogies, I’ll admit the familial one in this case isn’t perfect, but it isn’t totally off the mark either. And though I try as much as possible to refrain from sports analogies, that would fit here as well, particularly because business is, for the most part, an inherently competitive endeavor. And because sibling rivalry contains an element of disfunction while rivalry in sports and business is a fundamental aspect of the activity, I suppose the sports analogy is more appropriate here.

So akin to the Original Six, I’ll posit that Indeed, SimplyHired, and LinkUp are the Original Three. For certain, it’s a more crowded league these days, but that only means that the three founding franchises had the vision and foresight to start playing in open, uncharted territory; territory that held, and still holds, enormous opportunity. And yes, I am fully aware that in spinning this analogy thus, I get to elevate LinkUp to some lofty status as a founding father of sorts. An overreach perhaps. And undoubtedly a bit grandiose, but so be it. Facts are facts. First there were three, then there were many, and now of the Original Three, there are only two.

I will also admit that there is a bit of schadenfreude in writing this. A decent amount, actually, if truth be told. To say otherwise would be disingenuous. After all, business is business, and by its very nature, business is competitive. It’s not necessarily a zero sum game, but there are winners and losers; one often at the expense of the other. So a slight degree of satisfaction felt from seeing a competitor leave the field should be forgiven. But the occasion is also a bit sobering. As the saying goes, “There but for the grace of God go I.” I’m not much one for religion, but the sentiment is apt. And while I’m certain it wasn’t due to the grace of God, or the lack thereof, I can’t speak to what, precisely, led to SimplyHired’s downfall. That is neither appropriate nor the point.

So what, then, is the point? I suppose, in some way, the point is to pay respect, sort of like the great tradition in the NHL when two teams line up after a hard-fought series to shake hands. And like professional sports, business is a deadly serious game. Business is tough and building a business is even tougher. Brutally tough, in fact. I’d even go so far as to say that it is one of the greatest challenges imaginable – to build a successful company. To create something from nothing. To build value. To differentiate. To Innovate. To inspire. As anyone who has attempted them can attest, these are exceedingly difficult pursuits.

And while these pursuits are hard enough in a vacuum, they are exponentially more difficult when you add players onto the field who are all trying to do the same thing, oftentimes at your expense. It’s the competition that adds such a fascinating, compelling, and challenging dynamic to the contest. So when a formidable opponent leaves the field, particularly a long-time foe and one of the Original Three, so to speak, it’s worth pausing to pay respect, to shake hands, as it were, and say, with the utmost respect and sincerity, “Nice game.”

IMG_1168

 

May 25, 2016 / Stephanie Anderson

Keep climbing: What job searchers can learn from Mount Everest mountaineers

Photo by Mark Stone, Eddie Bauer Blog

As fresh blooms and a warming climate sweep across the United States, you’re probably dreaming of relaxed days outdoors. On the other side of the world in Nepal, however, spring inspires dreamers of a different kind. That’s because spring is prime time for ambitious climbers to tackle Mount Everest.

Even if you have no desire to conquer Everest yourself, it’s fascinating to learn about other people’s journey to reach the peak. The skill, preparation and patience required to attempt the climb is astonishing. Climbers risk their lives to tackle this mountain; in fact, four people have already died on Everest this season. I’ve been following two well-known mountaineers on Snapchat (everestnofilter) during their preparations for their summit push without oxygen. One just completed the journey and the other turned back due to the cold. Their perseverance is amazing.

The ups and downs of the climb have many parallels to job hunting. No matter the circumstances that lead you to a job search, when you approach it with perseverance, care and dedication, you are going to have more success — just like the climbers looking to cross Everest off their bucket list.

Train and prepare

To attempt Everest, you need to be well trained. Proper preparation is essential to reach your goals, whether they be reaching a mountain’s peak or landing a new job. While it’s tempting to dive right into a climb or job search, doing so can be a recipe for disaster. For job seekers, it’s important to take the time to update your resume, reflect on what type of job you want, determine your non-negotiables and set up job-alert emails. LinkUp’s 5-step job search is a great guide for getting started.

Beware the weather

The conditions have to be just right in order for climbers to attempt Everest. When job searching, it’s important to assess whether the “weather” is right for pursuing a new job. What are your current life circumstances? Is now a good time to get a new job? Are there advancement opportunities at your current place of employment? Are you seeking new employment for the right reasons or are you just temporarily dissatisfied? Consider the current outlook to ensure sunny skies are in the forecast.

Be patient

Everest climbers will go up and down to various elevations on the mountain multiple times before even attempting the summit. Job searching is a similar roller coaster. Sometimes you’ll apply and not hear back. Other times, you’ll have a great networking conversation but no opportunities will be available. Perhaps you’ll interview but you won’t be the right candidate. Whatever the case, you must be patient and persevere. When it’s the right job for you, you’ll climb through base camp (application), camp one (phone interview), camp two (in-person interview), camp three (reference check), camp four (background check), and then finally the summit (the offer).

Find your Sherpa

No matter how good a climber is, he or she is going to work with a Sherpa to ensure a safe and successful climb. For job seekers, leveraging the right resources is just as important during the search. Call on your network for help and reach out to old colleagues, friends and family. People can be great resources in a job search and most enjoy helping others reach their goals; you simply need to ask.

Celebrate the summit

After what feels like endless planning and a marathon journey, the best mountaineers get to enjoy the breathtaking view at Everest’s summit. When you finally reach the summit of your job search by getting and accepting an offer, take time to celebrate. Enjoy the view and get ready for the next big chapter in your life.

May 18, 2016 / Molly Moseley

Leaning out is as hard as leaning in

Sheryl Sandberg (2016, January 13). [Facebook update]

Professional women across the globe have found inspiration in Sheryl Sandberg’s book Lean In since its 2013 release. The book, which tackles a multitude of issues that women face as they grow their careers, encourages them to speak up, be confident and take charge. In essence, it proposes that women should lean into their professions as much as possible in order to break stereotypes and glass ceilings (how achievable that is for working moms, we explore here).

Sandberg, however, has recently admitted that parts of her best-selling book are incorrect. In a Mother’s Day Facebook post, she addressed one of the most common criticisms of Lean In — that the concept is extremely difficult for single moms.

After losing her husband tragically and unexpectedly a year ago, Sandberg experienced firsthand the challenges of being a professional and single parent. And she didn’t just lose her spouse and the father of her children, she also lost her core support system. Sandberg realized many other women face this challenge every day — most without her financial security — and she became concerned.

“I did not really get how hard it is to succeed at work when you are overwhelmed at home,” Sandberg wrote.

After being thrust into single motherhood, it became clear it’s impossible to lean in constantly. There are times when you have to lean out for yourself and for your family. When your most precious resource is time, the toughest skill you will ever master is how to properly spend it in order to achieve the things that matter most to you. After all, there are only 24 hours in the day.

Depending on the support and resources you have available, there will be times throughout your career when you’ll be able to lean in more. There is no shame, however, in recognizing that it’s time to lean out. Here are some ideas for navigating your lean so your ship is always sailing smoothly:

1. Engage your family relationships.
Sit down with your kids or significant other, ask them about their day, week or month. What are they excited about and what’s bugging them? Can you help or do they just need someone to talk to?

2. Check your career. 
What have you been enjoying? What is dragging you down? Where do you want to be in six months, a year and 5 years? Think about what you can do to get there.

3. Set a bed time and stick to it.
Quality sleep is one of the greatest gifts you can give yourself, plus it will help you be a better professional and parent.

4. Don’t bring your phone to bed. 
Gasp! Remember, old-school alarm clocks? You can get one for about $10. Yes, you can keep your phone in the bedroom in case of an emergency, but don’t have it within arm’s reach where it will tempt you to check email and peruse the internet all night long.

5. Learn to say no.
Stop feeling obliged to always say yes. Don’t volunteer for things you’re merely mildly interested in. Forget the PTA. Forgo the fifth kids’ birthday party this month. Inject free time into your schedule.

6. Make time for friends.
Personal relationships require nurturing. Make time to hang out with friends, even if it’s once a month. Your heart will be happy.

7. Ask for help. 
It takes a village. Remember, people love to feel useful and often will happily lend a hand, if you ask.

8. Outsource. 
If you have the means, hire a cleaner or a lawn service to free up your free time for more productive or enjoyable activities. If you don’t, consider ways to open funds, such as cutting cable or brown-bagging lunch.

What other things do you do to navigate your lean? Please share!

May 13, 2016 / Stephanie Anderson

10 red flags for spotting fake LinkedIn profiles

To effectively network on LinkedIn, you need to grow your connections. While the golden rule is to not accept anyone you don’t personally know, the reality is that many people connect with others they haven’t met. After all, business doesn’t happen in a bubble and neither does networking.

Because of this, fraud has grown tremendously on LinkedIn. Criminals make fake profiles in order to contact you for a variety of reasons. It doesn’t benefit your professional reputation to have fraudulent connects, and worse, it might cause big problems.

Most LinkedIn fraud happens via InMail. You connect with a criminal who is posing as a professional and then they send you a spam InMail, such as:

  • Recruiter seeking your personal information for a potential job
  • Romantic inquiries
  • Inheritance schemes
  • Freebies and offer claims

These types of fraudulent emails look legitimate and may contain links that have malware and viruses that can knock your computer out cold. Before you connect with anyone, it’s best to take some precautions. Here are a few red flags to look for any time someone requests to connect.

1. No picture: Most people have a head shot on their profile. If a connection lacks a photo, it’s an immediate red flag.

2. A perfect picture: Does the photo look stock? Does the person look like a model? Yes, there are a lot of attractive professionals out there, but if the picture looks like it’s plucked from the pages of a magazine, be suspect.

3. Few connections: How many connections does the person have? Several hundred or two? If you don’t know the person and they have very few connections, just say no.

4. Limited or generic information: It’s easy to copy job titles from another person or simply use generic ones. Where spammers fail is they often won’t fill in any information beyond titles. Beware the profile that lacks details about experience.

5. Questionable tag line: The tag line is the information that appears immediately after a person’s name. Does this content scream “spam”? If so, don’t connect.

6. Shared contacts: When you look, do you have any shared contacts with this person? Connections often cross over within industries, so a real person may be a second-degree contact with you already.

7. Recommendations: Not everyone activates the recommendation feature on LinkedIn, but it’s still an important feature to look for when spotting a fake profile. Only a real person will have recommendations from their network.

8. URL: Many professionals will customize their URL on LinkedIn. An account that doesn’t have a custom URL, or one that has a number that indicates it’s newer (3 million +), may be fake.

9. Exotic location: Does the location of the person seem suspect? If it feels odd that someone in Ghana would want to connect with you, trust your gut.

10. Keyword stuffing: In an effort to be more searchable, criminals create fake profiles bursting with keywords. If the profile uses too many keywords or keywords that nobody in your industry would use, consider it a warning.

For more LinkedIn networking insights, check out our post Follow, connect or get out of the way? Navigating LinkedIn relationships.

May 3, 2016 / Toby Dayton

We Are Definitely In a Full Employment Environment; April Jobs Report Will Obliterate Any Doubts About Wage Inflation & June Rate Hike

Now that Season 6 of Game of Thrones has started up, I can finally stop relying on politics as a backdrop for our monthly non-farm payroll (NFP) forecasts and labor market commentary. And like the first 2 fantastic episodes of the season, there is certainly no shortage of storylines to draw from. In fact, there are so many chaotic story lines swirling around the U.S. economy at the moment that things more closely resembles Westeros than at any point since the carnage of the Great Recession. While it wouldn’t surprise me if a few dragons appeared in the skies, we do have our own Lucifer in the Flesh, The First of His Name and The Most Miserable Son of a Bitch. And in addition, just like GoT, every time one part of the story seems to get resolved, more questions emerge, uncertainty keeps growing, and fear and trepidation continue to plague the nation.

On top of the standard list of questions these days such as whether or not 2016 will follow the pattern of recent years with weak Q1 GDP growth followed by decent subsequent growth later in the year and how nervous the U.S. should be about persistent global weakness, a list of far more vexing and impactful questions has begun to materialize. A few such questions are…

1) What has happened to U.S. productivity growth?

2) Are we in an environment of Full Employment?

And of course, there’s always the same question that has persisted for years in one form or another….

3) WWJD (What Will Janet Do)

As an amateur economist at best, I’m forced to rely on far more qualified economists to answer the first question, but as to the second, I can state with a high degree of confidence and supporting data, including LinkUp’s proprietary labor market data, that the answer is most definitely yes. And because the answer to #2 is yes, combined with our bullish NFP forecast for April (net gain of 315,000 jobs), the answer to #3 is a quarter-point raise in June. But before jumping into the first question, it’s worth highlighting the current, chaotic state of the U.S. economy.

 

US Macro Slide

 

I won’t even begin to try to speculate on what GDP growth will be for the remainder of the year, what the likelihood of a recession is in the next 12 months, or what further insanity is in store in this preposterous Presidential election cycle and what impact that might have on the economy and the markets, but the question of how it is possible that the U.S. economy and the U.S. labor market continue to chug along, the bright star among global economies, despite exhibiting the lowest productivity gains in any 5-year period since 1978-1982 is a fascinating one that will likely have deeply serious implications for decades.

The first and easiest (and perhaps laziest) answer, and one that undoubtedly has ample merit, is “Measurement Error.” It is hard to argue the absurdly challenging task of accurately measuring productivity in a post-industrial, service/technology/information/knowledge-based economy. And while that challenge has always existed, many economists believe Measurement Error is becoming increasingly problematic in tracking productivity.

The second explanation, also with much merit, posits that productivity is low due to the fact that we are very early in the investment cycle and that productivity growth will accelerate dramatically in the years to come. Proponents of this view point to a similar period of low investment between 1993 and 1998, which was then followed by explosive growth in productivity in the 2000’s. To be sure, corporate earnings in recent years have been extraordinarily elevated and balance sheets have been awash in cash due to low wages and a dearth of investment in plant and equipment. But investments in technology, research & development, and software ticked up in Q1 and perhaps we’re in for another period of soaring productivity in the next decade along the lines of what we saw over a decade ago.

Another explanation might be the severe lack of government investment over the past decade or so, perhaps even longer. On top of anemic private sector investment, public sector investment has been virtually non-existent since the Great Recession when an insanely misguided austerity fever gripped the nation. Cuts in public dollars invested in education, training, research, large scale projects, public-private partnerships, public works, infrastructure, and transportation, to name just a few, have undoubtedly had a negative effect on the nation’s productivity, and the numbers we are seeing now most likely reflect some of that impact.

And finally, Paul Krugman makes a tremendously compelling case that expanding monopoly power in the U.S. is not only raising profits at the expense of wages, but also reducing competition and the incentive to make investments in innovation and productivity. Not only is such a period of Secular Stagnation, an environment marked by high profits and low investment (which is particularly questionable in a period with such a ridiculously low cost of capital) with persistently sluggish growth except during asset bubbles, perilous for the future of the U.S. economy, but Krugman also contends that it creates a serious impediment to achieving or sustaining full employment.

…a serious impediment, but not an impossibility.

For if one accepts that Full Employment is reached at that level of employment above which inflation is triggered, then we are most definitely at Full Employment. Despite the fact that Fed Chair Janet Yellen recently stated that Full Employment might not be reached until unemployment drops below 4.8% (key word might), there is absolutely no doubt that the current level of employment has started triggering wage inflation. But again, before we get into the debate around whether or not we have hit Full Employment, it’s worth highlighting some data points around the current state of the U.S. labor market.

Since September of 2010, we’ve had 66 straight months of positive monthly net job gains.

 

Monthly NFP

 

As a result, unemployment has dropped steadily from 10.1% in October of 2009 to 5.0% in March.

 

US Unemployment

 

Initial jobless claims are the lowest they’ve been since 1973. (And thanks to Calculatedriskblog.com for some awesome charts – it’s an outstanding site for economic/finance/market data, charts, and commentary).

 

Jobless Claims

 

Quits are rising, layoffs are at a 40-year low, and job openings are at an estimated 5.5 million (although that last number is suspect because government figures still do not account for excessive duplication in their job openings data sources).

 

JOLTS

 

And for the past few years, the number of employed people has grown faster than the employment population.

 

Employed and EPR

 

All of this has caused wages to start to increase.

 

Hourly Earnings w:GoldBug

 

 

And while the rise in wages has been faint and slow, they are rising. In Q1, in fact, ADP reported that wages for workers in their job for at least a year rose 4.6%, up from a rise of 4.1% in Q4 2015. Add to that the fact that more and more companies are voluntarily raising the wages of their lowest-paid employees and cities and states around the country are raising their minimum wage. Today, just 3.3% of the U.S. workforce is paid the Federal minimum wage of $7.25 an hour, down from 6% in 2010 and the lowest level since 2008.

But while the case for Full Employment is overwhelmingly strong, there are a few nagging details surrounding the labor market such as the 6 million people involuntarily working in part-time jobs because they cannot find full-time work and a record low labor force participation rate. Those factors definitely raise questions about whether or not the slack in the labor market has been completely eliminated.

 

Full Employment Slide

 

But the low labor force participation rate can be at least partially explained by retiring baby boomers (which is also potentially contributing to low productivity in the U.S.), and the number of involuntary part-time workers is rapidly shrinking. As a great article in the Wall Street Journal recently pointed out, companies are finding that not only does turning what had been a part-time job into a full-time job increase its appeal and make it easier to fill, that full-time worker creates a far better ROI even with the increase in cost.

Similarly, the increase in the past 10 years of 9.4 million people in ‘Alternative Work Arrangements’ such as driving for Uber may or may not reflect slack in the labor market. The growing gig economy might, in fact, reflect a permanent shift for a growing number of people who, for one reason or another, might not take a full-time job even if one were available. Rising wages might reduce that number, but at best, it’s uncertain how much and how that number changes for a given magnitude of wage inflation.

So despite some legitimate questions about how much slack remains in the labor market, that slack, to the extent that it exists at all, is very much at the margin, and there is no doubt whatsoever that continued strength in the labor market is creating upward pressure on wages and salaries. Conclusive evidence already exists, it’s getting stronger and more visible every month, and it’s likely to accelerate with more consecutive months of net job growth.

And whatever doubts anyone might still have, they’ll be completely obliterated with Friday’s jobs report for April. Based on LinkUp’s labor market data for February, in which new job openings from company websites rose 22% and total job openings rose 3%, we are forecasting net job gains for April of 315,000 jobs.

 

LinkUp April 2016 NFP

 

Nothing new, but we are once again the outlier among economists surveyed by Bloomberg.

 

NFP_2016.05.04

 

The approximately 60-day lag between February listings and April job gains is driven by what we are seeing in our Job Duration data which is down from 56 days in February but still remains above where it was in 2015. The increase in average job duration in our job search engine (which contains roughly 3.2 million jobs indexed directly from 50,000 company websites which creates a very clean data signal because we eliminate expired listings, duplicate listings, and job board pollution) from last August reflects the fact that companies are finding it harder to fill openings in a tightening labor market. I’d further speculate that the decline in job duration since February is the result of more people entering the workforce, a higher number of quits, people moving from part-time to full-time work, rising wages, and an increase in overall labor market fluidity or ‘liquidity.’

 

Job Duration By Month

 

In April, new jobs by state fell 2% and total jobs rose 1%, but we’ll get another reading for April next month when we pull data comparing April to May, so it’s too early to forecast precisely what job growth will look like in June. At a minimum, it’s safe to say that monthly job gains should remain solid through at least the end of Q2.

 

Jobs By State April 2016

 

And if trends over the last few years hold up in 2016, and there is every reason to believe they will, job gains in Q2 should come in somewhere between 700,000 – 800,000 jobs.

 

Job Gains By Qtr By Year Q1 2016

 

Such sustained levels of job growth (even after a likely downward revision of March’s NFP to somewhere below 200,000 jobs) would further drive up wages. Given declining corporate profits and low productivity, companies would most likely pass along the increased costs to their customers, resulting in fairly rapid inflation. That in turn, would likely result in a June rate hike by the Fed.

And while I’m in the mode of predicting the future, I’ll jump back to my obsession with Game of Thrones with a prediction that it will be Bran and his ability to see the past that will unlock the truth behind R+L=J.

We will be hosting a webinar on Full Employment on Wednesday, May 18th, at 1:00PM CST. Anyone interested in attending can register here.

Oh, and one more thing…

 

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