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September 2, 2015 / Toby Dayton

Amidst An Abundance Of Uncertainty, The U.S. Labor Market Is Flashing Some Serious Warning Signs

Like Alice in Wonderland, it’s exceedingly difficult to make any sense of the world of late as it turns upside down on what seems to be a daily basis. Between Trump’s poll numbers, China’s epic meltdown, off-the-charts cop killing (both ways), raging forest fires out west, Hillary’s inability to get her campaign going, and record-setting market gyrations to name just a few examples, each day is filled with headlines that increasingly magnify the sense of chaos and insanity. It’s gotten so crazy that the Pope is forgiving abortions and the Mets are winning the NL East.

On the economic front, things are equally as schizophrenic, as I pointed out ad nauseam in our July jobs forecast blog post. Unfortunately, our jobs data from August has only added to the confusion, and after days of stewing over the numbers, I am no closer to making sense of them than I was on Tuesday night. So with time running out to get our forecast in to Bloomberg, I am left having to cut short our analysis, abbreviate my write-up, and essentially flip a coin as to what August’s NFP payroll number will be on Friday.

So here’s the quick summary of the data:

2015 NFP Data Through July

After huge gains in new and total job openings in our job search engine (which includes 3.3 million jobs updated daily from 50,000 company websites which means that the jobs are always current, with no duplicates or job board pollution) in May and June, particularly new job openings which jumped 26% in June, new job openings have plummeted in July and August. With typically a 30-60 day lag in the amount of time it takes for changes in job openings to be reflected in actual payroll numbers, the question is whether August’s NFP report will rise sharply due to June’s jump in new job openings or drop precipitously as a result of the decline in new job openings in July.

LinkUp Data in 2015

To try to get some insight into which data point might prove prescient, we can look at our monthly Jobs Duration data which measures how long job openings were in our search engine before they rolled off, presumably because they were filled with a new hire.

Job Duration - Aug 2015

As the chart above shows, 4 million jobs rolled off LinkUp over the past 6 months, and those jobs were on the site for an average of 42 days. That average duration is down from 49 days just 2 months ago. So for 9 months between last October and this past June, the velocity of hiring across the country slowed considerably (as evidenced by an average job duration which rose from 41 to 49 days) as the labor market tightened and employers found it increasingly difficult to fill openings. Since then, however, job duration has fallen again, quite dramatically, in fact.

But the key question is whether companies are once again filling positions quickly or simply removing openings that they no longer intend to fill. Perhaps the most telling data point in the chart above is the 1.8 million jobs that rolled off LinkUp between March and August that were in our search engine for less than 15 days. That’s a massive 50% increase from the same statistic in June, indicating that a huge percentage of the 2 million new job listings that appeared on LinkUp in May and June disappeared within 2 weeks.

To get a sense of how massive the jump in new jobs in Q2 actually was, as well as how quickly it came back down, compare new job volatility in May and June to the 5% average increase in new job listings for those 2 months over the past 6 years.

New jobs in 2015 v 6 yr ave

As an aside, the chart also perfectly depicts seasonal hiring trends over the course of a calendar year. As the blue line indicates, employers post a ton of new job openings in January and taper off the rate of new job openings until a slight uptick in the spring. New job openings are typically down in the summer, rise slightly with another hiring push each fall, followed by a complete dearth of new postings in the 4th quarter.

But back to that huge, anomalous, short-term spike in new job postings in May and June…

While it could very easily be the case that those job openings disappeared because they were filled by new hires, it could also just as easily be the case that employers took down the openings in a bit of a panic because they were spooked by (take your pick): China, a rising dollar & shrinking exports, sluggish global growth, growing wage pressure (which is most assuredly occurring despite the lack of visibility of it being so in any government data), falling consumer confidence, and the uncertainty about when the Fed might increase rates and how the economy and the markets might react, not just in the U.S. but also around the world.

So if those new job openings were filled with new jobs, Fridays’ jobs report could come in as high as a net gain of 335,000 in August. But if all those new job openings were quickly removed due to growing uncertainty and perhaps even pessimism about what might be in store for the rest of the year, then Friday’s jobs report could be as low as a net gain of just 115,000 jobs in August. That’s a fairly large gap, especially given the relative consistency of monthly job gains through the first 7 months of the year which also points to a 3rd possibility which is some combination of both factors which would result in a perfectly bland but not discouraging jobs report of around 225,000 jobs.

The only remaining data point is our job listings data from August. Last month, new job listings fell 2% while total job openings rose 3%. As with the deluge of dichotomous data discussed last month, it’s difficult to determine whether to be discouraged by the decline in new job openings or delighted by the growth in total job openings.

Jobs by State Aug 2015

In terms of jobs by category, the data is nearly identical, with new job listings dropping 2% and total job listings rising 3%.

Jobs by Category Aug 2015

While our ‘raw’ data for August from the 2 charts above is somewhat inconclusive, our paired-month methodology and 50/50 blended mix of the change in new and total job openings that we use for our forecasts results in a decline of 9.6% in August.

August 2015 NFP Forecast

And while Friday’s jobs report could easily surprise to the upside with a 300K+ number (reflecting the increase in LinkUp’s job listings in June), it is a virtual certainty that the declines we’ve seen in new job openings on LinkUp over the past 2 months will eventually be reflected in a continuation of declining net job growth this fall. So if for no other reason than to anchor myself to the only bit of certainty I can even faintly discern in the chaos that is the economy these days, I am forecasting a net gain of just 135,000 jobs for August, a rather dismal number for Friday’s jobs report. The declines we expect might not happen until later this fall, but the labor market is most definitely flashing some serious warning signs.

September 2, 2015 / Stephanie Anderson

How not to offend your network: LinkedIn commenting etiquette

shutterstock_119635396Being an active member of LinkedIn means posting, commenting and engaging with your network and experts in your industry. Simply read and share posts, make comments and contribute to the conversation. You don’t even necessarily have to agree with a post, counterpoints and lively discussion are fantastic ways to engage with a professional community.

But at what point does healthy dialogue turn unprofessional or even downright nasty?

I’ve seen my fair share of offensive comments while reading through LinkedIn posts. This is somewhat surprising given the lack of anonymity on LinkedIn. Whatever you post will be plastered for your entire network to see, oftentimes with your head shot right next to it.

Here are a few examples we were surprised to find on LinkedIn lately:

1. As of today the article I had a baby and cancer when I worked Amazon, here’s my story has had more than 400,000 views. Of the 1,300 comments it generated, Mr. Aleem’s may be one of the least productive. Arguably sexist, his comment is likely to have offended a good portion of the readers, and the responses from Apurva and Johann, though maybe justified, are not necessarily professional either. There was a lot of great dialogue on this article, Mr. Aleem’s input not included.

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2. In the article The key to success is friendship the author he shares how integral friendship has been to his career. Too bad Mr. Fortinberry could only respond with a most unfriendly reply. I can’t imagine a scenario where it’s acceptable to call someone an idot on a professional networking site. Disagree, absolutely. Insult, never.

Screen Shot 2015-09-02 at 11.45.29 AM

3. Even our own posts from the LinkUp blog  receive unsavory comments from time to time. My colleague Molly Moseley recently wrote the post Does unlimited parental leave actually mean less time off?  It’s clear Mr. Kidney disagrees with my colleague’s point of view which is fine, but he takes it to such a negative place in recommending she be ignored. I fail to see how interviewing her has anything to do with a healthy discussion on maternity leave in our society.

Screen Shot 2015-09-02 at 11.34.33 AM

To reiterate, we know that not everyone agrees. In fact, we love a good insightful discussion. Differing opinions can create really good conversation and even inspire innovation. But there is a difference between constructive disagreement and being just plain rude.

Whether you are a fresh college graduate or seasoned professional, make sure you put your best foot forward in your posts by heeding these basic rules of engagement for commenting on LinkedIn:

Rule 1: Speak up and don’t be shy. It’s great to have an open dialogue and interesting to hear different points of view, but keep comments respectful and insightful. Help to move a conversation forward, not shut it down.

Rule 2: Avoid personal attacks on the author and/or other commenters. Keep your focus on the topic being discussed, not the person who is discussing them.

Rule 3: Your mom was right: If you can’t say anything nice, don’t say anything at all. Remember, your network sees what you post in their feeds, and it’s a small world. Unruly commenting could negatively impact your future job search or advancement at your current company.

Rule 4: Take the high road. If someone is posting negative and/or inappropriate comments, don’t lower yourself to their level. Name calling is never professional.

Rule 5: Take extra care with topics in politics, gender discrimination and cultural discrimination. You don’t necessarily need to avoid these topics altogether, but maintaining professionalism when addressing them can be a bit trickier.

Rule 6: Don’t spam or comment on a completely unrelated topic. This is not the place to sell something or announce that you’re seeking new employment. You add no value to the conversation and come off as selfish. The best way to sell yourself is by demonstrating your knowledge.

So give it to me straight! What do you think about commenting on LinkedIn? Where do YOU draw the line between being professional and being a pest?

August 26, 2015 / Molly Moseley

Want to create a toxic work environment? Just mimic what Amazon does

Emails at midnight requiring a response. Employees encouraged to criticize and undermine colleagues. Virtually everyone is losing it and crying at their desks. For most of us, this describes our nightmare employer. But for thousands of people who work for Amazon, this is reality.

Or so a recent New York Times article leads us to think.

The minute the story was published, everyone was talking about the horrific claims of how our beloved online retailer seemingly steals the souls of every person who works there. Could it all be true? Are a few bad eggs complaining without just cause, or is management failing to address major issues? The truth probably lies somewhere in the middle.

Businesses both big and small can learn from the bad press by taking a step back to evaluate their corporate culture and decide what’s working and what’s not. By regularly asking some important questions, improvements can be made to help boost employee engagement and satisfaction, and therefore, productivity and retention.

1. Is there adequate work-life balance?

The Times article claims Amazon employees often work 80 or more hours a week. Clearly few other things exist beside work and sleep when those are the hours you’re expected to clock.

While people may understand work is a priority, it’s not their only priority. Work-life balance is a must for attracting and retaining quality workers. In fact, 52 percent of people have turned down a job due to work-life balance concerns, according to an Accenture survey. Additionally, the survey found work-life balance topped employees’ definition of success, ahead of money.

2. Is the culture attracting the right employees?

Every business has a unique culture. For example, what you’ll find at a conservative financial institution won’t likely be the same as a small advertising start-up. The culture is a reflection of the brand and it should represent the qualities you want to see in employees. If everything aligns, it can be one of the best ways to attract the right people for the right jobs.

In Amazon’s case, there appears to be a major disconnect between the culture and the brand image. Are some employees coming to the company expecting one thing and experiencing another? It’s possible, and high turnover rates will follow.

3. What are people saying and how is it affecting the company’s reputation?

In business, few things are more valuable than reputation. Reputation opens doors and closes deals. It also influences who will be the lifeblood of a company and work there. Want unbiased insight into what employees think about working at your company? Look online, company review sites and social media are fantastic resources.

Amazon’s Glassdoor rating isn’t as stark as the Times report would have us think it. At 3.4 out of 5 stars (based on 5.9K reviews), the company ranks average, neither particularly high nor low. Still, their PR team is definitely in crisis mode, and our bet is that they are working extra hard to recover from the media blow. This won’t be the last we hear of this story.

August 20, 2015 / Stephanie Anderson

To degree or not degree? That’s the question for many workers looking to get ahead

shutterstock_79498447American workers are going back to school in droves to earn degrees and certifications. In theory, getting a degree—or an extra one—is a great way to advance your career. Statistics show that people with degrees earn more money and have higher employment rates than those without degrees. But if you already have a job, is it always worth it to invest in going back to school?

Education is expensive. For example, if you’re thinking of going back to school to earn an MBA, you can expect to shell out around $44,000 for that sheepskin, according to a Forbes report. It’s about $11,000 more to get an MBA from a private school. That’s a huge investment, so it’s important to know if the returns will be worth it.

As a consultant, I worked for a vice president who once told me if there’s no requirement for you to go back to school, don’t do it. He didn’t have an advanced degree or MBA, but he was a great leader who has done very well for himself. His message resonated for me: don’t go back to school just because. Instead, focus on what will make you more valuable and successful in your current role, or will set you up for success in your desired roll. A degree doesn’t always meet that standard for everyone.

As the cost of education continues to rise and the amount of free time we have continues to shrink, my VP’s message is more important than ever. If you’re thinking about going back to school to earn a new degree, here are some questions to ask yourself first:

  • What’s my motivation? Is it because the job you would like to move into specifically requires that degree? That’s a good reason to go back to school. Is it because everyone else in your department is doing it, even though your company doesn’t require you to have a degree for the job you’re doing? If you want to be a doctor or a psychologist, you’re going to need that doctorate, but if you’re in marketing, you probably don’t really need a Ph.D. Look into job descriptions for positions you’re interested in to get an idea of how often they require applicants to have an advanced degree.
  • Does it make financial sense for me to return to school? You know it’s going to cost dough to get a degree. Where will that money come from? Do you have savings? Are you eligible for financial aid? Will your company help pay for it? Can you keep working and earning while you pursue a degree? And on the other side of the question, are you reasonably confident the degree will improve your ability to earn more money?
  • Do you have the time to go back to school? Online degree programs have made it easier than ever to go back to school, but it’s still a lot of work. You’ll need to make a significant time investment. If you enroll in a program, pay your money but fail to complete the work because you just couldn’t find the hours to do it, you’ll be wasting time, resources and energy.
  • Does that higher degree risk pricing you out of a job? More than one advanced-degree holder has been told he or she is overqualified for a job. If you’ve got a Ph.D., you probably have certain salary expectations. Will the companies you want to work for be able to meet your monetary requirements? Will they even bother to interview you if they don’t think they can afford you?
  • Are you possibly better off staying as/where you are? Instead of spending time and money earning a degree that may not really advance your career, re-examine your current role to assess what skills and experience it provides that could benefit you later on.

Going back to school can be a great move on many levels. But before you make the investment, be sure you understand what you’ll really get out of it.

August 11, 2015 / Molly Moseley

Does unlimited parental leave actually mean less time off?

shutterstock_264577595Did you know that the U.S. is one of only three countries that doesn’t mandate paid maternity leave? According to a story published by ABC News earlier this year, the United States joins only Papua New Guinea and Suriname in this dismal standing. Are you outraged? If not, you should be.

That’s why it’s so important to celebrate companies like Netflix who are helping change the discussion and their own policies on parental leave in America.

In case you missed it, last week Netflix announced that it will offer unlimited paid parental leave (Yep, that’s both moms and dads) in the first year of a child’s life or first year following an adoption. Netflix based this decision presumably on good business sense, a desire to attract and retain top employees, simple human decency and the drive to be a benefits trailblazer. We are very excited about this move, but the reality is that not every business is in a position to do what Netflix has done, and the results they intend to produce may not actually materialize.

The obvious worry is that workers will abuse unlimited vacation or family leave policies and take more time than before, negatively impacting productivity. The less obvious concern is that if such policies aren’t clearly defined, communicated and culturally accepted, there’s actually a greater risk that employees will take less leave.

“In terms of recruiting the most talented employees, unlimited parental leave is undoubtedly a very unique and attractive selling point for Netflix,” says Ben Hutt, CEO of The Search Party, an online recruitment marketplace. “However, this policy could also be dangerous because without regulation, high-performing employees may choose to come back to work right away, rather than spending the much-needed time with their families.”

Rebecca Honeyman, senior vice president and managing director in New York City for Hotwire PR, agrees: “The reality is that such policies are difficult to communicate to employees, and can often result in people taking less leave than they would if the company had a structured policy with clear limits on the available paid and unpaid time off.”

So what’s the take-away from Netflix’s announcement? While there’s no denying that America’s parental leave policies need some significant overhauling, keep these key points in mind before you take the plunge:

  • Like unlimited vacation time (which we recently blogged about), unlimited parental leave isn’t going to be practical for every company.
  • Experience shows such policies can backfire, prompting employees to take less leave because they worry taking more time off will make them look bad to their bosses and co-workers. Leadership buy-in and support are absolutely crucial to  cultural adoption.
  • Such policies need to be carefully defined and consistently implemented, otherwise you also risk being unfair to employees who have no children or whose kids are older.

Great benefits are a vital tool for attracting and keeping great employees. And there’s no denying that unlimited parental leave has the potential to be a fantastic benefit. If your company is considering following the lead of others like Netflix, it’s important to understand if unlimited parental leave will fit your corporate culture and business model, and to ensure your eligible employees really get the time they deserve.

August 5, 2015 / Stephanie Anderson

Job search gut check: 8 questions to ask yourself before you apply

How do you measure success in your job search? Obviously a successful job search results in a great new job, but along the way you’re probably focused on the number of applications submitted, or  interviews landed. Here’s the problem, if you’re applying and interviewing for all the wrong jobs, you’re ultimately going to extend the length of your job search and increase your frustration.

Before you hit go on another application, stop for a quick job search “gut check.” Consider these eight questions to determine if a job’s worth applying for, or if it’s a non-starter.

1. Is this a real, legitimate job?

That old saying “if it looks too good to be true, it probably is” applies tenfold to job hunting in the digital age. Old, fake or scam job listings abound on the Internet. Carefully evaluate a job ad before you reply. Is the job advertised on the website of a legitimate company? Can you find information on that company? Does the ad or application require you to reveal personal or financial information before you can even talk to someone at the company? Be sure to check out our post on how to spot job scams.

2. Am I qualified for the position?

Minimum requirements are one of the most important components of a job description. They dictate what skills and experience are required of a candidate to be considered for a job. If a sourcing specialist scans your resume and you lack the “5 years of retail experience” required for the job, your application is destined for the trash and your so is your time.

3. Can I handle the commute?

Everyone wants to work from home, but it’s more likely you’ll end up commuting to an office. Is that commute going to be reasonable? Will you need to relocate, and are you willing to do so? Will the commuting time require you to rearrange child-care plans? If it will be a long drive from home to the office, are there affordable alternatives like public transportation?

4. Will this job allow me to maintain my work-life balance?

Yes, you want a job, but that job shouldn’t take over your whole life. As you evaluate the job and company, watch for work-life balance red flags. For example, does the company have a bad online reputation on websites where current and former employees anonymously review companies? Can you find information about the work-life balance or company social activities on its hiring website?

5. How stable and reputable is the company?

If you’re out of work, it can be tempting to grab any opportunity that comes your way. But it’s important to know how stable the company is and its reputation for how it treats employees. If the company has been riddled with layoffs and bad earnings statements, working for them may be a big risk. If the company has more layoffs or goes out of business, you could be out of a job again.

6. Do you like the leadership of the company?

Of course you know it’s important to get along well with your immediate supervisor, but how you feel about the higher-ups is also relevant. You may not interact with the CEO on a daily basis – or ever – but if he’s made public statements that you can’t respect, or has a reputation for treating staff poorly, you may end up unhappy in the job. Antipathy toward leaders can be a sign you’ll clash with the company’s culture, too. Finally, if you don’t “like” the leadership’s business acumen, you may never be confident of the company’s future, or confident in your job.

7. Do you believe in their product/service or mission?

If your passion is animal rights, do you really want to work for a retailer who makes money selling real fur coats? That might not bother some people, but would it trouble you? If you don’t believe in what the company is selling, you could eventually feel like a sell-out and your self-respect will suffer.

8. What’s the single most exciting thing about this opportunity?

Is it the work, the people, the product, the chance to make a difference? There’s no single right way to answer that question, but there is definitely a wrong way. If you’re taking a job solely for the money, you will almost certainly conclude one day that it just wasn’t worth it. The best jobs fulfill your desire for meaningful work, as well as your need for a paycheck.

August 4, 2015 / Toby Dayton

LinkUp Forecasting Strong July Jobs Report & September Rate Increase

Not since early in the Spring of 2013 have so many people been so intently trying to read the tea leaves in an attempt to discern what the Fed Chair might do in the months ahead. Back then, the tea leaves consisted of monthly non-farm payroll (NFP) reports released by the Bureau of Labor Statistics (BLS) and the objective of a proper reading was determining when the Fed would begin tapering QE III which was scheduled to be phased out when unemployment reached 6.5%.

Tasseography today has crescendoed to a cacophony of noisy data streams including NFP, JOLTS, jobless claims, the labor force participation rate, long-term unemployment, wage inflation, general inflation, productivity, GDP growth, durable goods orders, consumer spending, consumer sentiment, the S&P/Case-Shiller home price index, and just about anything else anyone can think of that might hold a clue as to when Fed Chair Yellen might begin raising interest rates. While the consensus view is September, Yellen told members of Congress last week during testimony on Capitol Hill that, “While labor market conditions have improved substantially, they are not yet consistent with maximum employment.”

The number of variables in play as the Fed weighs the timing of its move is as long as the list of Republican Presidential candidates, and the picture those variables paint is just as discombobulated and unruly as the stage in Cleveland on Thursday night is certain to be during the first Republican debate. The challenge of deciphering so many signals is problematic enough on its own, but it becomes exponentially more difficult given that each signal not only presents a different picture depending upon the viewer’s perspective and the angle it’s viewed from, but also because each signal often conflicts with signals being emitted from other data points.

But despite the chaos that seems to be as inexplicable and disconcerting as Trump’s poll numbers, I’ll walk through the tea leaves as we read them and try to paint the picture of the current environment as we see it.

The backdrop of the overall jobs market is very good

There is no doubt that, viewed from the widest angle, the labor market is in very good shape relative to the past 5 or 6 years. The economy has added jobs for 57 consecutive months, a stretch that has seen a total of 11.5 million jobs added to the economy since October of 2010. Even more encouraging is the fact that momentum has been growing, with job gains in 2014 rising 30% over the prior year to an increase of 3.1 million jobs.

Job Growth by Qtr By Year Q2 2015

Job growth is slowing down in 2015

Unfortunately, however, when you narrow the lens a bit and take a closer look at more recent trends, it’s also clear that job growth has slowed a bit in 2015. Through June, the economy has added only 1.25 million jobs, a 13% drop from the same period a year ago. A bit more alarming is the fact that job growth in the 2nd quarter is 22% behind Q2 2014.

Jobs By Quarter 2011- Q2 2015

So while the labor market is definitely in good shape, the longer-term trend lines looking forward are not quite as obvious.

Unemployment is at 5.3% (but…)

One of the great debates raging at the moment is how much slack remains in the labor market and whether or not the economy is at full employment. Unemployment currently sits at 5.3%, the lowest it’s been at any point during the recovery, but higher than 4.7%, the rate just before the recession began. The current unemployment rate is also very close to the 5.2% rate that most economists consider to qualify as ‘full-employment’ or the maximum employment level before employers have to begin raising wages to fill openings (often referred to as NAIRU or the non-accelerating inflation rate of unemployment).

But today’s unemployment rate masks some critical underlying trends that have troubled Fed officials, economists, prognosticators, and other ‘seers.’ Those trends include such factors as long-term unemployment, under-employment, and the seemingly complete absence of any growth in wages that one would expect to see as the labor market reach peak levels. The U6 unemployment rate, which factors in ‘marginally attached’ and underemployed workers, sits at a still-alarming 10.5%. That’s well below the 17.1% seen in Q2 2010, but still very high and clearly indicative of slack that remains in the labor market.

Wage growth is nonexistent

Despite the steady string of solid monthly job gains, wage growth has been perplexingly low, much to the consternation of economists. On Friday, the BLS announced that the employment-cost index rose a shockingly low 0.2% on a seasonally adjusted basis in the 2nd quarter. That was the smallest quarterly gain since record keeping began in 1982. Total compensation was up 2.0% compared to Q2 a year ago, but that’s a slower pace than the 2.6% year over year growth from the winter.

As the WSJ reported Friday, PNC economists Stuart Hoffman and Gus Faucher wrote in a note that, “At this stage in the business cycle, with significant improvement in the labor market, wage growth should be accelerating. Weak wage growth is also puzzling given recent announcements from big companies, such as Wal-Mart and Target, that they are raising workers’ pay.”

Productivity has fallen for 2 quarters in a row and hasn’t risen in a decade (but…)

One of the reasons some believe wages haven’t budged is because productivity in the U.S. economy has stagnated. From 1948 to 1973, U.S. productivity rose an average of 2.8% per year, but dropped to half that in the 80’s despite the onset of the computer age. Between 1995 to 2004, it rose to 3% presumably due to technology and the internet, but fell to 2% again between 2005 to 2009. Since the Great Recession, U.S. productivity has dropped to less than 1%. In a speech in May, Fed Chair Janet Yellen stated that over time, “sustained increases in productivity are necessary to support rising incomes.”

But in a great WSJ article entitled U.S. Productivity: Missing or In Hiding?, Google economist Hal Varlan is described as leading a chorus of people in Silicon Valley who claim that the government’s antiquated measures of productivity (that are based on GDP – an economic indicator conceived in the 30’s) are sorely outdated and do not even begin to account for the massive productivity gains achieved through the torrent of technology-driven innovation, quality enhancements, and efficiency impacting the economy over the past decade.

And yet, it has to also be noted that it is those very same technology advancements that are, in many cases, making certain jobs obsolete, suppressing labor demand in particular industries and job categories, and dampening wage growth as technology increasingly competes with people.

Business are finally beginning to invest (but…)

The Commerce Department announced last week that new orders for durable goods rose a seasonally-adjusted 3.4% in June from a month earlier, not only surpassing economists’ predictions of a 2.7% rise, but marking the first increase since March. The Fed also reported that industrial production rose in June and The Institute for Supply Management reported renewed optimism in its survey of purchasing managers.

But as the WSJ pointed out last Tuesday, “The promising signs mask some continuing uncertainty. Durable-goods figures can swing widely from month to month and are subject to large revisions. Much of the June increase came from the heavy-weight transportation sector and reflects a one-time surge in aircraft orders tied to last month’s Paris air show.” The article goes on to report that excluding transportation, new orders rose 0.8%, the largest increase since August 2014.

And yet, the very same WSJ article quotes Amherst Pierpont Securities chief economist Stephen Stanley, “The June results provide the first glimmer of hope for business investment in equipment in quite some time, but so far, it is no more than a glimmer.” Overall, new orders are down 2% in the first half of the year compared to a year ago. Lindsey Piegza, chief economist at Stifel Economics wrote in a note to clients that, “Without business development, hiring will remain lackluster and, more importantly, income growth will remain stagnant, continuing to restrain the American consumer.”

Consumers are spending more and Home sales are rising

Contrary to Piegza’s gloomy sentiment, consumers did, in fact, start to spend more in the 2nd quarter. Consumer spending in Q2, which still accounts for two-thirds of U.S. economic activity, rose at a 2.9% rate as compared to 1.8% in Q1, while the savings rate fell to 4.8% from 5.2%. Whether or not the additional spending was driven by falling gas prices, improved outlook, pent-up demand, or one or more of countless other factors is open for debate, but the fact remains that consumers are spending more and the economy is expanding.

As an aside, it’s interesting to note the correlation between growth in consumer spending and rising demand for labor in the retail sector. In fact, our bullish analysis of retail labor demand last Summer accurately presaged strong retail sales during the holiday season, and this year’s numbers have only gotten stronger.

Retail Job Growth July 2015

If correlations hold true again this year, which we fully expect them to, we can expect strong retail sales again for at least the remainder of the year.

Home sales are at the highest level of the current expansion

Home prices continue to climb, as indicated by the Standard & Poor’s/Case-Shiller composite home price index which rose 4.9% year-over year in May, the same level as April but below the consensus estimate increase of 5.6%. David Blitzer, chairman of the index committee at S&P Dow Jones Indices said in a statement that, “As home prices continue rising, they are sending more upbeat signals than other housing market indicators.” But as the New York Times pointed out, “[Blitzer] called first-time home-buyers ‘the weak-spot’ for the price plateau.”

The economy grew by 2.3% in the 2nd quarter (after an abysmal 1st quarter)

Although the Commerce Department initially reported that the economy contracted 0.2% in Q1, a number that was later revised to a positive 0.6%, the fact remains that GDP growth was horrendous in Q1. Fortunately, the economy snapped back to life (or in any event, it finally stopped snowing in Boston and the L.A. port strike was resolved) in the 2nd quarter, growing at a rate of 2.3%, driven almost entirely by strong consumer spending.

In regard to the GDP revision, it should also be pointed out that the frequency of revisions to government data creates a entirely unique set of challenges in trying to read economic tea leaves. As a Reuters article stated, “The revision to first-quarter growth reflected steps taken by the government to refine the seasonal adjustment for some components of GDP, which economists said left residual seasonality in the data, as well as new source data.” Between seasonal adjustments, flawed data sets, antiquated methodologies, and time lags, just to name a few deficiencies, relying on government data can be as befuddling as Schrodinger’s cat.

ISM’s Purchasing Manager Index (PMI) is sending mixed signals

In July, ISM’s Purchasing Manager Index came in at 52.7. And although a reading above 50 indicates, in theory, a positive outlook for business spending and the economy in general, July’s number is below June’s and quite a bit below July of last year.

ISM PMI

In looking at PMI trends since January of 2014, it’s tough to know whether to be encouraged about being up from lows earlier in the year or discouraged by being so far below peak levels in the 2nd half of last year.

Consumer confidence drops most in 4 years (but…)

Despite the growth in the economy, the Conference Board announced last week that consumer confidence fell the most in any month in the past 4 years, surprising most economists who had expected a positive report. The Conference Board cited a ‘less upbeat’ jobs outlook and sluggish home sales that had stalled in May. But as Ryan Sweet, senior economist at Moody’s, was quoted as saying in the New York Times, “This seems to be an aberration. Consumers were probably freaked out by the problems in Greece and the Chinese stock market, and the volatility on Wall Street.” I’d certainly like to think so, but I’m not so sure that the average consumer is too worried about the European Union or the Chinese stock market.

The University of Michigan’s consumer sentiment index also fell in July, but was still up nearly 14% from where it stood in July of last year. Furthermore, the Michigan report found that households fully expect their incomes to rise over the next 2 years, in sharp contrast to the findings of the Conference Board.

Jobless claims fall to lowest level in over 40 years

On Friday, the Labor Department announced that jobless claims for the week ending July 18th fell by 26,000 to a seasonally adjusted 255,000, the lowest level since 1973. As Jim O’Sullivan, an economist with High Frequency Economics, stated in the WSJ, “This week’s claims reading may have been exaggerated on the low side but there is certainly no sign of the labor market losing momentum. The message: Employment growth remains more than strong enough to keep the unemployment rate declining.”

Chris Rupkey, a U.S. economist for Bank of Tokyo Mitsubishi UFJ stated rather bluntly that, “Current labor market conditions are the tightest in a generation. To argue that the economy is not yet at full employment, ‘good times’ levels, those arguments are simply incomprehensible.”

But then again, July claims are always volatile due to the way the auto industry works with temporary layoffs and rehiring. Earlier in July, jobless claims matched the highest level since February, and the 4-week moving average which smooths out week-to-week volatility, has not changed much at all since the spring.

New & total job openings in LinkUp’s job search engine

I’d love to say that by turning to our own data, we can gain a much clearer picture of where things are headed but it’s not quite that simple. Our reading of the tea leaves is very clear, and the pieces do all fit into place, but each individual piece of LinkUp’s data is just as fuzzy as every other data point highlighted so far.

For example, month over month gains in new and total job listings in our search engine have been pretty strong all year, with an average month-over-month increase of 9.4%.

2015 LinkUp 50:50 blend thru July

As background, LinkUp is entirely unique in the industry in that we only index jobs directly from corporate websites. Our index of 3.2 million job openings is updated daily and sourced exclusively from 50,000 company websites throughout the country. LinkUp does not aggregate duration-based, pay-to-post job listings from job sites in the way that Indeed, Wanted Analytics, or Burning Glass do, so our data does not contain duplicate listings or job pollution (scams, fraud, lead-gen, phishing, resume hoarding, staffing/recruiting/temp, identity theft, etc.). As a result, LinkUp’s labor market data is real-time and consists of the largest, highest-quality database of job listings in the market.  

LinkUp’s jobs data for July

But after strong back-to-back months in May and June, things have cooled off a bit in new and total job listings. New and total job listings rose just 3% in July – still good but a slower rate of growth that the previous 2 months and well below the average for the year. Equally as unclear is the fact that the exact same number of states showed a decrease in new job listings as those that showed an increase in new job listings. Total job listings rose in 33 states, but again, the total increase in total job openings rose just 3%.

Jobs By State July 2015

Jobs by category

July’s jobs by category paint almost an identical picture – tepid growth of 3% with an equal mix of gains and losses in new job openings in the 33 categories tracked by LinkUp.

Jobs By Category July 2015

Job Duration fell as hiring velocity rose sharply in July (but…)

LinkUp’s Jobs Duration report also sends a bit of a mixed signal. LinkUp’s ‘Job Duration’ report shows the length in days of jobs that have rolled off the site during the prior 6 months. Between April and October last year, the average job duration dropped from 51 days to 41 days as the ‘velocity’ of hiring by U.S. employers increased. In 2015, job duration rose back up again to 49 days in June as employers found in harder to fill openings in a tighter labor market, but in July, Job Duration fell sharply to 45 days.

Job Duration July 2015 (simple)

While this might simply reflect seasonal summer hiring, it could also point to a longer-term trend indicating that hiring velocity is accelerating again.

Putting all the pieces together

Obviously, the central question is how strong the economy is, how long it can sustain positive monthly job gains, and whether or not the Fed will raise rates in September, December, or next year.

LinkUp New & Total & blend thru Q2 2015

First, we’ll take our forecast for July’s non-farm payroll number. Based on the 11% and 17% increases in job openings on LinkUp in May and June respectively, we are forecasting a strong jobs report for Friday with a net gain of 310,000 jobs.

July 2015 NFP 2

It is our longer-term view that, in really broad brush strokes, the economy is very strong, consumers and businesses will continue to spend, wage inflation is going to surprise on the upside sooner than anyone expects, job growth will remain steady through at least the end of the year, and the Fed will raise rates in September.

For certain, the rate increase, the inflation jolt, the popping of the tech bubble ($10b valuation for WeWork – WTF), continued and even rising ineptitude within Congress, and rocky markets due to Europe and China, among others, will all create some additional turbulence, perhaps even inducing nausea at times. But with strong fundamentals that continue to chug along slowly yet methodically, the view toward the horizon continues to look very good.

So that’s our tune. The Rest Is Noise.

 

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P.S. – I cannot say enough about REDEF. I immediately became a huge fan. Soon thereafter, I became a fanatic. And with each day’s insanely well-curated mix of articles and Jason’s phenomenal rantnrave://, I am annoying more and more people with my incessant demand that they drop whatever it is they’re doing and sign up. It is, simply, the best content on the web.

P.S.S. – Jon Stewart’s last show Thursday night. Immense sadness.

 

 

August 3, 2015 / Molly Moseley

Ditching annual reviews? How to create something better

Last month, Accenture announced it would no longer rank employees based on annual performance reviews. Deloitte abandoned the tired yearly review at the end of the first quarter. Microsoft did it years ago.

It’s no secret that many employees and even management feel annual review practices are flawed. “The favorite definition of performance appraisals I ever found was that they are like fruitcake,” says Sharon Armstrong, author of The Essential Performance Review Handbook. “You get it once a year and no one wants it.”

What’s promising is that ditching the annual performance review seems to be the “in” thing to do among prominent companies. LinkUp has long advocated the need to rethink employee performance reviews. But if you’re going to toss out the old way of doing things, what are you putting in its place? 

Matt Poepsel, Ph.D., vice president of product management for workforce analytics firm PI Worldwide, sums things up perfectly: “Accenture and other Fortune 500 companies seem to be intent to re-engineer performance evaluations that merely ‘suck less,’ rather than directly tie them to what matters most—performance improvement. This will inevitably require a level of employee and manager support and education that too few companies make.”

The flaws in an annual review system seem pretty obvious. How can an employee be expected to improve his or her performance if management feedback occurs only once a year? What’s more, how is he supposed to glean achievable goals and concrete direction from a reviewer who may or may not (more often not) be directly involved in his daily performance?

“The problem with most performance reviews that rank people is you have to be really, really clear what is required for them to get to the next ‘ranking,’ ” says Jo Clarkson, UK operations director for The Alternative Board, an executive peer advisory board provider. “And when you tell them what they have to do, and they do it, you are obligated to give them that new ranking. The problem here is that it’s never that simple to say exactly what’s expected and then measure it objectively.”

Providing employees with feedback and guidance once a year is simply “a waste of time,” Clarkson says, and we agree. Performance evaluation and improvement need to be part of an on-going, year-long dialogue between employees and the managers who directly oversee them. And no matter how frequently or infrequently your organization does them, performance reviews need to focus on the overarching goal of continuous improvement, rather than just punishing poor performance or applauding good.

Plenty of effective alternatives are already in use by savvy employers, and the most successful ones emphasize building a better relationship between employees and supervisors.

“The happy medium is engaging with employees through regular, ongoing, two-way dialogue,” says Dominique Jones, vice president of human resources for Halogen Software. “By simply listening to what employees have to say, managers can provide meaningful feedback that will not only help employees in their current role, but also help achieve career aspirations. Feedback should also focus on the employee’s strengths more than correcting faults. By spending more time telling employees what they did or do well, it makes it easier to identify and replicate the conditions that support high performance.”

If your current performance management system isn’t resulting in definable performance improvement, it’s time to reassess and consider updating your processes.

“Just because performance reviews have become so ingrained in many corporate cultures doesn’t make them acceptable when considering the cost and ill will that often accompany them,” Poepsel says. Instead, companies should “design a performance improvement program from the bottom up, starting first with the employees. What do they need most to succeed? Once those needs and desires are understood, move up a level to the Managers. What are their needs and preferences in terms of participation and follow-through? It’s important that the loudest voices in the program-design effort are those who will play the largest role in its success or failure.”

So let’s embrace change and do something about it. Technology has made it easier than ever for managers and employees to communicate effectively and constantly about everything, including how an employee can improve his or her performance throughout the year.

July 21, 2015 / Stephanie Anderson

Feeling underpaid and overworked? What to do if you really are

shutterstock_222370354Nearly everyone at some point in their professional life feels they’re overworked and underpaid. Often, the feeling is nothing more than an impulsive reaction to short-term frustration. You’re putting in extra hours on a big project, and no one’s even said thanks let alone offered to pay you overtime or give you comp time.

Nobody wins

But some people really are underpaid for the work they do. When that happens, no one wins, not even the employer who may think they’re saving money by paying workers less than market value for the job they do. Many good people who are underpaid and feeling undervalued will leave, looking for an employer who pays better and appreciates them more.

The low-paying employer then has to replace the skilled worker, and may have to pay a higher salary to a new hire who’s unproven and inexperienced. Others who are underpaid, but who like their job, may stay put and grow more frustrated every year that goes by without a raise to bring your salary in line with those paid to incoming workers doing the same job.

There’s not much you can do about an employer whose priorities are out of whack like this, but if you think you’re underpaid and you’re unhappy about it – and who wouldn’t be – it may be time to take action. Feeling underpaid and unappreciated can lead you to feel disengaged in your current job and affects your quality of life.

Calculate your worth

First, confirm that you’re really underpaid. Plenty of online tools are available to help you calculate what you should be earning in your job, your industry, your level of expertise and education, and your region (like Glassdoor). You may find out that you’re paid more fairly than you thought. If you still feel like you want or deserve more money, think about ways you can enhance your value to an employer. Perhaps you need to go back to school. Maybe earning a certain certification will boost your earning potential.

Take action

If you really are underpaid, it’s time to take action. Try to negotiate a market salary adjustment. Ask your company what the pay range is for your job and determine where you are in that range. Let them know you feel you are worth more, and back it up with data from comparable companies in your industry. Share with them the research you’ve done into typical salaries for your job, skill level and experience. Be sure to remind them of your accomplishments and performance. Make your case calmly and strongly.

If you’re already interviewing elsewhere, and better yet if you already have a job offer, you can absolutely use that as a bargaining tool. Be sure to share what will hopefully be a higher salary offer and underscore the value you offer as an experienced and loyal employee.

 

If a salary increase is absolutely off the table, ask if your employer is willing to do something else to “sweeten the pot” for you. There are a number of ways employers can boost employee engagement outside of salary, such as leadership training, an improved work area, flexible hours and rewards or recognition.

Unfortunately, the reality is not every employer will be open to negotiating a market salary adjustment. If you come up against an entrenched employer, you may need to move on to a new job to get the salary bump you deserve.

July 16, 2015 / Molly Moseley

Help your tech-addicted employees unplug with these 4 tips

Kids think the darndest things, and sometimes a child’s unique perspective creates an “Oh, wow!” moment. That happened to me recently when I discovered that my 4-year-old daughter didn’t realize the foundational purpose of a cell phone is to make calls. She thought mobile phones were designed to surf the Web, send text messages and pictures, and play games. That’s pretty telling, isn’t it?

Given that fresh perspective, maybe we shouldn’t even call them “phones” anymore. Maybe we should start referring to those devices we’re all so attached to as “mini-computers.” And make no mistake, many of us—including a lot of your employees—are addicted to our smartphones. There’s now even a disorder called technology addiction. Although it’s not yet recognized by the American Psychiatric Association, with health media from Healthline and WebMD to the Huffington Post reporting on the growing trend of tech addiction, you have to think healthcare professionals are aware of the issue.

In fact, one Huffington Post article made a compelling case for the many different ways overuse of technology can affect our bodies and minds. The well-researched article pointed out that there was evidence to link excessive tech to everything from acne and back pain, to feelings of loneliness and withdrawal.

Addiction of any kind is damaging to an employee’s mental health, so there’s definitely value for employers in encouraging their workers to unplug for a while, and reduce their dependence on their mobile devices. If you’re looking to help your employees reduce their tech dependence, here are some ideas that could help:

1. Lead by example. Don’t send an email or text when you could just as easily stroll into someone’s office or cubicle to communicate. Face-to-face interaction fosters relationships and better relationships make for a more efficient team. Encourage employees to take the extra moment or two to interact personally with each other, especially if they work in the same office.

2. Ban smartphones from meetings. There’s a meme running around social media about having just spent an hour in a meeting that could have been an email. But sometimes in-person meetings are more beneficial, being the most efficient way to get something done. When you meet, keeping smartphones out of the room can reduce distractions and help make your meeting run more smoothly.

3. Respect off-time. Technology has made it far too easy to encroach on someone’s personal time. Institute a company policy that emailing, texting or otherwise contacting someone during off hours or vacation time is strictly reserved for emergencies. So it’s okay to text Joe after hours that tomorrow morning’s 9 a.m. meeting has been moved up to 8 a.m., but not to remind him about a report that’s not due until the end of the week. Use a gut check, can this wait until tomorrow? If so, send it then.

4. Rethink notification settings. This one comes from Gizmodo’s Field Guide. Blogger David Nield makes the case that you (and your employees) don’t need to know absolutely everything that’s happening on social media (Twitter, Facebook, WhatsApp) the instant it happens. In my opinion, that’s doubly true during work hours, when employees should be focusing on work-related information instead of eyeballing photos of the steak lunch their college buddy is currently enjoying at a big-name Manhattan restaurant. Nield recommends disabling push notifications of social media “news” and updates that you really don’t need.

Technology is a great enabler, but it isn’t necessary or even useful in every workplace situation, setting and moment. Encourage employees to really think about how they use technology in the office, and to look for ways to streamline how and when they use it.

Bonus, speaking of funny “Oh wow” moments about kids and technology check out this post from Bored Panda: 15+ Funny Tweets Prove That Kids Today Have No Clue About Old Technology … then get back to work!