What We Already Know About the 2019 Employment Market!
Local Employment Trends – 2019!
On the heels of our 2018 record breaking job, the first of January marks that time when we need to prepare for the changes in the marketplace that are most likely going to impact Northwest employers in 2019.
Here are SIX TRENDS we started to experience in 2018 that we’re pretty sure will have an even bigger impact in 2019:
#1 The costs of being an employer in Washington State are already amongst the highest in the nation, but will continue to increase.
The price you paid to be a Washington employer in 2018 was amongst the highest in the nation and will get even higher in 2019.
- The real costs associated with the 2018 mandatory sick leave requirements are just starting to surface. More employees are now aware of this benefit and how to use it.
- The new employer tax that pays for 12 weeks of mandated paid Family and Medical Leave kicked in January of this year. The real costs of this benefit in terms of employees actually using their 12 weeks of paid leave, will not be felt until 2020.
- Our State’s Minimum Wage requirements, at $12/hr, are the second highest in the nation, right behind the $13.25 minimum wage in Washington DC. For most Seattle employers, the minimum wage increased to $16/hr.
- Our SUTA (unemployment benefit) tax is now levied on $49,800 worth of base wage – one of the highest base wages in the nation.
When all the payroll taxes, increased wage and benefit costs get added to increases in the costs of healthcare premiums and the costs associated with recruiting and turnover in a tight labor market, don’t be surprised if your per head employee costs increase by as much as 10% in the coming year.
# 2. Employers will continue to accelerate their reliance on third party employer solutions as a way to offset these increased costs!
We believe that decisions to off load the administrative and compliance burdens of the employee-employer relationship will continue to drive the “gig” economy. Employers will increasingly turn to more flexible, “on demand” staffing models as a way to get work done without burdening themselves with fixed costs.
Nationwide, the temporary staffing industry is targeted to grow anywhere from 3-8% depending on which segment of the contingent workforce served. In the local marketplace, the use of temporary services is likely to grow even faster.
- With technology employers leading the way, the local area continues to be a mecca for temporary and contract workers who prefer a series of projects and time limited work assignments over core work commitments.
- While the use of 1099 workers has had its share of legal issues, employers who want to tap into the free lance community now have ways to mitigate that risk. One of the solutions PACE provides, our employer of record service model, turns our client’s 1099 workers into our W2 employees. That service option grew by 25% in 2018, a pattern we think may be repeated in 2019.
- With hiring levels reaching 50 year highs in 2018, the temp to hire staffing model continued to be a popular recruiting model. In a marketplace where employers are under pressure to access top talent, the temp to hire staffing model is still a quick and “no or low cost” way for employers to find and hire the talent they need.
#3. Locally, high growth businesses like Amazon and Google will create unique challenges for small employers when it comes to their hiring, pay, and retention strategies.
With “large company” hiring targeted to be at all time highs, the high performance employees who work for smaller companies will increasingly be targeted by larger companies. And “job switching” won’t just be about millenials, as some might think. We’re seeing employees of all age groups willing to change jobs for better pay, benefits, or work schedules that large employers have the resources to offer.
To compound the problem, employees are more willing than ever to relocate for a job they believe better meets their needs – a shift in today’s recruiting dynamics that is clearly an advantage to larger companies.
Smaller companies definitely need to be on their toes when it comes to knowing what’ s important to their employees and making sure they deliver.
# 4. Finding and evaluating employees based on a very specific set of “soft skills” will become an even more important component of successful hiring.
While selecting employees based on both their hard and soft skills have always been important to hiring success, many employers are now selecting employees based a very specific set of soft skills important to how they do business. Companies will spend more time defining their culture and determining what specific types of behavioral qualities are important to “cultural fit.”
It’s no longer enough to look for generic traits like “good communication skills” without carefully describing what “good communication skills “ looks like behaviorally. Companies who learn how to identify the behaviors important to their success and how to spot those behaviors in the hiring process are companies who will get a step up on the recruiting process.
#5. The human elements of “human resources” will continue to create angst for hiring managers and recruiters.
Candidates who don’t return phone calls, cancel interviews at the last moment, or disappear just before they are scheduled to start work, have and will continue to be the norm, creating a whole new set of frustrations for hiring managers and recruiters. To add even more pressure, “ghosting” is now spreading into already employed workforce where employees think nothing of giving notice on Friday expecting to start their new job the following Monday.
Because the underpinnings of candidate and employee “ghosting” are as much socially driven as market driven, there’s little hope that things will change soon. Recruiting has definitely become a contact sport – and a lonely one at that described by an article in the Wall Street Journal
#6. Our clogged freeways will continue to play a significant role in recruiting and retention of employees in the local job market.
Depending on where your company is located, the “commute” has been and will continue to impact hiring and retention. Gone are the days when employees were willing to spend a couple of hours each day commuting to and from work. Today’s employees think nothing of taking significant pay cuts to find work closer to home.
And while we almost always recommend that a client limit their talent searches to “geographically compatible” employees, we know that recommendation often reduces their access to some high quality candidates. For sure,it will lengthen the hiring process.
When one of our clients needs to hire a candidate with a “commute” we encourage them to consider more commute friendly solutions…
- Flexible work schedules
- Bus, train or parking subsidies
- Work from home privileges
- Modified work weeks
We anticipate flexible staffing solutions to grow in number and popularity over the next 12 months. Employers slow to pick up on these remedies will definitely pay the price in 2019.
Looking back and ahead to highlight the coming year’s hiring and employment trends is something PACE does every year. Its our way of helping our clients get prepared for what we believe will impact them in the coming year.
If you’d like more information on these trends and how they might impact your staffing needs in the coming year, we’d love to hear from you. Contact our Partner Service and Solutions team at 425-637-3312 or email us at firstname.lastname@example.org