The tables turn – Workers now have upper hand as employers struggle to find qualified employees
BY MICHAEL KITCH, LACONIA DAILY SUN
LACONIA — As the unemployment rate in New Hampshire has steadily shrunk to 2.6 percent, the next to lowest in the country by just one-tenth of 1 percent, the balance of power in the labor has shifted from employers seeking qualified employees to employees seeking greater opportunities.
Christine St. Cyr of Central New Hampshire Employment Services, Inc., which has been matching people to jobs for 36 years, said that, with the tight labor market, “Qualified candidates are working. They may be underemployed, but they are working.” She stressed that with memories of the recession fresh in their minds, working people require attractive incentives to relinquish the security of a steady job for a new position.
On the other hand, St. Cyr said that employers, buffeted by the years of recession and uncertainty, grew accustomed to what she called “a flexible workforce,” whose numbers, hours and wages could be adjusted to match the fluctuating volume of of their business. In particular, she said that companies relied on temporary and contract workers, whose compensation is paid by the employment agencies that place them, rather than directly hire people.
“Companies have openings and there are qualified candidates,” said St. Cyr, “but, employers need to step up and make a commitment to the employee.” She added that apart from a committing to directly hire their employees, employers must be willing to pay competitive wages and offer attractive benefits.
Gary Adams, vice president of the agency, suggested that employers change their approach to interviewing candidates to succeed in an an increasingly competitive labor market.
“Qualified candidates are getting multiple offers,” he said. “Interviewers should explain what the company can do for the candidate, not just what the candidates can do for the company.” As an example, he said that one candidate chose one company over another because one interviewer outlined the opportunities for further education and professional advancement, while the other dwelt on the tasks and responsibilities of the position.
St. Cyr said that with offices in both Laconia and Concord, the firm serves clients across the entire state, with its strong suit in the manufacturing sector. Moreover, she noted that the firm seeks candidates throughout the Northeast, adding that the more competitive employers become, the wider the field of prospects they can draw upon is.
“”The labor market has turned around,” Adams said. “It’s an employee’s market.”
Russ Thibeault of Applied Economic Research of Laconia, a consulting firm, expected the tight labor market to linger. Noting that the economy has recovered from recession and has added 40,000 jobs since 2010, he questioned whether this pace can be sustained without more robust growth of the workforce.
The New Hampshire Department of Employment Security this month reported that in 2015 the labor force participation rate, which measures the share of residents aged 16 and older either working or seeking work, was 68.4 percent. Although among the 10 highest of the 50 states, the rate represents a decline from 71.4 in 2005 and 70.3 percent in 2010.
The decline reflects the slowing of population growth and the aging of the workforce. Since 2010, the population has risen just 1.1 percent, or by less than 15,000. While those between 25 and 64 represent the largest share of the working-age group, those between 16 and 24 and those 65 and older may also be counted in the workforce. Between 2005 and 2015, the youngest group, those 16 to 24, increased just 1.3 percent while the majority of working-age residents between 25 and 64 decreased by 1.9 percent and the share of those 65 and older rose 3.9 percent.
While the labor force participation rate of 25- to 64-year-olds has remained consistent at above 80 percent for all but those 55 and older during the past decade, it has risen among those 65 and over, climbing from about 26 percent to 32 percent – from a quarter to a third. More people are working past the traditional retirement age as fewer are covered by defined benefit pension plans and more find their savings eroded by the recession.
“We’ve added 40,000 jobs on top of a stable labor force,” Thibeault said. He said that the shortage of labor has been reflected in upward pressure on wages, particularly in those professional and technical sectors that have generated the most job growth, but also in manufacturing where average hourly wages have climbed from below $18 to over $20 since 2012.
Thibeault foresaw two prospects. On the one hand, demand for labor will draw migrants from other states, which would increase the population, expand the workforce and support job growth. On the other hand, if the population continues to grow slowly and age rapidly, the expansion of employment cannot be sustained.
“The big difference is population growth,” he said.