According to the U.S. Bureau of Labor Statistics unemployment is at a 16-year low (4.3%), but the pace of hiring slowed as baby boomers retired and fewer Americans looked for work.
Mark Zandi, chief economist at Moody’s Analytics, said: “Job growth is rip-roaring. The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force. Increasingly, businesses’ number one challenge will be a shortage of labor.”
The impact of a tight labor market on organizations is clear, decreasing their capacity to serve customers, develop innovations and maintain levels of productivity. As the labor market continues to tighten employees have more choices, and you can expect that top talent will be aggressively pursued by your competitors.
In times like these, it is important that business leaders identify their top talent and commit to keeping them in place by engaging them and providing a solid future with your organization. Anticipate your talent needs and begin to close that gap by developing your organization’s talent bench. Provide regular mentorship and coaching opportunities that enable personal growth. Foster an environment of fairness, dignity, and respect, rather than command & control. And yes, increase wages! The ability to offer higher wages can give you a strong advantage while hiring in a tight labor market, affording you time to develop other long-term strategies.