Mind The Labor Gap

Welcome back to The Supply Times. Here’s what I’ve got on tap for you this time around:

• Unemployment’s down in the US, but for every job that companies are filling, there’s almost two vacancies. Where have all the workers gone?

• Some swanky hiring innovations from the tech world

• A roundup of things I’m reading, watching, listening to, and thinking about

• And of course, snarky cartoons!Subscribe now

Industry Highlights: Lagging Labor

Here’s the good news: US unemployment is on the decline. Employers have created more than eight million new jobs in the last 15 months, and workers have more opportunity and higher wages than in recent memory.

The bad news? It’s still not enough.

Despite a $1.9 trillion stimulus package and a strong push to recover from the struggling Covid economy, high inflation, labor gaps, and supply chain disruptions have bogged down any progress the country was hoping to make.

“This is the worst year we’ve had in 40 years in terms of real wages,” Harvard University economist Jason Furman told the Financial Times. “You’ve had a small number of people gaining and a large number of people losing, and so I don’t find it at all surprising that people who have gotten the biggest pay cuts they’ve ever gotten when adjusted for inflation aren’t that happy.”

Many have blamed President Joe Biden’s administration for not doing enough. Biden’s taking a beating in the polls, with most estimating his approval rating at around 40 percent—approaching the lowest level since he took office. A recent Ipsos poll found only 37 percent of Americans approved of the way he was handling the economy.

Biden has done his best to fire back, rolling out a three-point plan for fighting inflation in a Wall Street Journal op-ed that included reducing the cost of everyday goods by fixing broken supply chains, improving infrastructure, and cracking down on the exorbitant fees charged by foreign ocean freight companies.

Biden warned that in mitigating inflation, job growth will “look different,” writing that we will likely see fewer record job-creation numbers. But honestly, that might be for the best, given that according to The New York Times there are currently 1.9 vacant jobs for every filled one. Bloomberg reports it’s the tightest job market we’ve seen since World War II.

This phenomenon has economists scratching their heads. Some point to wage data, which suggests geographic locations and industries where wages have increased have fewer worker supply issues.

Others tout the incredible number of workers still leaving their jobs—what the Bureau of Labor Statistics calls “quits rates”. In April alone, 4.5 million Americans left their jobs for greener pastures—a rate that has held steady for over a year.

But those are just data trends. The true motive behind this gap is anyone’s guess. “I do wonder whether there has been a shift in preferences to wanting a bit less work and a bit more ‘do things for ourselves,’” University of Michigan economics professor Betsy Stevenson told the Financial Times.

In the same article, ADP chief economist Nela Richardson agreed. “We have a situation where it’s not really worthwhile to participate in the labor market,” Richardson said. “It’s expensive to go to work, especially if you don’t make a lot and you have to find childcare. You have to put gas in the tank, clothes are more expensive, food is more expensive. So are you really winning by working?”

Unless inflation rates normalize soon, more and more Americans might be asking themselves the same question.

The Future of Work: Picking up the Slack

I still love staining my fingers with newsprint while paging through a hard copy of The Wall Street Journal daily and The Chicago Tribune every Sunday, but when it comes to finding a job, surfing the classifieds section is as antiquated as Eddie Murphy’s music career.

The real opportunities, of course, are found online. A Georgetown University study estimates between 60 and 70 percent of job openings are posted online, while revenues for print advertising have dipped over 80 percent since 2005.

It might seem like job boards like Monster or Indeed are the place to find your next gig, but data suggests that nearly 70 percent of jobs were found via networking—50 percent from friends, and 37 percent from professional networks.

According to an article from Balance Careers, many employers use what they call the “hidden job market” to avoid the lengthy and expensive process of open online applications. Rather than posting an opening, employers try to hire internally, obtain referrals from current employees, or use headhunters to find candidates.

It probably comes as no surprise that many people also leverage social media to find jobs. A Glassdoor survey reported that 79 percent of candidates search for employment using social media. The primary platform for candidates? LinkedIn, of course. A Statistic Brain study found that 122 million people have received an interview through LinkedIn, which is not shocking, considering 95 applications are submitted through the platform every SECOND.

But according to a new Wall Street Journal article, there might be a new hiring boss on the block: the instant messaging platform Slack.

Slack’s no slouch in the business world: it reportedly has more than 10 million daily users, and 43 Fortune 100 companies pay to use it as an inter-office communication tool. And now, it’s helping employers find job candidates, too.

Job candidates who connect with hiring managers via Slack might be fast-tracked through the application process because they have a personal connection from the groups, career coach Stephanie Ciccone-Nascimento told WSJ. She said she belongs to seven Slack career communities, and they’re especially helpful for people shifting into new fields.

“I’m no longer a resume in a pile,” said Maria Velasquez, who got her most recent job through a Slack channel. “The community knows me on a personal level.”

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About

RE: Supply Chain, Work, and Beyond

• 📕 Read I’ve read a few books on former GE CEO Jack Welch, most of which have lauded him as the best executive of all time. But a recent one suggests quite the opposite. In The Man Who Broke Capitalism, author David Gelles argues that the GE boss’s brutal drive for efficiency led to a long-term decline. Gelles compares Welch’s tactics of downsizing, dealmaking, and financialization to imperialism—tactics that are much funnier when Welch is parodied by Alec Baldwin on the NBC sitcom 30 Rock.

• 📺 Watch:As a long-time fan of famed business guru and CEO consultant Ram Charan, it was awesome to watch and interact with him live at the Corcentric Symposium this week in Orlando. He did not disappoint with his insightful comments on the state of business and how supply chain professionals play a critical role in helping the US maintain its competitive edge and supremacy as the No. 1 economy. His analysis on how China was rapidly catching up and how it’s a sphere-to-sphere global economic battle with countries taking sides. For more on this fascinating topic, we’ll have to read his next book coming out in September.

• 👂 Listen: What do you do when you’re suffering from a midlife career crisis? I wouldn’t know personally, but in my world, this is something that comes up frequently. If you’re worried about transitioning to a different career, I’ve got the podcast for you. It’s called “How To Start Over,” and in it, Atlantic staff writer Olga Khazan analyzes what it takes to change our relationships, our work, and our perspective when it comes to one of life’s greatest challenges: starting over.

• 💡 Think: In a world where everyone’s stressed about their jobs, it’s fun to imagine the possibility of a four-day work week. Apparently, so do the Brits, apparently, because according to an SHRM article, more than 3,300 workers at 70 British companies initiated a six-month pilot of a four-day work week with no loss of pay. The study will determine how employees respond to an additional day off, and decide if it affects stress and burnout levels. It seems like a great move forward that could revolutionize the way we do work—then again, maybe it’s just the people that need a vacation that are most excited about this, e.g. yours truly.

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