As U.S. employers face one of the largest talent shortages since 2007 and the development of automating technologies such as artificial intelligence picks up steam, the Association's Jobipedia and recruiting software initiatives seek to help members succeed in the brave new world. What follows is an update on where these issues and initiatives stand as well as the broader outlook for economic growth and hiring.
Artificial Intelligence The issue of the impact of artificial intelligence on the workplace has already seen action in Congress in the context of a debate over autonomous vehicles. Under current law, driving rules are set by states. Last year, the House passed H.R. 388, the SELF DRIVE Act, and the Senate is considering a companion bill (S. 1885, the AV START Act) to pave the way for interstate operation of autonomous vehicles by preempting these state laws. In doing so, a dichotomy has emerged, one likely to be seen in other debates regarding artificial intelligence. On the one hand, there are already tens of thousands of trucks not being driven in the United States because of a shortage of 50,000 drivers, a number predicted to increase in the coming years. On the other, there is the public’s queasiness over how advanced automation will change employment opportunities. At the urging of organized labor, the AV bills unanimously approved by the House of Representatives and the Senate Commerce Committee carved out an exemption for any vehicle weighing more than 10,000 pounds. In other words, autonomous cars would be protected from conflicting state laws and permitted to operate anywhere in the United States under a single federal driving law. However, trucks and buses would be blocked from receiving this same protection, despite the fact that autonomous trucks work best on highways and will need drivers to navigate crowded city streets. Final negotiations are still underway before S. 1885 is brought to the Senate for a vote, but the debate demonstrates that implementing AI in the workplace may require those seeking to deploy the technology to pay far more attention to its impact on the humans who believe they will be adversely affected.
Recruiting Software Initiative As announced in December, HR Policy Association has created the Recruiting Software Initiative (RSI) to help its members better understand the new hiring and recruiting software solutions integrating artificial intelligence that are now available in the market. A key element in our evaluation will be determining the extent to which each one mitigates unconscious bias. The Initiative is chaired by Stephanie Lundquist, Executive Vice President and Chief Human Resources Officer at Target Corporation, and supported by talent acquisition leaders from member companies. A Request for Information will be distributed this month to the 60+ software companies offering solutions in this space, and the Committee’s initial findings will be presented at the Association’s 2018 CHRO Summit in Orlando. If you have any questions or would like to learn more, please contact Mike McGuiness at [email protected]. We would also appreciate any suggestions members may have regarding solution providers that should be considered by the Initiative.
Jobipedia Last year, Jobipedia, the Association’s hiring resource for interns and first-time jobseekers, generated over 2.1 million unique visitors searching for hiring advice. It helped create nearly 1,000 resumes for interns and entry-level job seekers, and hosted more than a dozen webinars for college students, recent graduates, interns and co-ops. With thoughtful guidance from Caterpillar CHRO Cheryl Johnson, and Chair of the Jobipedia Steering Committee, Jobipedia has seen tremendous growth across the past several years. And sights have been set high again for 2018. A new website, along with a new logo, will be released early in the year. It will offer improved functionality so users can connect with content more easily, and Jobipedia-contributing companies will receive more strategic placement and promotion of their available opportunities and internships. More “on-demand” content will be developed, including recordings of our webinars and short video answers to frequently asked questions. For organizations seeking an opportunity to assist Jobipedia’s target demographic of college students and recent grads, please contact Mike McGuiness at [email protected].
Economic Trends U.S. economic growth is expected to rise 2.5 to 3 percent in 2018 with tax reform buoying employers and rising compensation sustaining consumer spending. Consumer confidence remains at historically high levels, suggesting economic growth will continue well into 2018. Infrastructure spending, if enacted, is not expected to have much of an impact until 2019. Employers are projected to add around 160,000 jobs per month in 2018, down from 174,000 jobs in 2017 as the economic expansion continues to mature. The unemployment rate is expected to average 4.0 percent throughout the year, down from 4.4 percent in 2017, and the lowest level since the dot.com bubble in 2000. The share of households who expect their income to rise in the next six months increased to 22.3 percent in December, up from 20.3 percent, and the share who say jobs are currently hard to get fell to 15.2, its lowest level since 2001. Capital expenditures, a major driver in the U.S. economy, are expected to increase by 2.7 percent in the manufacturing sector and 3.8 percent in the non-manufacturing sector.
- Hiring Slows in December, Unemployment Rate Remains at 17-Year Low Employers added 148,000 payroll jobs in December as weak seasonal hiring in the retail and professional and technical services industries held the number down. The unemployment rate remained at 4.1 percent, its lowest rate since the dot-com boom in 2000, but average hourly wage growth remains restrained at 2.5 percent over the past year, well below pre-recession rates (3.2%). However, financial activities (3.6 percent), leisure and hospitality (3.6 percent), information (3.0 percent), and transportation and warehousing (3.2 percent), and are reporting strong year-over-year hourly wage gains. In December, five industries accounted for 88 percent of the increase in payroll jobs:
- Health Care (+31,400);
- Construction (+30,000);
- Bars and Restaurants (+25,100);
- Manufacturing (+25,000); and
- Administrative Support Services, including Temporary Help (+18,600).
- Global Hiring Plans With the U.S. labor force participation rate well below its pre-recession level and immigration visa programs under greater scrutiny, U.S. employers are facing one of the largest talent shortages since 2007. Almost 65 percent of manufacturers are having difficulty hiring workers, with 44 percent raising wages to recruit new hires and 44 percent offering additional training. Service sector employers are facing similar talent issues with 61 percent having difficulty hiring workers, 37 percent raising wages to recruit new hires and 52 percent offering additional training. According to ManpowerGroup, hiring plans are greatest in Japan, Taiwan, Costa Rica, India, and Hungary, and lowest in Switzerland, Brazil, Czech Republic, Peru, and Portugal. U.S. employers are reporting their the strongest first-quarter hiring plans since 2007.
- Wage Growth Expected to Outpace Productivity With both the number and rate of job openings at or near record highs, the relatively tight U.S. labor market will continue to drive up wages and benefit costs. Sixty-seven percent of manufacturers expect compensation costs to increase an average 3.3 percent in 2018, while 64 percent of service sector employers expect compensation costs to increase an average 4.4 percent. Wage growth in 2018 is expected to once again outpace inflation and productivity, putting additional strain on labor costs.
- Debt Ceiling and Interest Rates Pose Challenges Congress will likely raise the federal debt limit before the end of March after some posturing and brinkmanship, and the Federal Reserve is expected to increase interest rates three times in 2018 to 2.1 percent, which will create some headwind for the economy. However, consumer spending, driven by continuing compensation and employment gains, is expected to support the economy next year despite higher consumer interest rates. Sixty-nine percent of manufacturers are expecting an average increase of 7.8 percent in their company’s revenues, while just 4 percent are predicting an average decrease of 7.2 percent. Almost 60 percent of nonmanufacturing companies are expecting an average 11.1 percent increase in their company’s revenues, while just 5.7 percent are predicting an average decrease of 10 percent.
