JUNE JOBS—THE GOOD AND THE CONCERNS We are seeing some good numbers from the June jobs reports, but there is some bad mixed in there too. On the positive side, 288,000 jobs were added in June. This reduces the national unemployment rate to 6.1%. Looking just at those numbers, we can take heart. The rate is moving closer to a 5% range, the range most economists consider very normal for a healthy economy. A deeper look at exactly what is happening however reveals some matters of concern. For example, Kevin G. Hall cites a serious red flag concerning the nature of the jobs involved (“June’s Surge in Jobs Hailed” The Kansas City Star, July 4, 2014, pp. A1, A8): “The number of full-time workers dropped 523,000 in June, the first such decline since October, and the number of part-time workers rose by 799,000, which was the largest one-month gain since January 1994.” (p. A8) Economists have various opinions as to the root causes behind these trends. One possibility is that companies are simply choosing to convert fulltime positions into part-time positions to lower costs of employment such as healthcare and other benefits. Although this is wonderful for those workers who want part-time work, it can be devastating for workers and their families who depend on the traditional fulltime gig with well-subsidized benefits. Simultaneously, precisely because of growing healthcare costs, workers are finding that the playing field is leveling between regular fulltime employment versus contract or freelance work. Increasing numbers of companies will find that they simply cannot afford what the healthcare juggernaut will impose upon them. Therefore, whether you are fortunate enough to be in a regular fulltime job with benefits or not, your cost structure will look the same. Regardless of whether the company is passing more of those costs onto you or you are paying them out-of-pocket as an independent contractor, the cash flow will be the same. Serious implications arise from these trends: For Companies—These trends will increasingly demand that talent management is handled with much wisdom. It will be essential to satisfy the corporate bottom line while simultaneously addressing the serious demands of how to attract and retain the best talent. The companies that do best in the coming years will be those that can manage the profit margins while not shortchanging the value they attach to their talent pool. For Workers—These trends will increasingly demand a very astute and constant focus on career management. The need to reinvent will be ever present because circumstances might change at any moment. The workers who will do best will be those who embrace and thrive on change, even to the point of transitioning from traditional fulltime gigs to becoming independent contractors. Those who abhor change will struggle the most. The economy, increasing healthcare costs, and policies in flux will continue to create turbulence. Both employers and employees must absolutely monitor these factors closely, and be ready to respond as soon as conditions necessitate a change. [Today’s post— Blog.reliableinsights.]
Posted on: Mon, 07 Jul 2014 12:23:34 +0000
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