As the US economy and labor market gradually recover following the significant impact of the COVID-19 pandemic, organizations are looking for new ways to attract and retain employees. At the same time, employees are rethinking their career goals and skill sets, with many considering career transitions. In fact, recent data from Monster found that 95% of US workers are considering changing jobs in 2021.
We recently surveyed both HR professionals (employers) and individual employees for their point of view on workforce recovery. Specifically, our quarterly ‘Career Mobility Outlook’ report covers employer and employee perspectives on key aspects of the workforce such as economic sentiment, recruitment trends and job transition behavior. Below, we’ll highlight key findings and takeaways from the latest survey, which was completed during the second quarter, and analyze how key trends have changed since the first quarter.
employers and employees have a more positive outlook on economic recovery
At the height of the pandemic in April 2020, the US unemployment rate spiked at 14.8%. It has since dropped to 5.4% but has yet to reach the pre-pandemic level of 3.5%. As the labor market bounces back, our survey found that both employers and employees are now more optimistic about the trajectory of the US economy than they were in early 2021. The survey found that nearly 60% of employers (versus 50% in Q1) are optimistic about the trajectory of the US economy over the next three months, while 39% of employees (versus 23% in Q1) shared the same sentiment. Additionally, 69% of employers (versus 29% in Q1) have a positive outlook on their sector, while 56% of employees (versus 48% in Q1) say the same.
The positive economic outlook among employers closely aligns with current labor market trends, in which more jobs were added to the US economy in July than at any point in the past year, resulting in the unemployment rate falling to its lowest level since the start of the COVID-19 pandemic. In conjunction with the latest Randstad RiseSmart Labor Market Barometer figure of 106.6, which improved by 0.8 points compared to last month, this signals that the labor market recovery is trending in a positive direction.
The Labor Market Barometer aggregates ten key labor market indicators using statistical computations into a single, monthly figure, representing the pulse of the US labor market. For perspective, the barometer has a baseline figure of 100, marked by the initial pandemic outbreak in March 2020.
hiring and job transitions are on the rise
While many organizations put hiring on hold due to the pandemic’s impact, our survey shows that hiring continues to tick back up. According to the survey, 92% of employers are planning to hire in the next three months – an increase from 87% in Q1. While much of this can be attributed to such factors as organizations adding back roles they eliminated during the pandemic and expanding their overall workforce, companies are also facing supply and demand challenges when it comes to filling open roles. In fact, as of the latest data, the US reported a record 10.1 million job openings in June, up from 9.2 million in May.
In addition to increased hiring, our survey shows that employees are operating with cautious optimism and are more open to exploring their career opportunities than at the beginning of 2021. While the first edition of our ‘Career Mobility Outlook’ report found that employees were hesitant to change jobs, those perspectives shifted in the second quarter, with 42% of employees indicating they are likely to move into different roles within their current company – a 19 percentage point increase over the previous quarter. Additionally, 38% of employees indicated they are likely to move to a new role outside their current organization in the coming months, compared to only 17% of employees reporting the same in the first quarter.
organizations are embracing internal mobility
Given the competitive hiring market, organizations are tapping their current employees to fill open roles internally, rather than relying on outside talent. Our ‘Career Mobility Outlook’ survey found that 87% of employers surveyed believe that at least 10% of open jobs at their organization can be filled through internal mobility in the coming months, an increase over 71% in the first quarter. This aligns with another finding from our recent ‘2021 Guide to Severance & Workforce Transition,’ which shows that 88% of organizations encourage employees to apply to roles internally.
As organizations compete for a shrinking pool of qualified talent, taking a proactive approach to internal mobility can drive significant cost savings. According to data from Josh Bersin, it can cost up to six times as much to hire externally rather than build talent from within an organization – and this number has likely only increased for some industries in which hiring is particularly challenging. Between expenses related to job advertisements, background checks, assessments, onboarding and training, new hire costs can add up quickly.
By hiring from within, your organization can avoid many new hire-related costs and reduce the time that would have otherwise been spent reviewing countless resumes and scheduling several rounds of interviews. If an employee has shown success in one role at your organization, they’ll already understand your culture and company vision, which will help make the transition to a new role smoother and faster.
Other benefits of internal mobility include higher retention and increased employee engagement. In fact, a recent study from Prudential Financial found that of employees considering leaving their jobs post-pandemic, 72% are rethinking their skill sets. Additionally, among employees planning to look for a new job in 2021, having ‘mobility opportunities’ is a top factor that would encourage them to stay. Internal mobility opportunities can empower employees to identify untapped skills and expand their skill sets, which can ultimately boost engagement and retention, while helping your business drive workforce agility.
managers appear more willing to share talent internally
In addition to increased internal mobility opportunities at an organizational level, our ‘Career Mobility Outlook’ survey shows that managers may be more willing to share talent across the organization. According to the survey, 61% of employees (versus 51% in Q1) have a positive outlook on their current manager’s openness to internal mobility opportunities. On the employer side, 81% of HR professionals (versus 73% in Q1) believe that current managers at their organization are open to internal mobility.
A key barrier that prevents some organizations from making their internally mobility initiatives fully effective is that managers often want to keep the best talent on their own team. According to the 2019 Deloitte Human Capital Trends Survey, 46% of HR leaders indicate managers’ resistance to internal moves as a top internal mobility roadblock. This approach prevents employees from expanding their capabilities and fully reaching their potential and can hold an organization back from building a sustainable workforce.
To enable true internal mobility, it’s important to encourage talent sharing across all levels and departments at an organization. This includes setting expectations with managers that their teams are impermanent, helping them recognize the value of making talent visible and mobile throughout the organization and being as transparent as possible when it comes to sharing internal mobility opportunities with employees.
While a manager might prefer to hold on to top performers for their own team, rather than encouraging them to take on opportunities across the organization, talent sharing not only helps employees but also enables managers to access talent with relevant skills they might not have otherwise known were available. This approach to internal mobility is in everyone’s best interest – it helps ensure employees’ skills and passions align with larger business goals, while simultaneously supporting individuals’ long-term employability.
employers turn to career development and skilling to support internal mobility
To drive adoption and success with your internal mobility initiatives, it isn’t enough to simply share a list of available internal job opportunities and projects with employees. Rather, it’s important to help employees continuously develop their skills to meet changing business needs.
According to our ‘Career Mobility Outlook’ report, organizations are focused on prioritizing career development initiatives and adopting proactive employee retention strategies. The survey found that 76% of employers confirm they currently offer skilling and career development opportunities to their employees, with 60% of employees having a positive perception of the opportunities offered at their current organizations. This does, however, point to a disconnect between employers and employees, presenting an opportunity for organizations to ensure all individuals have access to and are aware of the career development and skilling opportunities available.
Our recent ‘Skilling Today’ global report found that while organizations see the value in reskilling and upskilling talent, with 72% making skilling opportunities continuously available for career development, 39% offered skilling and training opportunities to some, but not all, employees. If all employees are offered equal access to skilling and career development opportunities, this can drive increased engagement and retention, which is more important now than ever, given the ‘Great Resignation.’ In fact, the Randstad Sourceright 2021 Talent Trends report found that 87% of human capital and C-suite leaders believe reskilling their employees will help drive retention.
To make your skilling initiatives as effective as possible, employees need much more than a list of available skilling courses and experiential learning opportunities to choose from. Rather, employees can benefit from a combination of job market insights and personalized career coaching to ensure they’re focusing on the right skills and roles that are in demand now and will be in the future. At RiseSmart, we recently launched BrightFit, the first-of-its-kind predictive career exploration technology, which points individuals to opportunities that have a strong market outlook and roles that best match their skill sets.
Employees transitioning to new roles both internally and outside the organization are also matched with career coaches, who help individuals expand their perspectives about their career options and focus on the optimal career and skilling choices. We call this combination of data-driven insights and coaching ‘career intelligence’ and such an approach to skilling and career development can support both individuals’ long-term employability and help future-proof your workforce.
The global pandemic has contributed to significant workforce transformation, leading organizations to rethink how they do business and individuals to rethink their career goals. As the economy and labor market continue to improve, our quarterly ‘Career Mobility Outlook’ report will continue to highlight where employers and employees are aligned on crucial workplace topics, as well as noticeable disconnects and key trends along the way. Additionally, the Randstad RiseSmart Labor Market Barometer and accompanying report will be updated on a monthly basis to provide a unique look into the road to recovery.