Employment Article: ‘Americans Cling to Jobs . . .’

At Top Echelon Network, we encourage our Preferred Member recruiters to send us articles of interest to share with the rest of the Membership, articles that affect what recruiters do on a daily basis.

Bruce Widnes of The Recruiting Group, Inc. sent us just such an article recently.  That article is “Americans Cling to Jobs as U.S. Workforce Dynamism Fades” by Rich Miller.

Click here to read the article in its entirety on the Bloomberg website.  Below are passages taken from the article that are especially relevant for recruiters and their dealings with candidates.

Passage #1:

Spooked by the severity of the recession and stuck with underwater home mortgages, Americans are less inclined to leave their jobs and less willing to strike out on their own to build businesses, government data show.  Even with swelling profits, companies are holding back on hiring, complaining that they can’t find skilled workers for positions they do have open.

As a result, the labor market is losing some of the dynamism for which it’s long been known.  And the trend predates the recession: an aging population and the growth of two-income households have reduced Americans’ mobility to about half of what it once was, while technological gains and globalization have led to a loss of middle-income jobs.  The economic slump only exacerbated the loss of vigor.

Passage #2:

In the past, such geographic disparities would have been ironed out as Americans flocked to where the jobs were.  Labor mobility has long been a major source of strength for the U.S. jobs market when compared with Europe.

That is less the case today.  About one in 10 Americans currently move each year, according to James Manyika, director of the McKinsey Global Institute, the research unit of consultants McKinsey & Co.  That’s well below the roughly one in five average that prevailed from 1945 through about 1990, he said.

The percentage of Americans who changed residences between 2010 and 2011 fell to a record low of 11.6 percent, from 12.5 percent the previous year, according to Census Bureau figures.  That compares with 17 percent in the recession of 1990-’91.

The rise of the dual-income family is one reason, he said: when both partners are working, it’s harder to coordinate a move.  More recently, the collapse in housing prices has played a role in damping mobility, he added, although [Steven Davis, professor at the University of Chicago Booth School of Business], said that research suggests the impact of that is small.  More than 11 million households owed more on their mortgages than their homes were worth in the fourth quarter of last year, according to data provider CoreLogic, and would face losses if they opted to sell to move elsewhere for work.

While Americans are more willing to leave their jobs for other opportunities than they were at the depth of the recession, they still have a way to go before they regain the confidence they exhibited prior to the downturn.

The so-called quit ratio—which measures the number of people voluntarily leaving their jobs as a proportion of total employment—stood at 1.6 percent in March. That’s up from a low of 1.2 percent almost three years ago, yet still well below the 2.3 percent peak seen in late 2006.

“We just haven’t had people changing jobs enough,” said Betsey Stevenson, an assistant professor at the University of Pennsylvania’s Wharton School in Philadelphia and a former chief economist at the Labor Department.  “We need to see people have the confidence to quit their job and find a better one and create an opening for someone else.”

The jobs recovery hasn’t been strong enough to convince many Americans to re-enter the labor force and start looking for work again.  The labor participation rate—the share of working-age people holding a job or seeking one—stood at 63.8 percent in May, just above a three-decade low of 63.6 percent the previous month.

What are YOUR thoughts about this article?  Does it accurately reflect what you’re currently seeing on your desk?  If not, why not?

Do you have an article of interest that you believe would be beneficial for the rest of the Network Membership?  Send it to marketing@topechelon.com, and we’ll include it in a future issue of The Pinnacle Newsletter Blog.