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Economic Growth Spurs Positive Hiring Forecasts
Posted Thursday, July 6th, 2017 by
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Every month the Department of Labor releases their unemployment statistics for the previous month. For the last eight years since the Great Recession, the employment level has seen a tremendous amount of growth (compared to the dark days of 2007 to 2009 when the unemployment rate was at 10%.) Today, the unemployment figure is at 4.3%, with this rate predicted to hold steady or drop slightly by the end of the year. The International Monetary Fund just adjusted their economic growth forecast for 2017 and 2018 down to 2.1%. While this is a higher growth amount than 2016 (1.6%), the group lowered their forecast for growth due to the uncertainties surrounding the current administration’s economic boosting plans. The economic growth, which has been growing in the last eight years, has helped expand the job market and allow companies to hire more people.
Growing Economy Equals Job Creation
According to a CareerBuilder survey from earlier in 2017, 45% of U.S. employers plan to hire full-time, permanent employees in Q2 2017, which is up over 10% from the previous year. Nearly half of employers (49%) plan on hiring temporary or contract workers in the same quarter up 12% from 2016. The hiring increase is also reflected in a projected growth in the hiring of new college graduates, especially those with degrees in business, engineering and computer/information sciences. The National Association of Colleges and Employers (NACE) forecasts that employers will hire 5.8% more new college graduates from the Class of 2017 over the hiring of the Class of 2016.
All of these forecasts parallel government employment forecasts. Each decade, the Bureau of Labor Statistics (BLS) publishes an outlook for U.S. employment. The Balance that total employment to increase by 20.5 million jobs from 2010 to 2020. A majority of all occupations will experience growth, but the fastest growing careers will be in healthcare, personal care, social assistance, technology and construction.
Economic Forecasting Meets Real Life
Sterling Talent Solutions recently surveyed 500+ US-based employers in 33 industries about their use of background screening to gain key insights into emerging trends, technology and more. The 2017 Background Screening Trends & Best Practices Report uncovers details how HR professionals think about components of the hiring process and how they relate to the background screening industry, how emerging technology is impacting the candidate experience and emerging trends in employment background screening.
To get a general idea about the hiring outlook of our survey participants, we asked if they would see an increase in hiring for 2017. The majority (60%) of those that replied said that they expect hiring to increase in 2017.
We then wanted to find out what was driving the hiring forecast for each of the responses. Those that are expecting their hiring to increase said they see new business growth, turnover of current employees, increased need for specialized employees and backfilling positions from retirees as the main reason for job growth. For those companies that are expecting hiring to decrease they claim lower revenues than expected, low employee turnover and political concerns. Lastly, the companies that expect hiring to be flat for 2017 stated they were not able to offer competitive pay rates in a highly competitive field, budget decreases or they had specific industry concerns such as funding or procedural challenges.
Compared to Sterling Talent Solutions’ 2015 Background Screening Practices & Trends Report, which stated that 69% of organizations expected hiring to increase, the projected hiring forecast did decrease by 9%. Based on the feedback, we believe that lower revenues than expected and the uncertainties in the current political climate have caused some organizations to take a more conservative approach when it comes to hiring. Some companies are having a hard time finding qualified workers to fill their ranks, especially in technology-based fields, construction and the healthcare industry. In a candidate- driven job market, job seekers are being more selective of the companies they choose to work for based on benefits and job satisfaction that is being offered.
Hiring Forecast and Background Screening
Increased hiring will bring a larger need for transparent hiring processes from recruiting through background screening to onboarding and first-day activities. The premise behind our 2017 Background Screening Trends & Best Practices Report was to take the pulse of how companies are using background screening as part of their hiring process. A majority of survey respondents (89%) do currently conduct employment background checks while 11% do not perform these checks. Companies who have not implemented an employee screening program yet should take an in-depth look at their business’ needs and determine the value they would receive from implementing an employment background screening program. From identifying the best candidates to maintaining compliance, it’s good to get a plan in place to understand the reasons screening matters to your organization.
From employment verifications to drug screening to professional license confirmation, employers require different checks for different reasons.
For those companies who are part of the 89% who currently conduct background screening, the top four reasons for performing these checks are:
- To protect clients and customers
- To enhance workplace safety
- To identify the best candidates
- It is mandated by law
According to our survey, approximately 80% of the respondents said that background checks uncover issues/information that wouldn’t’ have been found otherwise. Therefore, overall employers are finding employment checks worth their time. As the demand for more information about candidates continues to rise, employers are finding strong value in the content of the results they receive.
For more insights on the connection between increased hiring and the need for an employee background screening policy as well as a more in-depth look at trends affecting the background screening industry, download Sterling’s Background Screening Trends and Best Practices Report 2017.
This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.