With Low Utah Unemployment Rates, What's the Outlook on Utah Jobs?
Good news! Utah’s unemployment rate continues to stay well below the national average. It hit a five year low in January at 3.9 percent and has leveled at that number for the first quarter of 2014.
Business is booming in Utah. According to the Daily Herald, “Utahns’ confidence in current business conditions has reached a new all-time high with 43 percent of Utahns expressing that current business conditions are good.” A good portion of Utahns think business conditions will only improve through the rest of the year.
Not only that, but Utah continues to generate positive job growth. The current growth rate of 2.8 percent is well above the 1.7 national average.
Unemployment Upsides and Downsides
The upside to the low unemployment rate is that not only do people have jobs, but job seekers have job options.
The downside? More and more businesses are coming up short in terms of being able to hire the right people.
In other words, there are not enough employees to go around.
The National Trend
Nationwide we’re seeing this trend.
For example, Businessweek reports that Sabre Commercial, a Texas-based builder has boosted pay and benefits to attract quality employees. “It is an employee’s market,” says John Cyrier, company co-founder. “We are definitely seeing a labor shortage… I see it only getting worse.”
Ti Martin a New Orleans (4.2 percent unemployment) restaurateur says his business is “getting killed on overtime.” His employees are being forced to double up on shifts and job duties and work additional hours.
In the same Businessweek article Mark Zandi of Moody’s states, “There are spot labor shortages that probably will broaden out over the next year as the job market steadily improves.”
CHECK OUT THE ENTIRE BUSINESS WEEK ARTICLE HERE: National Unemployment Dropping
All of this will increase competition for workers among businesses, prompting companies to raise wages, increase hours, pay more overtime, add benefits, and even turn to outside markets to recruit new workers.
This is happening among all job sectors. The light industrial and skilled manufacturing trades that YES holds a strong interest in are no exception.
Zandi believes that employee salaries will likely increase 2.2 percent next year, and then we’ll see another 2.5 percent increase in 2016.
What Does Low Unemployment Mean for Utah?
Reed Laws, President of the Utah staffing agency Your Employment Solutions says, “Low unemployment for the state of Utah equals healthy business. Low unemployment also brings its challenges. We are experiencing more work than labor which swings the pendulum in favor of those seeking work.”
Only a year ago supply and demand came down in favor of the employer when unemployment rates were high. Now the advantage has shifted to the jobseeker. Employers are going to have to compete head-to-head with each other to attract quality employees. More importantly, they're going to have to go above and beyond to keep the employees they already have.
Low unemployment in Utah is certainly good news overall. But it can also drive up the cost of business. For example, companies may have to pay more on advertising costs (to attract new employees) in addition to labor. They won't see the same bang for buck either. This can drive down profit margins and sometimes even limit a business' growth. Or these raised costs can filter through the economy.
How Do Businesses Meet the Challenge of Low Unemployment?
When there aren't a lot of people to go around, how do Utah businesses find the right people for the job? There's no easy answer.
“Utah has such an eclectic group of business,” Laws says. “I don't believe there is any magic dust that will fix the difficulty of recruiting. Your Employment Solutions' approach is simple. In this type of climate our reaction is to hire quickly to fulfill our customer's needs.
It's important to stay within our bounds and continue making good long-term hiring decisions. Maintaining a good work environment and hiring to complement that environment is important.”
We can boil it all down to this…
“Basically, we're all just going to have to work harder,” says Laws.
And you know what?
I have yet to meet a single successful person who has ever regretted doing hard work.
Cheers to Utah Employment!
Your Employment Solutions
“I help connect Utah jobseekers to Utah jobs.”
P.S. Be sure to visit our Utah job board!