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Smaller pool of qualified job candidates since recession

October 5, 2017

A Tightening Oregon Job Market

By Anthony K. Smith

National Federation of Independent Business

As Oregon’s economy continues to grow, the many measurable benefits of expansion are evident. State economists at the Oregon Office of Economic Analysis have recently reported a number of encouraging statistics: job creation continues to outpace population growth, median incomes are rising, and the overall labor force participation rate in our state is approaching full employment – at least in the way that economist define that term based on changing population demographics.
Economic growth, however, is not without its challenges for small businesses. As state economists have noted, there are currently only about two Oregonians in need of a job for every job opening. At the height of the Great Recession, when there was a surplus of available labor, there were nearly 13 Oregonians out of work for every open job.

For small businesses looking to fill those available positions, this creates a challenge. The pool of qualified applicants for each job is statistically smaller today than it has been in years. This phenomenon is not unique to Oregon – small businesses across the country are telling us the same thing.

New research put out by the National Federation of Independent Business in its recent National Small Business Poll on Job Openings confirms many of the same findings of our state economists, as well as the anecdotal evidence we see here in Oregon – “Help Wanted” signs and billboards, advertisements online and in local newspapers, etc.

Nationally, one-quarter of small employers have an open position they are currently trying to fill and for those that aren’t currently hiring, a majority report having a job vacancy within the last 12 months, 48 percent within the last six months.

Of those open or recently filled positions, 56 percent were full-time jobs, 44 percent part-time, with the overwhelming majority of those jobs (71 percent) being permanent jobs, not merely seasonal openings or limited-duration opportunities.

Adding even more pressure to an already difficult challenge, about one-quarter of small businesses found the lack of job-specific or occupational skills a typical problem among applicants, and it was an occasional problem for 40 percent. A lack of social skills was a typical applicant problem for 14 percent, and an occasional problem for 45 percent.

Other notable reasons that applicants were disqualified in the hiring process were a lack of relevant work experience, a poor attitude, an inappropriate appearance, unreasonable wage expectations, insufficient English, math or communications competencies, and failed drug screenings.

Back here in Oregon, state economists have cited a troubling increase in the number of working-age Oregonians, both men and women, who are no longer looking for work because they report being disabled or too sick to work. A definitive explanation for this is not yet apparent, but clearly impacts the pool of potential job applicants.

So long as current trends persist, small businesses have only a few realistic options: they can increase the wages they typically pay for the jobs they need to fill, hold jobs open longer in an attempt to find an applicant well suited for the position, or hire applicants that might not be the perfect fit with the knowledge that additional on-the-job training will be necessary before an adequate level of productivity can be expected.

Any of these choices will present challenges for small businesses, each with their own associated costs, but for workers and those looking to return to work, opportunity is knocking. Job-seekers can make the case for employers to offer higher wages and better benefits, they have a better chance at moving up on their career paths, and they can expect to find more employers willing to invest in their development.

When the economy grows – and that growth is sustained — finding solutions that work at the individual business level to issues like a tightening labor market aren’t nearly as foreboding as when the economy is struggling. And ironically enough, the ways that businesses adapt naturally to changing market conditions can be a “win-win” for business and labor in the form higher wages and better benefits for workers, and increased productivity and profitability for employers – all without the negative effects or unintended consequences of controversial and politically divisive government actions.

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Discuss this article

Larry Sparks October 8, 2017

I would like the State economist, outside economist and state burocrats to analyze the number of people on welfare and unemployment to the number of available jobs. There will probably be a correlation.

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