The Benefits of the Great Reallocation
Welcome back to the Recruitonomics Newsletter! This week, we’re looking at the “Great Reallocation” in the United States – the country’s massive labor market transformation that has taken place since the pandemic. What does it mean for productivity??
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This Week on Recruitonomics:
The Great Reallocation: Can Worker Churn Explain the Productivity Burst???
Back in 2020, the United States labor market was turned upside down by the COVID-19 pandemic. Overnight, millions of workers found themselves unemployed with very few employment opportunities. Over in Europe, governments depended more on furlough schemes, keeping workers “on the sidelines,” so to speak, until the worst of the pandemic was over. While this seemed like a kinder fate at the time, the United States’ path led to an incredible amount of worker churn, which in fact may have transformed the productivity potential in the country. During the recovery, workers quickly shifted away from hospitality and retail, two sectors heavily impacted by the lockdowns, and onto higher paying opportunities now open to them as demand in white-collar sectors soared. That worker churn may have actually led to the current productivity boom in the United States. When moving to a new job, individual productivity typically follows a pattern of initial decline followed by an eventual increase due to the learning curve. Productivity growth across the United States followed a similar pattern, with productivity plunging throughout 2021 and 2022 and now accelerating again.?
Read the full article here.
What does this mean for recruiters??
Though the post-pandemic recruitment process was a difficult one, filled with tense competition and few of the right candidates, the reallocation process that recruiters helped facilitate during this time created a more productive (and likely happier) workforce over two years later.?
Recruiting Tips:?
Recently, we posted a blog that outlined five ways to attract diverse talent. But attracting that talent is only half the battle. Retaining that talent is equally, if not more, important, and can be even more difficult. Building a culture of belonging where diverse employees feel valued and included is crucial for long-term retention. Here, we’ll explore best practices for creating an inclusive environment that ensures diverse talent not only stays but thrives. In our latest blog, Kendra Williams breaks down five approaches to create a culture of belonging and support diverse candidates, who may face unique challenges and barriers in the workplace.?
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Texas is expanding rapidly. Its economy has been growing at a rate of more than 5% in recent years, which are growth rates akin to an emerging market. The state has also contributed to more than 20% of U.S. economic growth in the past two years even as it’s accounting for less than 10% U.S. GDP. The state’s economy is fueled by several factors, including access to cheap energy sources and the domestic manufacturing boom, which has been favoring the South. Friendshoring to Mexico is also playing a role. It has led to a construction boom and employment surge in the transportation and warehousing sector as global supply chains are being recalibrated due to the geopolitical tensions with China. But it’s not just the more traditional sectors that are growing; Texas is now also experiencing the fastest expansion in renewable energies. Additionally, Austin has become a hub for tech companies, many of which have relocated from California. The state is having quite the moment, and it seems built to last for years to come.?
Read the full article here.
What Recruitonomics is Reading:
The most recent Consumer Price Index report showed that headline inflation fell below 3% for the first time since March 2021. Inflation rose 0.2 percentage points from June to July, with prices up 2.9% from July of 2023. The majority of the monthly increase can be attributed to an increase in the shelter index, showing that housing is now the primary driver of inflation. This report was encouraging, especially considering the Federal Reserve’s upcoming interest rate decision in September. Given the weaker jobs report this month and the heightened fears of recession, this report should give the Fed the confidence it needs to begin cutting – the question may now be by how much.?
More Data & Insights:
Thank you for reading! Stay tuned for next week's Recruitonomics Newsletter and check out Recruitonomics.com for more data-driven insights.