The Wall Street Journal just published a long, amazing look at what might be the tightest labor market in living memory. Here’s an excerpt:
U.S. companies are downsizing the hiring process.
Beauty product retailer The Body Shop is dropping educational requirements and background checks for job applicants. United Parcel Service Inc. is making some job offers in as little as 10 minutes. CVS Health Inc. no longer requires college graduates to submit their grades.
In a labor market where job openings outnumber applicants, companies are brainstorming how to get more candidates in the door and to the floor. The hiring overhaul signals a potentially broad rethink of job qualifications, a change that could help millions of people enter jobs previously out of reach, according to economists and workforce experts.
Employers added 531,000 jobs in October and the unemployment rate fell to 4.6% from 4.8%, the Labor Department reported Friday, indicating that companies are filling openings at a faster clip than in recent months.
New data from labor-market analytics firm EMSI Burning Glass and the Conference Board, a private research group, suggest that 1.4 million jobs will open to people without college degrees in the next five years if employers continue to lower educational requirements at the current rate. In January 2019, 42% of employment ads for insurance sales agents called for a bachelor’s degree, the data show. In September 2021, 26% did.
Loosening requirements opens opportunities to some of the nearly two-thirds of American adults who don’t have bachelor’s degrees but may have the skills or aptitude to perform many well-paying jobs.
The shift may already be narrowing the gap in unemployment rates between college graduates and those without degrees. In October, the jobless rate for workers with only a high-school diploma fell to 5.4% from 5.8% in September, according to the Labor Department. The rate for college graduates dropped to 2.4% in October from 2.5% a month earlier.
Companies absorbing workers with little experience may have to spend more time on training. And some of the newly hired may find they don’t like the work. Yet in the tight labor market, businesses already struggling with employee turnover may have little choice.
In retail and fast-food industries, keeping employees for even 90 days is difficult, human-resources executives said, one reason some companies offer bonuses to workers who stay on the job that long.
At shipping giant UPS, human-resources executives realized months ago that the company would need to streamline hiring practices if it hoped to bring on 100,000 seasonal workers for the holidays. After study, UPS eliminated job-application questions and hiring steps unless they were required for payroll purposes and government audits, said Matt Lavery, the company’s global director of sourcing and recruiting.
To broaden the applicant pool, the company eliminated extended questions about an applicant’s employment history for the seasonal jobs. Human resources executives tallied the number of trips job seekers made to company buildings before landing an offer, seeking another way to lower hiring hurdles.
A two-week hiring process for seasonal UPS workers now takes less than 30 minutes, in certain cases. For some jobs, such as driver helper, there is no interview at all. Applicants answer online questions and can get a conditional job offer in as little as 10 minutes.
Successful applicants hear from a UPS employee after they pass the online screening. Then they are welcomed to UPS and told where to report for work.
“In the market that we’re in, if you don’t make a job offer to someone somewhat quickly, someone else will,” Mr. Lavery said.
All this panic-hiring is causing wages to spike:
Which tells us all we really need to know about the box the Fed is in. A labor market this hot, in any previous year, would have guaranteed dramatically tighter monetary and fiscal policy — that is, higher interest rates and tax increases — to rein in a clearly unstable economy.
But today, fear of a debt-driven deflationary crash has the Fed keeping interest rates at historically low levels while Congress appropriates trillions more in various kinds of social spending.
Hey, desperate times require desperate measures.