The Postrecession Labor Market
Unemployment hovers at the double-digit mark. Yet businesses that rely on top talent can't afford to be complacent about hiring. So what will it take to build an A-team of players as the economy begins to recover? We asked Michael Metzger — CEO of PayScale, which operates the world's largest database (23 million entries) of salary information — to weigh in. He recently spoke with Inc. editor-at-large Leigh Buchanan.
What effect will this extended period of high unemployment have on the kinds of jobs employees deem most desirable and how they negotiate compensation?
I look at two sets of people: those who have jobs today and those who don't. For those who do, I think you'll see a greater emphasis on stability. They won't necessarily be looking for industries that are going to pop, but they will want to see growth and trusted management teams. To the extent there are such things, they will want sectors that are recession-proof.
Then there's this whole bucket of people who aren't working. They are just trying to get a job as close as possible to the last wage they were making. They may do some light negotiating. But at the end of the day, I think if they have a job offer that's 10 percent below where they were, they are going to take it.
Will employers be able to offer lower pay for the foreseeable future?
We've looked at what's been happening to payroll since the recession started, and overall, we haven't seen a huge drop in pay. Maybe a percentage or two over the last year. For example, we looked at project managers in construction, which is a very hard-hit sector. We thought their pay would be heavily down — but there's no change. The number of those jobs available may be down. But when construction companies need a project manager, they're not trying to save by low-balling people. They're still looking for the best person possible.
So this isn't a great time to pick up good people cheaply?
Two things influence the decision to low-ball. What is the market? And what are the values of your company? There are companies and sectors where it's very much a nickel-and-dime proposition. They understand and live with high turnover rates, and, when things pick up, they just have to replace workers. On the other end of the spectrum are companies that look for loyalty and continuity. And, ultimately, loyalty and commitment depend on how employees feel about their compensation level relative to what is going on in the market.
What qualities or qualifications of job applicants will grow in importance over the next five years?
Companies will continue to want people who are fluent in current technology that is used in business. The language of tech is increasingly the language of work. And that's not just true in offices and laboratories. Thirty years ago, being an auto mechanic was about wrenches and oil and torque. Now it's about computer diagnostics. Think about factory workers: Instead of doing the welding and the painting, many are programming and repairing robots that are doing the welding and the painting.
In some of the softer areas, companies are looking for people who take on more ownership and initiative. And the ability to collaborate in teams and be comfortable in fluid environments continues to be high on employers' lists.
What new job titles do you expect to see in the next five years?
A big thing driving the evolution of jobs and job titles is sales and marketing via smartphones and ultra-portable devices. We're seeing more titles related to the Internet and marketing, like SEO marketer. And there will be a whole set of green-sector jobs that reflect the intersection of technology and function, such as fuel cell product manager. Thirty years ago, there were probably a few dozen wind turbine technicians in the country. Now there are tens of thousands.