Although slower than the pace of last winter, recent employment gains have been just about right.
On a percentage basis, employment growth is about equal to population growth. Unemployment is 4.7%, which is about normal, representing necessary turnover of people from one position to another. If we were growing jobs at a faster pace, the Fed would feel the need to tighten. If growing at a slower pace, we’d be underperforming. Welcome back, Goldilocks.
Business Strategy Implications: Make sure you have fully abandoned the old, recession-era thinking about employees (i.e., that they are easy to keep and easy to replace). The labor market is fairly tight, so reducing labor turnover is very important. I’ve written about it, and I’ve compiled resources for how to deal with it. One element that I have not previously emphasized is hiring right. One way to reduce employee turnover is to make sure you hire the right person in the first place. Take the time you need, check references, and think about my experience: In every case where an employee has not worked out, the employee’s problem was identified at the interview stage, but the hiring manager (sometimes me) thought it was a manageable problem. As I gain experience, my standards are rising.