As offices prepare to welcome the first generation of true ‘digital natives’ there are more currents below the surface shaping the future of HR.

With unemployment at a 49 year low in the US, salary budgets are projected to increase by an average of 3.2 percent, up from 3.1 percent last year. Employers are feeling the growing labor shortage, which saw 6.9 million unfilled jobs last year, a number that is predicted to grow in 2019, with the most affected industries being education/health services and professional/business services.

All this as the first majority Gen Z university class dons their caps and gowns this Spring, and prepares to enter the workforce. According to recent LinkedIn research, the fastest growing fields of entry for these grads are web designer (for women) and Software tester (for men). However, it isn’t just fresh face employees making their mark on the workforce, some 10 thousand baby boomers turn 65 every day, and as a result, half of the 11.4 million jobs projected to be created over the next seven years will be filled by people over the age of 55.  

As the face of the labor market changes, so does the infrastructure that supports it. In the last five years, HR technology has seen a proliferation of startups, big consolidations, and a race for innovation. At the same time, new legislation, like the General Data Protection Regulations in Europe, brings data security to the forefront; and workers movements like #metoo, educator strikes, and Uber protests raise questions about what the future of work should look like.

In the midst of all this recruiters and HR are working harder than ever. A recent Monster survey found 62 percent of recruiters say their jobs are more difficult than the previous year, and 67 percent say the difficulty exceeds that of five years ago. So, let’s break down these changes step by step to understand the trends taking root in the latter half of 2019.

1. The Beginning of Gen Z Takeover

Every employer has now taken into the fold, the once enigmatic, millennial cohort. In fact, the generation born between 1981 and 1996, is the biggest portion of the labor force today. Yet, time marches on, and employers must now welcome a new crop to the workforce… with their own special quirks.

Gen Z, the first generation of true ‘digital natives’ (those born between 1997 and 2016) are expected to represent at least 40 percent of all consumers by the year 2020, potentially influencing $166 – $333 billion of annual family spending.

Some of the defining characteristics of Gen Z include: entrepreneurial, less money-driven, and honesty seeking. Read the full list here!

2. Remote Work Is the New Norm

More and more employees are enjoying remote work with increased productivity. As a matter of fact, an almost two year Stanford study revealed a remarkable boost in productivity among telecommuters in a test group that is equivalent to full day work.

The report found that remote employees tend to put in a full day of work and even more since they don’t have to struggle with a daily commute only to leave earlier for personal errands or be late for work.

Furthermore, employee attrition was reduced by about half, saving the test group around $1,900 per employee in yearly retention costs. Not only that, but operating costs were also reduced by at least $1,400 per worker since they were not using company facilities like water and power and taking up office space.

3. Digital and Consumer-Grade HR

Employees, as well as employers, will continue to demand user-friendly workplace tech. This will push HR solutions to be fully cloud-based, mobile-enabled, open to APIs and meticulously designed with the end user in mind. Furthermore, HR tech and data will be accessed and shared with the ability to integrate across various platforms while connecting internal business silos.

Now there are technologies for every step of the employee lifecycle from candidate relationship management, to onboarding, to time/attendance tracking keeping HR and Talent Acquisition engaged with their workers from start to finish.

Says Bob Melk, Chief Commercial Officer, Monster: “For recruiting to be effective in 2018 and beyond, it must go beyond traditional methods. [There’s a] need for an integrated recruitment strategy spanning the entire candidate lifecycle. A multi-solution approach – combining marketing, digital, and analytics – is critical in moving recruitment stress to recruitment success.”

4. Employers Get Competitive About Benefits

This competitive hiring landscape can be particularly challenging for startups and small business without the name recognition of larger companies.

These fledgling businesses will need to get creative with the benefits they offer, such as lifestyle spending accounts, flexible work arrangements, student loan support, and health/wellness programs. Elastic and Salesforce not only offer generous vacation packages, they also pay their employees to volunteer for the causes they are passionate about. Netflix, on the other hand, extends paid parental leave to salaried employees so parents of any gender can take a year off with full pay following the birth or adoption of a child.

5. Delivering Against Diversity And Inclusion Initiatives Continues

With the unemployment rate expected to continue its decline, employers need to expand the talent pool. That means building pipelines for underrepresented and untraditional candidates.

Daniel Zhao, a senior data scientist at Glassdoor, notes changes in the tech sector saying to CBS News “We’ve heard a lot of anecdotal evidence that employers are starting to reduce qualifications or look for nontraditional workers. They might reduce qualifications from a master’s to a bachelor’s degree, or they might start an apprenticeship.”

As we move into 2020 there will be more changes to come! Let us know what you think is on the horizon @smartrecruiters #HiringSuccess.

December saw 600 words added to the Oxford English Dictionary, here are four recruiting terms you should know, but won’t find in the latest annex.

Every quarter the Oxford English Dictionary adds new words to the recorded annals of the language. The latest update in December 2018 codified gems such as: crowd-surfer, Debbie Downer, sausage fest, and 597 other words we don’t know how we ever lived without. And, as impressive as this number is, we lament that many avant-garde recruiting terms still live outside the formal canon.

Maybe it’s the boom of human capital management innovation or the proclivity of talent acquisition (TA) practitioners to be active on social media, but there are scads of creative terms in the recruiting industry that deserve to be shared (at least as much as sausage fest).

Here are four terms we think will make a splash in 2019. We encourage you to add to our list by tagging us on Facebook, LinkedIn, or Twitter.

Degree Inflation

A phenomenon where a university degree is required for jobs that previously did not need one.  A report from Harvard Business school reveals this trend to be prevalent with middle-skill jobs like administrative assistants and production supervisors in the U.S.

Example: 16 percent of current production supervisors graduated from a four-year college, yet 67 percent of the openings for such positions list “bachelor’s degree” as a required skill.

According to researchers, the cause of this trend is two-fold: 1) The fast-changing nature of many middle-skills jobs. 2) Employers misperceptions of the economics of investing in quality talent at the non-graduate level.

The reality is that college graduates are more likely to possess the requisite hard skills, such as mastery of Microsoft suite, than their non-grad peers, while both groups tend to exhibit soft skill deficits such as poor written and verbal communication.

Researchers found that employers gradually began using ‘university degrees’ as a ‘proxy’ for a certain depth of competency, not realizing that the short-term benefit (technology know-how) would be overshadowed by hidden costs – higher salaries and turnover for college graduates in middle-skill positions when compared to their non-grad peers. All while both groups perform similarly in measures such as  “time to reach full productivity”, “time to promote”, “level of productivity”, or amount of oversight required.

Jobs that are associated with middle-class stability and upward mobility (supervisors, support specialists, sales representatives, inspectors and testers, clerks, and secretaries, and administrative assistants) are now out of reach for many Americans, even those with experience, as some automated tools weed them out regardless.

Ghosting

A millennial dating term for ignoring a former paramour until they get the hint has entered the HR lexicon, and no one is in love.

‘Ghosting’, in TA-world, is when a once enthused and reachable candidate becomes incommunicado without warning. This can happen at any stage of hiring, including between signing a contract and the starting day. Some HR folks have even reported that employees have begun ghosting in place of tendering a resignation.

Two important things to keep in mind about ghosting are…

1. 1. Employers/HR/Recruiters are definitely guilty of ghosting candidates. Now that it’s candidates market, applicants have little to no guilt about doing the same.

1. Employee ghosting can be a sign of culture problems or disconnect, so if there is a particular supervisor/department/location in which this happens frequently… it may be worth a look.

Note: ‘Ghost’ as a verb was added to most dictionaries in 2017 in reference to dating. We’re still waiting for an entry about leaving recruiters in the lurch.

Talent Acquisition Suite

As more software solutions enter the world of hiring, HR and IT struggle to maintain a clean flow of data within an organization. Enter the talent acquisition suite (TAS), or the next generation applicant tracking system (ATS). As opposed to legacy ATS, TAS supports deep integration through open APIs. Suites boost efficiency and compliance as recruiters no longer have to feed data through multiple systems.

Rebecca Carr Sr. VP of Success & Sales Engineering at SmartRecruiters shares her predictions for 2019, saying,

“Recruiting software is evolving to meet market demand for end-to-end talent acquisition platforms that help companies drive productivity… The trend towards native sourcing, automated screening, campaigning, and recruitment marketing platforms is on the rise, making it faster and easier for businesses to build and convert their talent pipeline within one system. Otherwise, open APIs that support “deep integrations” with best-of-breed products is needed in order to grow efficiently.”

Learning Quotient

Also known as LQ, learning quotient is a person’s ability and enthusiasm to learn new skills and adapt to new situations. And it’s the latest metric employers are eager to measure in future employees.

The fast-pace of digitization makes certain skills – like cloud computing, UX design, and data science – high-demand, thus dividing the workforce into the haves (those with right competencies) and the have-nots (lacking the right competencies). The latter is left scrambling to find work, while employers struggle to fill their need for the former.

In answer to this conundrum, organizations are ramping up their learning and development programs, and looking to hire candidates who will take advantage of these resources.

Jennifer Carpenter, VP of global TA at Delta Air Lines suggests creating virtual “learning lounges”, where corporate learning materials can be accessed by the public, and recruiters can contact frequent/high-performing users.

E-commerce forces retailers to elbow into the ever-steepening competition for tech talent.

Before the end of 2017 89,000 Americans were laid off from merchandise stores. That’s more people than the coal industry employs in the entire US. If you look to LinkedIn you’ll see that the number of profiles identified as retail associates shrunk from almost 200,000 in 2013 to just under 116,000 in 2017, and you may be able to guess why. It’s e-commerce: The wonderful world of shopping at home, watching Netflix in your pajamas.

Cyber retail holds great appeal for the busy, the lazy, and the deal-seeker alike, but contrary to the perception of online anonymous automation, online shopping is not an inhuman experience, you just don’t see them. In fact, the Amazons of the world are only made possible by oodles of people working behind the scenes, to make sure when you press order, it actually arrives on your doorstep. So it only makes sense that this dip in sales associates means a push for another type of talent: software engineers.

That’s right, the retail industry is now seeking invisible architects to construct your retail experience. So don’t forget, from homepage to confirmation email, the e-shopping experience is still human assisted, only you don’t have to be intimidated by a super chic sales clerk.

However, IRL associates (cool or not) haven’t disappeared entirely – though 2017 was a record year for retail closures with 7,000 stores boarded up in the US alone –  sales is still the number one function in retail, at 29 percent, followed by operations at 14 percent, and engineering/IT at 9 percent.

Though 29 percent may seem like a respectable chunk of the jobs to be had, it’s down from 32 percent in 2013, and the on-the-ground workers are feeling the earth get shaky beneath their feet. One former retail associate who was recently laid off from Saks Fifth Avenue related to the New York Times that she is leaving the industry entirely.

“I really like helping customers create a new style,” the 27-year-old relayed, who was once paid $16 an hour. “But there is no job security anymore.”

Software developers, on the other hand, have popped up from the eighth most popular retail title in 2013, up to third in 2017, overleaping (in its growth from seven to nine percent of retail jobs) both “marketing specialist” and “operations specialist”. And while still under a third of the sales fraction, the need for these programmers will grow as it has in the last four years, given that e-commerce has gone from 3.5 percent of retails sales to 11.9 percent in the past decade, and twice as many online retailers with 100 employees or more have gone to market than traditional brick and mortar between 2011 and 2015.

We are still a bit sad about #toysrus closing, am I right ? pic.twitter.com/ftZscOY2Jf

— Chocolate Fudge (@tchocolatefudge) July 10, 2018

Interestingly, it seems that engineering and sales demands have an inverse relationship in retail, where 25 percent online retail functions are tech or IT, and 35 percent of brick and mortar functions are sales, while operations and marketing stay consistent at 14 percent and 6 percent respectively, whether online or in store.

So what does this mean for recruiting? Number one, the competition for tech talent will only grow fiercer. Number two, retailers are going to have to change their recruitment strategy to focus more on employer branding and candidate experience to attract these sought-after workers. Even Walmart has started its first ever employer-branding campaign, in the form of tuition benefits for one of three colleges that offer supply chain management courses.

Other retailers may want to take notes, as Walmart’s course of action is not without reason. Sales associates are most likely to leave their career path for either admin or customer service roles, if not for more schooling. So a tuition benefit covers both, keeping employees in the fold, and hopefully equipping them with more useful skills for the future – all the while injecting them with a healthy dose of company loyalty. Subsidised education may the ace in the sleeve that retail needs in order to ensure it has the talent to survive. The demand is there, they just have to deliver.