The latest job numbers show record-low unemployment of only 3.8 percent, numbers that have not been seen since the year 2000. In fact, CNBC recently wrote that there are now more open positions—6.7 million at the end of April—than there are available workers—6.4 million. These numbers can be discouraging for companies who need to engage in executive search, because it suggests that there may not be enough candidates to fill out a search, or that the search will be very difficult to complete.
Hope For Executive Search
There’s no doubt that the economy is roaring after years of recession and sluggish growth, and in large part due to the major tax cuts that were passed at the end of 2017. But although a tight labor market is usually bad news for recruiting, and it will cause some difficulties, there are some silver linings even in these job numbers.
While the unemployment rate is definitely dropping, 3.8 percent only counts certain unemployed workers—those who have reported that they are actively searching for a job. Another measure of unemployment, known as the U6, also counts workers who are not working but may have stopped actively looking for a job because of discouragement or other factors, as well as those who are underemployed and would like to work in the field they trained for.
As you might expect, the U6 unemployment rate is significantly higher than the official rate, or about 7.3 percent in May. Finding some of these discouraged workers may be a task that many recruiters undertake in order to overcome candidate shortfalls, and it can be a strategy for executive search as well.
The reality is, if companies don’t begin to look for candidates who aren’t technically looking for a job, they will make the search process more difficult and overlook many sources of top talent. And while the U6 number has shrunk proportionally along with the more publicized numbers, it still represents millions of potential workers who would be willing to change jobs or get back into the job market if the right opportunity comes along.
Looking Beyond the Unemployed
Let’s face it—many who have trained and worked as corporate executives may not need to continue working. CEOs and other executives are compensated at rates far above the national average, which means that they can often afford to be part of that U6 unemployment pool, hanging back in order to search for the right opportunity.
Passive candidates who may not be currently working as executives or who may work for another company but be open to a change are the best source of talent in a tight labor market, and the key to executive search is finding these candidates and enticing them to throw their hat in the ring for your open position.
Thrive TRM is a tool that can assist companies in their executive search efforts by providing a centralized dashboard the entire hiring team can access and be instantly updated on developments like new candidate profiles, interview feedback, and instant reports on the status of the search. Discover executive search solutions and get the help you need to overcome market limitations.