The hot job market has almost become a crisis – JOSH BERSIN

Unbelievable. After four months of worries about a recession and steadily rising interest rates, the BLS announced today that 528,000 jobs had been created and the unemployment rate had fallen to 3.5%. This is the lowest since 1969, a year when I was in college.

And at the same time, more and more jobs are being created, the GDP itself is slowing down. What does it mean? Well, economists keep getting it wrong – it’s actually quite simple. The economy is shifting from goods to services, with an ever-increasing need for people.

As I explain in the video below, we have automated many things in the business world, but technology never stops. The very idea that a computer or AI system will “replace people” is silly. As soon as you build it, something else happens, so if you don’t have people to monitor it, evolve it, and adapt it, the technology just loses its value.

That’s why companies like Google, Apple, Amazon and Microsoft continue to hire. Technology itself is a people-centric business, and now that we can work from anywhere, every company’s talent model is global.

Why do I say it’s a crisis? Because, quite simply, you can’t “make more people” in a flash. We can solve the global supply chain problem by building a factory, buying a ship, or expanding a distribution center. People don’t work like that. We need to educate, train and coach them to perform well on the job. And as all the data now shows, when you “push” people too hard, they just quit, check out, or change careers.

I won’t repeat all the research we’ve talked about, but numerous studies now prove that almost a third of the workforce will change employers this year and that more than 40% of those job seekers will change of industry. So regardless of these layoffs, you find that in overbloated tech companies, virtually every company is struggling to hire, retain, and grow their workforces.

There are many underlying causes for this: low fertility rates, early retirement of baby boomers, and the frustrating and difficult work experience that many people face in retail, transportation, hospitality and other industries. And of course people feel underpaid when inflation rises, and most employees feel overworked. (81% feel exhausted.)

My goal is not to repeat what you probably already know, but rather to tell you that this problem is don’t go away. This shift to “service-centric” industries is a significant and lasting effect, and it sends the message that every business, regardless of industry or size, is now in the business of people and talent.

Next week we’re launching a fascinating new look at the corporate training industry and you’ll see just how impacted it is by this issue, and in September we’re launching our Global Workforce Intelligence research and you’ll see all of this data in detail .

The big message for CEOs and CHROs, however, is that you need to think about your business differently. You can no longer simply “recruit” your way out of this problem. We need what we call “systemic HR” strategies and fully integrated HR operating models that bring together the four Rs: Recruit, Retain, Reskill and Redesign, all in an integrated way.

We’ll explain this in more detail in the coming months, but it’s now clear from all of our research that you need to do these things in new and innovative ways. This is the only way to deal with this existential labor shortage.

The only real solution, regardless of the direction of the economy, is to treat people as an asset. As I describe in my book, it’s time to “make your business irresistible,” and all that that entails.

Every company we talk to is figuring out how to do this, and that’s ultimately the solution to the crisis. Stay tuned for more.

Additional Resources

Mental health in the workplace is now a corporate strategy

Irresistible by Design: the winning strategy for today

Watch out for layoffs

How work design and task design are holding businesses back

Unlocking Human Potential: The Real Secret to Business Success

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