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Low Unemployment Rate in Finance

National unemployment has dropped to 4% - the lowest in 18 years - according to the Bureau of Labor’s second quarter report. The unemployment rate is even lower across the finance and accounting profession – 2%. In general, low unemployment is often sought after and seen as an important feat for the country’s workforce – more people gainfully employed is often viewed as only advantageous to the economy. However, there are noticeable challenges to this very low unemployment rate, for both organizations and professionals. Focusing on the finance and accounting profession, let’s consider some matters of which to be mindful during this time of record-low unemployment.

Lack of Productivity
In a market of low unemployment, hiring managers may make compromises in hiring decisions. When an organization has a high number of open positions, combined with a tight candidate market, there is a great deal of pressure for roles to be filled. This can lead to hiring managers extending offers to candidates that aren’t truly qualified for their responsibilities. In turn, this could result in a finance and accounting function not operating effectively and perhaps also be damaging to an underqualified employees’ career when they are placed in a role in which success could be challenging. Hiring managers may want to consider whether they can tolerate the risk associated with hiring the best candidate available instead of a truly qualified candidate. Some organizations may decide to wait for the most qualified candidate or perhaps pursue alternative staffing models while continuing to look for the best permanent employee for the role.

Tight Candidate Pool
For those searching for a finance career in today’s market, you are in luck. Along with a low 2% unemployment rate, employees are enjoying more job security, making the candidate pool much tighter than years prior. Additionally, there are more choices available due to the number of positions that have been recently created. While this is great news for job hunters, it is tough on employers. Not only is attracting the right candidate difficult but retaining talent has also become extremely challenging. In addition to a tight candidate pool is the emergence of non-traditional roles that catch the eye of millennials. Employees are more inclined to job hop in order to experience different areas of specialization. Now more than ever, employers may want to give new or increased focus to retention strategies. In addition to ensuring compensation is competitive with the market, reviewing non-monetary retention strategies is also critical. Strategies such as job rotation can create diversity for employees that may be tempted to look outside the organization for new challenges. Work-life balance initiatives such as flexible work schedules might also be a way that an organization can stay competitive.