Quick Hits - June 29, 2022 - American Society of Employers - ASE Staff

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Quick Hits - June 29, 2022

Wondering why we cannot find talent? Michigan’s unemployment rate dropped from 6.2% to 4.3% over the past year.  In Detroit area surprisingly, 4.6%.  Source:  BLS 6/17/22 

Need IT talent? Technology companies in May axed employees at the highest rate in two years, as rising interest rates and a stock market selloff squeeze startups and Big Tech firms alike.  66 tech firms handed out a whopping 16,800 pink slips last month. That’s more than the 13,600 layoffs across 52 companies during the first four months of 2022 combined — and the most employees to get the axe in a single month since May 2020, according to tech jobs tracking site layoffs.fyi.  The opportunity is there for recruitment as Detroit and the Big Three turn more to technology than ever before.  Source:  NY Post 5/31/22

Construction is feeling the labor pinch: Construction projects across the U.S. are running short on labor just as $1 trillion in federal infrastructure money starts to kick in, leading companies to get creative in their quest to attract and retain workers.  In Southern states, contractors advertise sunny weather and 12 months of work on help-wanted websites in the frostier Northeast and Midwest, where highway construction goes dormant during the winter months. Project managers in remote areas are luring employees with signing and referral bonuses and per diems for housing, knowing they won’t be able to find enough workers locally. Associated General Contractors of America, which represents more than 27,000 construction companies, said publicly funded transportation projects are routinely coming in at least 20% higher than government officials anticipated because of added labor costs, as well as inflationary factors such as higher prices for fuel and raw materials.  “The severity of the labor shortage means you’re paying workers more and your construction schedules are longer, both of which are big drivers in overall cost,” said Brian Turmail, the industry group’s vice president of public affairs and strategic initiatives.  Source:  Wall Street Journal 6/20/22

Should you make a counteroffer when a high-performer employee is leaving? In an online poll run by  Smart Brief,  a surprising portion (46%) reported that when a high-performer says they're leaving your organization that no counteroffer is made to get them to stay. While that's understandable from a "salary ransom" avoidance perspective, not even trying to keep them seems shortsighted. While you don't want to encourage the behavior of people seeking new opportunities just to use it as leverage to get a raise, you also don't want to simply let top-talent flee. First, it sends a message to those who stay that the company doesn't really value high performers. Second, the investment you've made in recruiting, training, and developing those high performers just walked out the door and you now have to replace them, which will be costly. Consider the long-term and broader costs of losing a high performer when deciding whether or not to make a counteroffer to keep them within your organization. The math might surprise you and prod you into making a counteroffer to keep that talented individual around.  Source: Smart Brief on Leadership 6/21/22

Is a recession coming?  Not according to CEOs:  Nearly 300 U.S. CEOs participated in Chief Executive’s CEO Confidence Index poll in June, sharing their prospect of the U.S. economy and business landscape. While their ratings of current business conditions remained flat month-over-month, at 6.4 out of 10, their forecast for business 12 months from now dropped another 6%, down to 5.6/10 from 5.9/10 in May. CEOs say it’s the uncertainty of the situation more than specific issues that is driving their forecast down, although the list of concerns they shared continues to grow each month. Among those: market volatility, a chaotic geopolitical scene, uncontrolled inflation, record-high oil prices, and continued labor and supply chain shortages are all adding to the mix fueling doubts over the future. “Labor and supply issues are buffering continued demand in excess of our ability to respond,” said the CEO of a large commercial truck dealership. Despite the gloomy forecast for the year to come, the majority of CEOs polled say they only anticipate a slowdown of the U.S. economy over the next 3 to 6 months; less than a quarter expect a full-on recession.  Source:  Chief Executive 6/13/22

Only in California could applicants be considered employees (but not): The U.S. Ninth Circuit Court of Appeals recently concluded that job applicants are not entitled to compensation for time devoted to pre-employment drug tests because an employment relationship has not yet been formed. The Ninth Circuit held that the “control test” does not apply to job applicants, and that, under California contract law, the applicants had no contract for employment until they passed the pre-hire drug tests. The case is Johnson v. WinCo Foods, No. 21-55501 (U.S. 9th Circuit of Appeals, June 13, 2022), Johnson makes clear that employers do not need to compensate job applicants for the time and expenses related to drug testing during the application process (except for the cost of the drug test, which employers should bear), and that the employment relationship does not begin until the condition is satisfied. To avoid any doubt, employers should be careful to expressly articulate that an offer of employment is contingent on passing the drug test and explain what must be done to satisfy the contingency.  Source:  Seyfarth Shaw 6/15/22



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