Horizon Point Consulting

Category: Beyond Work

Beyond Work is our line of resources for people and community leaders looking for something new and innovative outside, be it a new job, career change, or personal development outside of work.

  • What’s Affecting the Labor Force Participation Rate?

    What’s Affecting the Labor Force Participation Rate?

    What is the Labor Participation Rate and how does it impact employers and the economic outlook? 

    According to OECD.org, “The labor force participation rate is calculated as the labor force divided by the total working-age population. The working age population refers to people aged 15 to 64. This indicator is broken down by age group and it is measured as a percentage of each age group.” 

    There are many factors impacting the Labor Market in 2023 including the benefits’ cliff, boomers exiting the workforce, the rate of working-aged males declining, women leaving the workforce by the millions and the decline in fertility rates.

    One reason some workers are deciding not to work or to stay in low paying jobs is the Benefits Cliff. The benefits’ cliff occurs when an increase in someone’s pay triggers a greater loss in public assistance such as food, healthcare, childcare and housing. This happens because public assistance does not gradually decrease as income rises. Instead, it “drops off a cliff” at a certain income. This leaves prime candidates stuck between a rock and a hard place.  Some may be quick to fault those not participating because of this or not participating fully (working less than full time in order to keep their benefits), but these individuals are making an economic decision and a wise one at that.  

    Next, we have the mass exodus of the baby boomers. Boomers made an economic decision to remain in the labor force during the great recession, causing them to begin exiting the labor force much later than historically anticipated. Now, boomers are retiring at a staggering rate. While we are still living in a work world created by the boomers, they are no longer the primary contributors. According to PEW Research Center, the number of baby boomers exciting the labor force has grown by about two million since 2011. Then, from 2019 to 2020 the numbers jumped by 3.2 million. 

    Why does this matter? Well, this group is often vacating higher level positions in their companies and the transfer of knowledge can be a challenge. Not to mention boomers aren’t being replaced at the same rate of exit and some who are retiring are passing down tremendous amounts of wealth to their children. This creates children that more than likely won’t be filling their parents’ shoes. 

    According to The Demographic Drought by Emsi male millennials are the next group that are in sharp decline in the labor force. Males have been AWOL since 1980. With boomers having such wealth, it left men not taking on the responsibility of getting a job until after 20 or moving out of their parents’ home either. Another economic decision. Add in the opioid epidemic, and males of prime age are being taken away from the market. Also, among the Millennials, there has been a shift from full-time work to part-time work. The reason for this says Lightcast in The Demography Drought is video games, yes video games! 

    chart showing the decline of male labor force participation

    Men aren’t the only ones we are looking at here. According to the latest Women in the Workplace Study by Lean In and McKenzie & Company, women are demanding more from work and are leaving their companies in order to get it. Some are referring to it as the “Great Breakup”. In addition, childcare prices are soaring and quality care is a challenge to find.  That leads to women taking on the majority of the child care responsibilities. Again, this is another group is making an economic decision.  Paying for quality childcare is often more expensive than bringing home a paycheck to cover it, so women are opting out. One report found that from 2020 to 2021 mothers took on the majority of child care responsibilities, spending an average of 7.1 hours per day caring for their children.

    Finally, BLS.gov shares that population is the single most important factor in determining the size and composition of the labor force. So, what does that mean for the downward trend in US Fertility Rates? There is a growing number of childless US adults who don’t expect to ever have children. Again, are they making an economic decision not to have children? What impact does this have on the future of the Labor Force Participation Rate? Evidence would point to the conclusion that it will continue to decline under these circumstances.

    Many people are making decisions based on a variety of factors, including the economics of working, to opt out of the labor force or not opt for full time participation.  What does this mean to our macroeconomic situation?  And what does this mean for employers?  In order for people to opt to enter and remain, we will all have to think about how to weigh costs and benefits of such decisions.  

  • Alabama’s Best Kept Secret

    Alabama’s Best Kept Secret

    This week we have a very special guest blogger, Cassie Shropshire, with the Alabama Department of Rehabilitation Services (ADRS)!

    This year made the 33rd anniversary of The Americans with Disabilities Act (ADA). The act is a federal civil rights law that prohibits discrimination against people with disabilities in everyday life activities. The ADA guarantees that people with disabilities have the same opportunities as everyone else to enjoy employment opportunities, purchase goods and services, and participate in state and local government programs. Just four years after the ADA was signed into law, the Alabama Legislature created a state agency that would be committed to serve Alabamians with disabilities throughout their lifespan. That state agency is known as the Alabama Department of Rehabilitation Services (ADRS). ADRS has a “continuum of care approach, meaning that there is help at every stage of a person’s life. Their mission is to enable children and adults with disabilities to achieve their maximum potential. 

    ADRS has four different programs to support their continuum of care approach with their Vocational Rehabilitation Service (VRS) program being its largest program. VRS provides specialized employment and education related services and training to youth and adults with disabilities, helping them attain their employment goals. These employment services and trainings are available throughout the entire state. Each year VRS helps thousands of individuals with disabilities across the state of Alabama with college sponsorship, training program, and obtain employment. This also includes insuring that these individuals receive employment and educational accommodations needed to guarantee success in the classroom and on the job. Not only does VRS provides services to individuals with disabilities, but the program has a special team of Business Relations Consultants that work directly with employers with recruitment, cost-saving incentives including tax credits, employment retention/disability, no-cost disability related trainings, technical assistance, and help with accommodations and accessibility guidance on the Americans with disabilities Act and other legislation.

    I know you’re thinking WOW, what an amazing agency! These programs sound great!  Why haven’t I heard about this organization before? I always tell people that we are the best kept secret in the state of Alabama and that our services are underutilized. I have worked with ADRS for 9 ½ years, currently working as a Business Relations Consultant. I will admit that being in this role has been one of the most fulfilling, yet challenging roles that I’ve ever been in. I’ve been able to see so many people have access to employment and accommodations, but I’ve also experienced closed minds and doors to potential job candidates because they weren’t considered ideal. However, as a Business Relations Consultant, our team works daily to show how hiring people with disabilities is the best choice a business can make.  My favorite success story that I like to share with people when they ask me about some of the harder cases I’ve worked, is the story of a brilliant autistic young man who was told he would never work because he was nonverbal. After working to determine his needs and partnering with a company that was open to hiring people with disabilities despite their challenges, that young man is now gainfully employed fulltime with benefits. I’ve been afforded the opportunity to train businesses on disability etiquette, hiring dos and don’ts for people with disabilities, and the current hot topic of how to hire and support Neurodiversity in the workplace. Thankfully in the Huntsville area and more areas across the state, we are beginning to see a shift in thinking and more people with disabilities are going to work.

    Are you a business wanting to hire more people with disabilities, or make your workplace more diverse, equitable, and inclusive? Then you should tap into the no cost resources available to you through the Alabama Department of Rehabilitation Services. We are eager to partner with you and fulfill your labor needs. 

    Cassie Shropshire, MS, CRC, LPC
    Business Relations Consultant
    Alabama Department of Rehabilitation Services
    cassie.shropshire@rehab.alabama.gov

  • The Economics of Union Activity

    The Economics of Union Activity

    Supply and Demand. The first lesson of Economics, or at least I remember it that way. The most important lesson of economics as I remember it. 

    Maybe I’m remembering it wrong, but I think the issues of the supply and demand of labor need to be reinforced when we think about anything and everything that is going on in our world. And one of those things is union activity. 

    The issues at Starbuck, Amazon, UPS… the list goes on and on about union organization and in the media seems on the surface to be about wages, benefits, and the overall treatment of workers. As Jillian pointed out in our last post,  People want to be valued and listened to.  They need to feel like they have some sense of control over their lives, and that includes at work.  Many employers don’t offer that.  When people don’t have this at work, they aren’t happy. 

    But none of that matters from a union sense if only one person feels that way. Many people have to feel that way. And when many people feel that way and there aren’t enough people to go around to fill the demand for labor, they have power.  Or in union terms, they have “collective bargaining” power. 

    And right now, there aren’t enough people to go around to fill jobs in many industries both in terms of the actual number of human beings available and or in terms of a desire to work in certain jobs or industries. And it is only going to get worse. 

    Typically, this issue of supply and demand for labor is measured by the number of job openings compared to the number of available workers. According to the Bureau of Labor Statistics, there have been more job openings compared to unemployed people since May 2021.  In January 2023, there were almost twice as many job openings as there were unemployed people in the United States according to this BLS data. 

    This challenge is not unique to the United States. Boston Consulting Group’s The Global Workforce Crisis- $10 Trillion at Risk  highlights the differences in labor supply and demand by country (both Germany and Japan are experiencing particularly acute issues with labor supply).  Whereas some countries are currently experiencing a higher level of supply than demand, the piece emphasizes that by 2030 most countries will experience labor shortages.  BCG postulates that this issue could result in $10 Trillion in GDP not created. 

    So, when there is more of a demand for labor than there is supply, employers better pay attention. We would hope they don’t have to pay attention because they are treating people like people. But when they aren’t, the most important law of economics will bite you.  Workers will all leave and go someplace else, because someone else needs them, because there are more jobs than people available to fill them. 

    We can be distracted by the media saying artificial intelligence (AI) is going to take over all our jobs, but the data doesn’t show this. We may need to retool ourselves for the jobs of the future, and that may be where employers need to be focused to not only help with labor supply issues but also to employee engagement issues. Both impact union activity. 

    What are you doing to impact labor supply and union activity? 

  • Could You Pass a Labor Relations Class?

    Could You Pass a Labor Relations Class?

    School is starting back, and that means I’m collecting the latest news on union activity – good, bad, and ugly – for a college-level labor relations course I’m teaching. Each of us at Horizon Point has a unique perspective on the union landscape through our work with various clients and projects, which we’ll be sharing in a series over the next few weeks. 

    I’m kicking us off with a look at union activity right here in our North Alabama region, featuring a snippet from the 2023 Wage & Benefit Survey. When asked if any employees are represented by a union, only 3% of participating companies said yes:

    All of these companies are in the manufacturing industry. Is that surprising? Why or why not? (I won’t grade you on it!)

    In the same wage survey, we ask questions about pay practices, compensation, and benefits – these factors contribute to employee satisfaction and whether or not they’ll seek unionization. You may have noticed that big names like Amazon, Starbucks, and UPS have been making news for employee union activity and the sometimes less-than-stellar response from corporate leadership. Workplaces are more advanced than ever before, but sometimes labor practices don’t keep up.

    SHRM recently published “The Evolution of HR and Labor Relations” for the Summer 2023 edition of HR Magazine. The biggest takeaway for me? The last sentence: 

    “The worker of today isn’t so different from the worker of yesterday in terms of their core human needs,” [Steve] Bernstein says. “What people really want in the workplace is to be listened to, to have access to decision-making and to be in a position to at least influence their workplace.”  

    Stick with us over the next few weeks as we explore further the changing (and stagnant) trends around labor relations and why it matters for YOU.

  • Application Process 2023

    Application Process 2023

    Should you Change your Application Process to make it easier for Candidates?

    A couple of years ago, we worked with a client who was having difficulty filling positions. They were using all the right avenues to get the word out to potential candidates, but the pipeline was not working. After surveying several candidates, we discovered the issue was with their extensive application process. It was lengthy and ultimately deterred candidates from completing their application. Fortunately, we helped them streamline by removing some of the steps to apply.

    Recently, a close family member applied for a position online and had the opposite experience. During a conversation, he shared that it was the “easiest process” he’d had while applying for jobs. He was asked two questions and had the option to upload a resume. Within a week, he was called in for an interview.

    In Alabama, the current unemployment rate is 2.2%. Which means, most everyone who wants to work is already working. This makes it tough for companies who are looking to expand their workforce. Making the application process easier for candidates is one way they can attract future employees. A few weeks ago, I was in a café that had “mini applications” placed throughout their dining area. I immediately took a picture, thinking of our clients & how we can help them increase their applicant pool.

    How can you streamline your hiring process? Consider what steps you can remove from the process all together. Save the paperwork for new hire orientation! Let us know if we can help.