When I was asked to moderate a main-stage discussion at ERE’s Fall Expo in September with two economic analysts from Morningstar, I was both excited and a bit worried. To clarify, for those who may not know, Morningstar (not to be confused with Morningstar Farms, the maker of frozen meatless meals) is a leading provider of independent investment research in North America, Europe, Australia, and Asia. It offers investment consulting and retirement planning services and manage nearly $200 billion in assets. Among other things, Morningstar employs a crackerjack team of economists and analysts who research and comment on trends in the global marketplace.
I was (and am) excited to be a part of this particular session because I’m a news junkie, I’m passionate about HR/talent acquisition development, as well as the need for HR professionals (that includes you, recruiters) to understand and use information about our economy to drive business results.
But I was also a bit nervous because — let’s face it — most HR professionals will proclaim (with little if any hesitation): “I’m terrible at math”; “I don’t get numbers”; and that “I’m a ‘people’ person.” Bottom line: news and trends about the economy are not top of mind for many in our field. So I knew right away that my challenge was going to be getting folks engaged with this topic. But I’m always up for a good challenge.
The trends in our economy affect our business and our roles as talent professionals every day. But what information is the most important? What can we do with it? Why should we care?
Let’s break it down: Each month, the U.S. Department of Labor’s Bureau of Labor Statistics measures labor market activity, working conditions, and price changes in the economy. The monthly jobs report is part of this suite of data and is, as NPR says, “an important weather vane for anyone trying to get a bead on which way the economic winds are blowing.”
Embedded in the monthly BLS data is information such as the number of jobs added in the last month in the U.S., hours worked, unemployment rate, personal income data, and so on. Now there’s no need to dig through pages and pages of raw data because people like our friends at Morningstar do the heavy lifting for us. All you need to do is watch a 5 or 10-minute video about the most salient information.
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Is Talent Acquisition a Strategic Business Partner to Companies?
HR professionals can use these figures to predict and prepare for organizational changes they may soon encounter. Fluctuations in the number of jobs added each month provide clues to recruiters and others to get ready to either expand or cut back on hiring. Aggregate job growth generally predicts increased company revenues/sales, which leads companies to allocate more funds toward hiring to prepare for a hike in demand.
More broadly, HR leaders can use monthly employment reports to draw conclusions about two broad concerns: 1) the organization’s future budgeting capacity based on growth, spending, and employment trends, and 2) the attitudes/behavior of the market. After all, these reports are largely driven by consumer expectations, but they greatly affect consumer behaviors as well. When the numbers are poor, businesses sometimes react immediately by hoarding cash, freezing hiring, and cutting spending. This in turn, affects consumer spending.
These reports are general indicators and show macros trends; they can’t predict specific scenarios or outcomes that organizations will face. But they still provide invaluable economic insights and should be seen as a key tool for decision making. Plus, keeping tabs on such data helps drive the business acumen of HR professionals and, in turn, their credibility to business leaders within the organization. And, these reports and analysts’ assessments of their meaning (like Morningstar’s) are free. So if you haven’t been using this information as a data point and resource, start now by looking at the most recent Morningstar commentary or the BLS Monthly Job Report itself.