A feature of the current economic recovery is that hiring has not kept pace with other measures of an improving business climate. While one common explanation is that employers are afraid to commit due to lingering business uncertainty, the difficulty employers report in finding qualified candidates for skilled roles may indicate that changes in worker behavior and values are reducing hiring in the U.S.
A release in late 2011 by the U.S. Census Bureau revealed that worker mobility has reached its lowest point since the Census began keeping track in 1948. The portion of people who changed residences between 2010 and 2011 was 11.6%, substantially lower than the 16% rate recorded in 2006. While most changes in residence are for housing reasons, longer distance moves are most often associated with employment. Moves between states have declined steadily from 2.8% of the adult population in 2001-02 to 1.6% in 2008-09 (see chart below).
Americans 25-64 Years Moving to Another State
Many factors likely contribute to the historic low in worker relocation. Down economies are associated with a decline in relocations, as workers face difficulty in selling homes, concern about job opportunities for partners, and a lack of savings to fund a move. However, the recent recession appears to have accelerated a deeper long term trend in declining employee mobility. A strong element of changing personal preference may be occurring, with individuals more reluctant to move away from family and community.
What implications does this change have for employers? With fewer workers willing to move, hiring companies are faced with a smaller pool of qualified candidates competing for their open positions. This leaves employers to deal with upward cost pressures on salary, incentives and relocation assistance. The recent rapid pace of temporary help hiring suggests that employers have turned to contingent workers as part of the solution, as sophisticated companies appear increasingly to rely on “as needed” talent to meet their staffing needs and control costs. Finally, many companies continue to increase their support for remote and virtual workers in high-skill positions.