Filling Jobs in the Era of Full Employment

Every day, businesses in America, whether they are machine shops, fabrication shops, restaurants or retail establishments, are facing the same problem—not enough people to fill their job openings. For a minute, take away the legitimate lack of highly skilled trades professionals such as CNC programmers, machine repair professionals on the blue-collar side, and the lack of accountants and IT professionals on the white-collar side, and simply focus on the lack of able bodies to fill entry-level or low-skill jobs. Simply put, there aren’t enough. The United States workforce is at full employment.

According to Marty Feldstein, professor of economics at Harvard University, the U.S. has been at full employment since at least June of 2015. He bases his belief on an acceleration of wages to attract and retain employees. Couple that with the longest job growth streak of more than 80 consecutive months of job gains the U.S. has enjoyed, the data is clearly validating what employers are feeling regarding the lack of labor.

Employers are in a new and uncomfortable position. There has been a shift in power within the labor pool; the worker now has many job options, and they are looking for the best deal for themselves. Wages, location, benefits are all still important. Now employers need to add to the list work-life balance, a huge collective mind-set amongst millennials.

One employer who is listening and growing his revenue at the same time, is Shark Tank funding recipient Stephan Aarstol, CEO and founder of beach-lifestyle company, Tower. After striking a deal for $150,000 with Mark Cuban for 30 percent of his company, Mr. Aarstol has grown his annual revenue from $500,000 to $9 million in less than five years. And his employees only work five hours per day, without a reduction in pay from the previous eight hours per day income level.

In his book, “The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness,” he argues that “the idea that workers can be productive being forced to endure 70 percent of their week at work so they can enjoy the other 30 percent seems to me to be a clear case of collective insanity.”

To be clear, Tower only reduced employee work time by 120 minutes, while creating much more employee freedom to enjoy life during the week. “The five-hour day is about managing human energy more efficiently by working in bursts over a shorter period,” Mr. Aarstol says, adding, “Humans are not machines. So just because you see employees at their desk for eight hours doesn’t mean they are being productive. Even some of your best employees probably only accomplish two to three hours of actual work over the standard work day.”

According to Mr. Aarstol, having more time to pursue passions, nurture relationships and stay active improves worker productivity by making employees happier while giving them more energy emotionally and physically. Furthermore, he says, a five-hour workday bakes in time management by forcing employees to prioritize high-value activities.

A corollary of this work-life balance shift has been the movement from contractor positions to freelance positions. For many years, large companies could hire contractors in departments such as engineering for projects. Those employees would come in through a third-party employer who would handle recruiting, payroll responsibilities and benefits to the employee, who would not become an internal employee of the company. This allowed the employer the workforce flexibility to get project-based work done, without the long-term commitment to the worker accomplishing the work. And it eliminated employee legacy costs such as pensions or 401K.

While many employees are still willing to do contract work, an increasing number are choosing to do freelance work instead. The use of online portals such as upwork.com or getleverage.com to offer their services to an employer allows them the work-life balance they value so highly. They can work as often or as little as they would like, whenever or wherever they would like. While this type of work dynamic would not work for a restaurant worker or plumber, for knowledge-based workers, it is seen by many people as an ideal way to build the life, not the career, they want.