How to Profit From the Ultra-Tight Job Market Right Now

Time was when recruiters at Intuit, the software company that makes TurboTax and QuickBooks, could ask job candidates back for multiple interviews before making a decision. Not now. “We don’t have that time anymore,” says HR chief Sherry Whiteley. Competition for excellent candidates has become so brutal that “we’ve had to reinvent how we do recruiting.” Using a team of employees who have proved themselves sharp judges of talent, the company puts candidates through a day of interviews and tests. Then the team convenes and makes a decision. “A lot of times we’ll bring people in, and they get same-day offers. We’ve had to do it,” says Whiteley, who adds, “Recruiting keeps me up at night.”

Watch and learn: The war for talent that obsesses tech companies is intensifying and is about to spread economywide. After almost nine years of mostly sluggish expansion, the U.S. economy has shifted into a higher gear and is creating jobs at a record pace. “The new year has started with a job market as robust as any in recent years,” reports the Korn Ferry recruiting firm., the most widely used job site, says, “Get ready for a hiring boom.” With the labor market tighter than it has been in decades, workers who’ve been yearning to change jobs finally have their moment.

Forecasters are highly confident of the coming boom because they’re looking at simple economics. About 6 million jobs are open at U.S. companies, near an all-time high. Yet employers are filling jobs at the slowest rate in three years, unable to sign the employees they need as more people find work and stop looking. Growing demand, shrinking supply—that’s the formula for rising prices, known in the labor market as pay.

Fortune's Feb. 1, 2018 cover.
Fortune’s Feb. 1, 2018 cover.

Some recent statistics on demand have ticked down slightly but remain within the range of the past few months. Even if the market eased a bit, it would still be historically tight. Unemployment, at 4.1%, is the lowest since the economic boom that crested just before the 2001 recession. The Fed had long considered a rate of 5.6% to represent “full employment”; when it’s lower, anyone seeking work is assumed to be simply transitioning to a new job. The Fed revised its full-employment estimate down to 4.6% last year, by far the lowest ever, but with unemployment now well below even that, relatively few people seeking a job are unable to find one.

And that’s in the economy overall. Among knowledge workers, managers, and other businesspeople, unemployment is far lower. For workers with a bachelor’s degree or more, the rate is just 2.1%. In management occupations it’s 2%, and within that category, unemployment in “business and financial occupations” as measured by the Bureau of Labor Statistics, is a near-invisible 1.7%, equaling the lowest unemployment rate among all job classifications economywide. “Right now the job market for professional, leadership, and new technology jobs is white hot,” says Josh Bersin, a principal at Deloitte Consulting and a longtime HR thought leader. For businesspeople looking to jump, now is a long-awaited chance to find a better employer and maybe notch a substantial raise.

As for the latter, even that seems to be changing in the new job market. In private industry, says the Bureau of Labor Statistics, wages and salaries rose at 2.6% for the 12 months ended September 2017—20 basis points above the rate the prior year and notably higher than what we saw in the first half of the decade. That recent upswing is just a start, however. Economists widely expect that pay will continue rising across the U.S. in 2018—and likely accelerate for management roles and other professional fields. Compensation, indeed, is already rising smartly in cities where unemployment rates have plunged as low as they are in business occupations. In Minneapolis, for example, where unemployment was recently 2.3%, pay is rising at a 4% annual clip.

Nicolas Rapp
Nicolas Rapp

Here, as with much else in business, the tech sector has blazed a trail that’s likely to wind across the corporate realm. Google (GOOGL) once offered a staff engineer $3.5 million of restricted stock to turn down an offer from Facebook (FB), TechCrunch reported. (The engineer took the deal.) No, the fights over top candidates won’t grow quite so fevered in other industries, but a tussle for talent there will be.

And employers are taking unusual steps to attract recruits. Some are relaxing their zero-tolerance drug policy because they’re “desperate to fill open positions,” the Society for Human Resource Management (SHRM) has found. Workers in safety-critical jobs will still be tested, and some, such as airline pilots and truck drivers, are governed by federal rules. While evidence is anecdotal, some employers seem set to continue drug testing all applicants and taking a hard line on use of opioids, methamphetamine, and cocaine. But barring marijuana use eliminates a lot of applicants. With 30 states and the District of Columbia having broadly legalized marijuana in some form, at least a few employers are reportedly treating it like alcohol: Don’t show up impaired or get that way on the job, and you’re fine.

Employers are opening the door wider in another surprising way. They’re not demanding the same educational degrees that they used to. “The reality for many positions, across most organizations, is that education has no influence on actual performance,” Tim Sackett, head of the HRU Technical Resources staffing firm, recently told SHRM members. He believes HR managers are “lazy” and use educational attainment as an easy filter for an excess of applicants. But now that applicants for many positions are sparse, employers will have to look harder. His message to HR managers: “In 2018, you’ll hire people you never would have hired in 2008.”

Sackett is raising a major question for job hunters. As employers are forced to confront what really makes employees successful today, what skills and traits are they seeking in candidates? This may be a great environment in which to find a new job, but you’ll likely still face competition. On what basis will you be judged?

Jennifer Livingston—Trunk Archive
Jennifer Livingston—Trunk Archive

One of the qualities employers most value now is called grit—the fortitude, insight, and ability to adapt on the fly that often comes from overcoming adversity or disadvantage in life, as Ellen McGirt explains in the feature “How Your Life Experience Could Help You Land a Great Job.”

Another hot word is “potential.” It isn’t as obvious as it sounds. Our résumé-based model of evaluating job candidates assumes that what you’ll be doing in your next job is at least broadly similar to what you did in your last one. But employers increasingly find that in a continually disrupted business environment, what you’ll be doing next bears little relation to anything you’ve done before. With today’s employees, as with mutual funds, “past performance is not the best indicator of future success,” says Rajeev Vasudeva, CEO of the Egon Zehnder executive recruiting firm. “Clients want somebody with a great track record, but that may not predict a great future.”

How can an employer identify candidates who really do have a great future? Step 1 is by abandoning the résumé as currently conceived, says Jennifer Carpenter, Accenture’s global head of recruiting. “Résumés are screening out exceptional people,” she says, because most résumés don’t tell employers what they need to know—information about creativity, willingness to work hard, and love of learning. “That’s what is most important when we’re trying to evaluate potential.”

Vasudeva says Egon Zehnder has done considerable work to identify markers of potential. The most significant is “curiosity—openness to learn, to new ideas.” Also crucial are “capability to adapt, to deal with constant disruption and chaos.” Overlaying all those abilities: “willingness to learn about yourself, openness to feedback and to adapting yourself.” These factors combine to signal potential, which has become the crucial variable in top-level people decisions, Vasudeva says. “A company may have two candidates in the same ballpark, but the defining element is potential.”

Read more: How to Get On a Headhunter’s Radar

Résumés probably won’t disappear anytime soon, so yours will somehow need to convey those traits and abilities.

Other in-demand qualities are more specific. We hear every day that digital skills are highly valued, and it’s certainly true—but the market for those skills extends far beyond software makers and dotcoms. Every company is a technology company now, which means that in every kind of business, candidates with digital skills will increasingly get the best jobs. For example, the Robert Half staffing firm has identified the hottest jobs in the creative and marketing fields for 2018. The top five? Content strategist, digital marketing manager, digital project manager, digital strategist, and marketing analytics manager.

You’ll see the same trend in job postings at over the past five years. The industry with the sharpest increase in software jobs listed on the site isn’t the computer biz, but rather retailing. The takeaway for job seekers is unmistakable: Every industry is digital, and every gig requires some of that expertise.

Nicolas Rapp
Nicolas Rapp

Even more valuable than digital skills, though, are digital skills combined with something larger. “When it comes to technical and digital skills, people can be put into two buckets,” says Rich Kramer, CEO of Goodyear Tire & Rubber. “There are people with pure tech skills—for example, how to go direct to consumers. And then there are individuals who can think through new business models: that is, how we’re going to use technology to create value, know who our customer is and what problem we’re solving. That’s really hard. But we have to understand that before we start writing code.”

It’s the difference between people who can figure out how customers can text pickup requests to a taxi company and people who can conceive of an Uber or a Lyft. “Google may have a lot of those people, but incumbent or mid-market companies may have only five or 10, and they make a disproportionate income,” says Kramer. “They really make the difference.”

Read more: How to Ask for Your Next Big Raise

One more theme comes through strongly in canvassing a wide range of job market authorities, a trend more profound than the others. “The whole human side is now more important than skills or IQ,” says Vasudeva of Egon Zehnder. “Everything we hear from clients is about the human aspects of leadership: vulnerability, humility.” Across industries, employers are prizing people skills, the so-called soft skills, more highly than before. Even in strictly defined technology jobs, employers are increasingly looking for “soft skills and leadership abilities,” says the Robert Half firm, adding that “many employers now view these skills as requirements for some IT roles.”

The objectives of those human skills in companies today are clear. One is “making people feel they’re part of an organization that matters,” says Jason Baumgarten, a search consultant at Spencer Stuart. That’s because today’s best candidates “want to make a difference. They’re very purpose-driven,” says Intuit’s Whiteley, an observation widely echoed. Another objective is “building an emotional connection” with followers, says Vasudeva, citing a recent study of 500 CEOs worldwide that his firm conducted. Without that, followers won’t follow. As Baumgarten puts it, “Today people work for you because they want to, not because they have to.”

Maybe the deepest part of that emotional connection is showing employees that the leader genuinely cares about them. It may sound hopelessly warm and fuzzy, but those in the thick of hiring and evaluating leaders agree that it’s important, and it’s what employers are demanding. As Goodyear’s Kramer says, he needs leaders “who can let you know that someone is looking out for you.”

Many companies are thus coming late to a realization that dawned on Google almost a decade ago, when Laszlo Bock was running HR. “We were hiring on the wrong criteria—SAT scores, schools, majors,” says Bock, who has cofounded a tech firm called Humu to help leaders, managers, and other employees be more productive and happier. “We did a three-year study proving those were not predictive of job performance.” What predicted a leader’s success far better than tech skills or test scores, they found, was simply making a human connection with followers, being interested in their lives and careers, and being accessible to them. Employees were happier, more productive, and less likely to leave.

To repeat, employers increasingly want deep human skills at all levels. Which leads to a question for the fired-up job seeker who wants to capitalize on this extraordinarily favorable environment: If you’re fluent in those skills, how do you convey that fact to an interviewer? It’s not as if you can put a certification on your résumé. Bock has the best answer, which stands as an overall wise job interview plan. “You can anticipate 90% of the questions you’re going to get asked, so the correct strategy is to practice answering those questions over and over. When you get those questions, you can just talk without having to think too hard. Then if you have these social and emotional skills, you need to apply them in that meeting like you never applied them in your life. In 30 minutes you’ve got to make that person fall in love with you. That’s the best way to convince an employer.”

One more suggestion: Do it now. You never know how long white-hot markets are going to last.

A version of this article appears in the Feb. 1, 2018 issue of Fortune with the headline “Ready, Set, Jump!”

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