Via the Association for Talent Development, low unemployment sounds like a great thing, but it raises talent management challenges, including:
- Over inflated compensation and benefits. A competitive job market is a good thing. Top talent should be able to get what they deserve for their skills and experience. However, too much competition can cause employers to throw money at their talent problems. It might sound very attractive to candidates and employees to have money thrown at them, because no one likes being underpaid. But employees also don’t want to be overpaid.
- Less turnover. High turnover isn’t good for business. But zero turnover isn’t either. A little bit of turnover can bring in fresh perspectives, skills, or strengths. If the job market gets too tough, organizations might be reluctant to discipline or terminate employees for fear that they won’t be able to find a replacement for months. It’s that old philosophy of better to work with the devil you know than someone new.
Learn how to soften the impact of full employment in your organization.