At first glance, the report looked great. On Feb. 7, the U.S. Department of Labor announced that companies added 225,000 jobs in January, nearly 60,000 more than expected. The gaming industry alone added more than 5,000, part of a 36,000 increase in the hospitality and leisure sector. Average salaries rose as well, climbing 7 cents to $28.44 per hour. While all this points to a strengthening economy, business owners still face challenges.
Currently there are more openings than unemployed people to fill them as the Labor report states. That’s been an ongoing problem over the last 12 months, marking the first time since 2000 the ratio is smaller than at least 1 to 1. Virginia’s Colonial Downs and Colorado’s Marti Gras Casino, for example, both posted gaming supervisor positions in early January. Those spots are still open, along with other high-end positions like game mathematicians. In a searcher’s market, how can companies compete for the best employees? And specifically for the gaming industry, what does that involve?
Hiring in a Candidate Driven Market
In a searcher’s market, top talent often have multiple options. Does this make it harder to find and hire the best fit? The answer isn’t a simple yes or no.
“This is a great question- one I’m frequently asked by gaming leaders all across the industry,” said JBK CEO John Globokar. “The answer is not as simple as you might think. The highest performing leadership talent is immune to economic fluctuation. Why? The very best CEOs and executive leaders are focused on ensuring they have the very best leadership talent in each of their direct reports. Organizations that are talent-centric understand: whoever has the best talent wins.”
And yet, Globokar said, the United States finds itself in the midst of a perfect storm when it comes to hiring practices.
“In 2018, there were 7.3 million job openings and roughly 6 million people looking for work,” Globokar said. “That’s a 1.3 million deficit. The (final) 2019 statistics are not out yet, but we anticipate these numbers to grow. A low birth rate, strong economy and low unemployment equals a human capital crisis.”
As a result, companies need to adjust their hiring strategy. In a December 2019 study by Business Insider, 26 percent of company owners said it is “very difficult” to fill open positions with their preferred candidate. Fifty-two percent said it was “somewhat difficult.” The problem is often the available workforce doesn’t have the needed education. While overall unemployment stands at 3.6 percent, the rate for college-educated workers is much lower, near 2 percent. That means companies either have to poach from competitors or change the hiring requirements.
“Many of the country’s top technology innovators like Apple and IBM, for example, 50 percent of their new hires last year were high school graduates with no college,” Globokar said.
How Do You Handle Changes?
So if unemployment is down and there’s a limited pool of college-educated candidates, how do you fill openings? The answer, Globokar said, is to focus on culture.
“We tend to see companies that routinely struggle to attract the highest performers lacking a defined ‘people strategy’ that in turn defines the business strategy,” Globokar said.
He pointed out we often see companies in the gaming industry attempt to leverage compensation, proprietary technology or brand as their competitive advantage throughout the interview process. And yes, all applicants consider things like money, time off and a weekly schedule. But salaries can always be matched, time off can be added. The culture, the one thing that makes companies unique, can’t be.
“(The highest performers) are primarily focused on evaluating the culture and leadership of the organization,” Globokar said. “Be clear about what your culture is today, not what it will be.”
A December 2017 Gallup poll backs this up. The report found that happy, engaged employees produce up to a 50 percent better performance than those not invested. That’s why focusing on culture is so important. Happy workers have a stronger loyalty to the company, the report found and they’re less likely to quit. It’s not always about who can do the technical aspects of the work. It’s about who is the best fit, who connects with the personalities and the goals in place.
Will the Market Hold Steady?
The biggest question when it comes to hiring involves the economy. What will it look like two weeks or two months from now? The answer, according to Dr. John Connaughton, is roughly about the same.
“I think what you’re seeing here is a return of enthusiasm for where the economy’s going,” said Dr. Connaughton, who serves as a professor with UNC Charlotte’s Belk School of Business. “I think the economy through at least the first and second quarter of this year will be pretty good. I think in general there are a number of sectors doing well.”
That includes the gaming industry and, on a larger scale, the entire hospitality and leisure industry, which added 36,000 jobs in January. Part of that growth comes from sports betting, which officially launched in multiple states at the beginning of 2020. Six states signed off on the practice in 2019, with plans to launch in the new year. One of those was New Hampshire, which signed an exclusive contract with DraftKings in November. In the first week of January, the company set up physical locations, as well as online and mobile betting.
It’s possible the gaming industry could raise future employment numbers as well. Michigan, Montana, North Carolina, Tennessee, Illinois and Washington D.C. are all in various stages of launching their sports betting programs. All approved the practice in 2019 but lawmakers are still arguing over the details. In Michigan, the Detroit Free Press reports it could take until 2021 to write and finalize the needed rules.
What’s Triggering Growth?
As for the overall economy, Dr. Connaughton said recent events helped buoy optimism among employers.
“Early in January, it became apparent there would be two important documents signed,” Dr. Connaughton said. “First, the president signed the USMCA, the United States Mexico Canada Agreement, NAFTA’s replacement. Second, the first phase of the China trade deal got signed.”
He pointed to December’s job numbers as an example of the impact both trade deals had. Companies added 145,000 added jobs in December, 80,000 less than the beginning of 2020.
“Early in January, it was apparent the Chinese trade deal would improve the U.S. portion of trade with China for the first time since the two began heavy trading in 1990,” Connaughton said. “December’s number was depressed by the uncertainty of those things.January’s numbers were buoyed by the completion. Do we still have trade wars and tariffs? Yes. But this shows trade is going to resume. I think what you’re seeing here is a return of enthusiasm for where the economy’s going.”
Connaughton also said he expected salaries to continue growing as companies fight for top talent. Over the last 12 months, the average salary climbed 3.1 percent and in January alone, it rose 7 cents.
“That’s a really good number,” Connaughton said. “Considering the tightness in the labor market, taking into consideration there are more job openings than workers to fill them, it puts considerable pressure on labor markets. Employers are having to raise wages to attract workers. I don’t see that changing, at least in the first quarter of this year.”
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JBK International is one of the fastest growing high-end retained search firms in the global Casino, Gaming Technology and iGaming markets. We empower our clients to drive lasting positive change and growth through leadership. We serve our clients as trusted advisors, providing customized solutions across executive search, leadership assessment and development, and culture shaping.
Vice President of Communications, JBK International