From the course: Job Market Basics for Business Leaders

Unemployment rate

From the course: Job Market Basics for Business Leaders

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Unemployment rate

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- As a leader who's looking to hire, the best time to do so is when the unemployment rate is high and there are a lot of people looking for work. This means it's more of a buyer's market because you are the one buying human capital, you're trying to hire people. And if there are a lot of people looking for work, you can probably get really great people at a value priced point. Conversely, if you're looking to hire and the unemployment rates really low, there won't be too many people who are unemployed and you'll probably need to hire someone from another company. This means you'll probably be hiring at top dollar to get the people you need. In that market, it's not a buyer's market, it's a sellers market. And the people who have their labor to sell are the ones who are going to benefit. As a leader who might be looking to advance your own career, this implication is a bit flipped because you want to be looking for a job when the unemployment rate is low and you can capture the greatest value when you make a change. But you certainly don't want to be unemployed when a lot of people are unemployed, you don't even want to be looking for work when unemployment's high because you won't be able to capture as much of the upside as possible. You want to be a seller in a sellers market and a buyer in a buyer's market. That means when you're selling your labor, you want the unemployment rate to be low but when you're buying and you're hiring other people, you want the unemployment rate to be high.

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