05 May Oklahoma City’s Labor Market, a Mirror Image of the Housing Market
“High demand, low supply, and inflated prices” – a culmination of words that most Catch Phrase contestants would use to garner the answer “Housing Market” from their team. However, these words have quickly become common in describing the current labor market in Oklahoma City.
Over the past year we have witnessed a slew of new offices and new operations centers of national companies and a slew of startup companies being established in Oklahoma City. We have seen national companies with established offices in OKC move positions from other offices to OKC. Companies and investors are swarming to OKC to capitalize on the low cost of living, talent pool, lower labor costs, and state and local government policies that are business-friendly and allow businesses to be open for business. They are also swarming to get in the mix with their counterparts and competitors in quickly growing OKC sectors such as aerospace, defense, technology, transportation, and banking. All of this has resulted in a surge in demand for OKC labor. And to further this demand- oil and gas companies are hiring again.
With that being said, we have seen an increase in talent moving to OKC. A local U-Haul dealer that I know well had 48 different families from California alone turn in their U-Haul to him upon moving here between April 2020 and August 2020. Another friend of mine is a construction foreman for a large, OKC home builder. He shared that almost half of their homes are being purchased by people moving here from out of state. We’re seeing it ourselves with more and more out-of-state resumes coming into our pipeline. However, it’s not enough. There remains a significant mismatch between the current supply and demand for labor in OKC. We hear hiring managers and business owners talk about it daily, primarily from calls to obtain our assistance in filling jobs that they are not able to fill on their own. Labor, highly specialized and even common, is simply hard to find in OKC at the moment.
Another factor driving the low supply of labor is generous government unemployment benefits and the extended duration of those benefits. It has been over ten years since we have heard prospective candidates tell us they aren’t interested in a job because they prefer to remain on unemployment. We are increasingly hearing this reasoning. As we have seen in the past, this could be problematic for many of these people when their unemployment runs out and they reflect an extended period of unemployment on their resume during a time in which it is well-known that the demand for OKC labor is strong. Additionally, there are those reluctant to make a move. Some are nervous about making a move due to COVID: situations where they have gained trust with their existing employer who is allowing them to work from home, concerns about becoming the low man on the totem pole / possibly the first to be laid off at a new place of employment if there is another outbreak, and worries about having to be trained remotely if there is another widespread quarantine.
So, what does all of this mean? As with the intersection of any supply and demand curve, as demand increases and supply remains steady (or supply increases at a slower pace than demand) there is a price increase. We are already witnessing the beginning stages of salary increases in OKC. Many of our clients have already increased compensation and/or their benefits for their employees and new hires. Just yesterday we placed a candidate with a client who is starting our candidate off at a 10% higher base salary than the same level of talent started out at six months ago. A friend recently sent me a photo of a wholesale retailer advertising starting hourly pay of $16/hr. That is almost the equivalent of a starting, bachelor’s degree teacher salary. It is also consistent with what we traditionally see for many entry-level, office professional jobs that require experience and/or a degree.
In closing, we are in a candidate-driven market. If you’re not happy with your current financial or job situation, get out there and take a peek. Even if it’s just reaching out to your local staffing and recruiting agency to see what options they might have, it doesn’t hurt. If you’re on unemployment and there are suitable jobs to your qualifications and previous pay, we highly recommend getting back to work. If you’re a hiring manager having trouble hiring, you’re not the only one. Don’t hesitate to call an expert to see what they’re seeing as far as the availability of certain candidate pools and associated salary trends. We’re in this together, and we’re here to help our OKC family. #OKCstrong. -Adam Giddens, Fuse3 Solutions