Help Wanted…NOT!  Fake Job Postings Skew Labor Statistics Creating Unknown Risks for Project Managers

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In the ever-evolving landscape of project management, staying informed about economic trends is crucial. One key source of information is jobs report data, which provides insights into employment trends, labor market dynamics, workforce shifts, and is a critical aspect of economic decision-making.  The labor market’s health significantly influences monetary policy formulation. Central banks closely monitor job reports to assess economic conditions. Understanding this dynamic is essential for policymakers, economists, and investors and how these policies can influence the costs of commodities and human resources.

Monetary policy shifts impact project budget and risk assessment especially if the project budget has little or no room for variation, as in the case of a government grant funded project.  Recent surveys are revealing that companies are advertising “ghost jobs”, either intentionally through fake job posts or unintentionally through neglected job posts.  These ghost jobs are impacting jobs report data, are impacting the integrity of government jobs reports, and could impact project constraints as well as a Project Manager’s risk analysis.

The Significance of Jobs Reports

Jobs reports, released periodically by government agencies and research institutions, offer a snapshot of employment conditions. Key components include:

1. Unemployment Rate: This metric reflects the percentage of the labor force actively seeking employment. A declining unemployment rate suggests economic recovery and increased project opportunities.
2. Job Creation/Number of Unemployed Person per Job Opening: Nonfarm payrolls data reveal the number of jobs added or lost across various sectors. Project managers can gauge industry-specific demand and allocate resources accordingly.  Unfortunately, this is the data that is often incorrect.
3. Wage Trends: Rising wages impact project costs and resource allocation. Understanding wage growth helps project managers negotiate contracts and manage budgets effectively.

Monetary Policies

The Federal Reserve responds to economic conditions by utilizing tools at their disposal to control the supply of cash in the market to combat high inflation or prevent an economic recession.  These responses can affect the employment rate and labor market.  Therefore, the Federal Reservice needs to monitor the labor market to know if they can tighten or need to ease monetary policies.  Some of these tools are (Editors of Encyclopaedia Britannica, 2024):

1. Buying or selling government securities
2. Adjusting the discount rates
3. Adjusting bank reserve requirements

Fake Job Postings: Ghost Jobs

Ever applied for a job you know you are qualified for just to quickly get a response that the position has been filled or you are no longer being considered or the employer never gets back to you?  The problem may not be your dossier or resume.  You may have just applied to a fake job posting.  In an article from the Wall Street Journal, more than a quarter of hiring managers who were surveyed admitted to advertising for jobs they are not actively trying to fill (Chen, 2023).  These types of job postings are referred to as “ghost jobs”.  While one company, when questioned about job postings that had been up for a while that had not been filled, denies doing so with any “ill-intentions”, recruiters and applicants applying for those positions have different opinions.  Applicants, especially recent graduates looking to launch their career, feel they are wasting their time with the application process and questionnaires.

Why Employers Are Not Actively Trying to Fill Positions?

In 2022 Clarify Capital, a New York based company that helps small businesses secure financing, surveyed managers involved in hiring about their ghost job postings; some of their responses were as follows (Clarify Capital, 2023):

• 50% – company is always open to new people
• 47% – to give the impression that the company is growing
• 43% – to keep current employees motivated
• 39% – job was filled
• 37% – want to have an active pool of applicants in case of turnover
• 35% – in case an irresistible candidate applies
• 34% – to placate overworked employees
• 27% – forgot to delete the job

In an article from Forbes magazine, many companies have policies to post jobs online to promote diverse hiring even though the company has already identified a candidate; this practice creates a “false impression that it is a fair and open hiring process” (Kelly, 2023).

How Jobs Report Data Impacts Projects

1. Resource Allocation:
   • Positive jobs data may lead to increased project demand. Project managers must allocate resources efficiently to meet growing needs.
   • Negative employment trends may require resource optimization and strategic adjustments.
2. Project Scope and Timing:
   • Employment fluctuations affect project timelines. A tight labor market may delay hiring, impacting project schedules.
   • Project managers must adapt to workforce availability and plan accordingly.
3. Industry-Specific Insights:
   • Sector-specific jobs data provide insights into industry health. For example:
     • A surge in healthcare jobs may signal increased demand for hospital construction projects.
     • Declining retail employment may impact commercial real estate development.
4. Risk Assessment:
   • Economic instability influences project risk. Project managers assess the impact of employment trends on project viability.
   • High unemployment rates may lead to project delays or cancellations.

Conclusion

As project managers, we must monitor jobs report data as a compass for decision-making. By understanding employment trends, we can adapt our strategies, optimize resources, and deliver successful projects in a dynamic environment.  Unfortunately, the date can be intentionally skewed which can distort the Job Openings and Labor Turnover Survey (JOLTS) that is published by the Bureau of Labor Statistics (BLS).  For example, when the economy starts to come out of a recession, data shows there are more job openings than available or unemployed persons (Figure 1).  This information may not be accurate as companies are likely posting jobs they have no intention of filling.  Project Managers need to take this into account if their project relies on accurate workforce data or monetary policies that could affect commodity prices to accurately identify risk probability and impact. Behind every project milestone lies a workforce impacted by economic shifts.

References

1. Chen, T.-P. (2023, March 20). Job Listings Abound, but Many Are Fake: in an uncertain economy, companies post ads for jobs they might not really be trying to fill. Wall Street Journal.
2. Clarify Capital. (2023, October 23). Survey: Job Seekers Beware of Ghost Jobs. Retrieved from Clarify Capital: https://clarifycapital.com/job-seekers-beware-of-ghost-jobs-survey//
3. Editors of Encyclopaedia Britannica. (2024, April 12). Monetary Policy. Retrieved from Britannica: https://www.britannica.com/money/monetary-policy
4. Kelly, J. (2023, April 4). How ‘Fake’ Job Postings May Distort The U.S. JOLTS Report. Retrieved from Forbes: https://www.forbes.com/sites/jackkelly/2023/04/04/how-fake-job-postings-may-distort-the-us-jolts-report/?sh=701baec68d52