The US labor market, like that first-year-of-college fling, continues to send very mixed signals about where it stands. The government keeps publishing data that looks promising for both job-seekers and employers, yet layoffs are still in the headlines most days.
Job site ZipRecruiter announced in a May 31 filing it plans to lay off 270 employees, representing about 20% of its workforce, in response to “current market conditions.” In a May earnings call the company’s CEO, Ian Siegel, said ZipRecruiter had observed a slowdown “across industries.”
“We see employers paring back their hiring in response to the uncertain economic backdrop we now face,” he said. Indeed and Glassdoor, both ZipRecruiter competitors, have also laid off workers in recent months, citing a slowdown in job openings.
The same day ZipRecruiter said it would lay off workers, the Bureau of Labor Statistics (BLS) published new data showing an increase in US job openings to 10.1 million in April, surpassing analysts’ expectations. Hires increased, while layoffs decreased to 1.5 million, representing just 1% of the workforce. The US added 339,000 jobs in May, according to the most recent BLS figures; analysts had estimated just 195,000.
Labor market moderating. What explains recent rounds of layoffs in the recruiting industry, even as government data points to a still-robust labor market?
If you look beyond this latest report, job openings have slowed from an all-time peak, Nick Bunker, research director at Indeed’s Hiring Lab, told HR Brew.
“Yes, they ticked up in April, but if you take a longer view, they peaked back in March of last year,” Bunker said. He noted a little less than half of the job openings came from retail alone, which can be volatile, suggesting the higher level of available positions may not endure.
Job postings on Indeed have been declining steadily since the beginning of last year. The site’s most recent job postings index, which is about a month ahead of the BLS data, showed openings declining 1.9% from the previous month as of May 25, Bunker added.
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What this means for recruiters. The pandemic-era labor market was exceptional, spurring record levels of hiring that meant big business for recruiters.
When job openings rose to a record 12 million in March 2022, employers in industries like manufacturing, retail, and education and professional services were struggling to hire enough workers to meet business demands. Meanwhile, workers were quitting their jobs in droves, emboldened by a robust labor market.
That “fever pitch” of hiring and competition for workers has now subsided, Bunker said. The rate at which US workers quit their jobs was 2.4% in April, just shy of pre-pandemic levels. And the April hiring rate, at 3.9%, matches what it was in 2019.
There’s still “a healthy amount of hiring,” in the US, Bunker said. But “it's less than what we were seeing a year, or two years, ago.”
“Jobseekers market” As major job sites downsize their workforces, many recruiters and talent acquisition team members are out of work. Recruiting and HR were hit harder by tech layoffs than other departments, an October analysis by technical interviewing platform Interviewing.io found, with about half the staff in each of these departments laid off.
Joel Knippel, global head of talent acquisition and talent partnership at Unilever, wrote on LinkedIn that the recent BLS data suggests it’s still a “jobseeker’s market.” With labor-force participation rates still below pre-pandemic levels, he predicted job openings will outpace hires “for most of the better part of the year, potentially into 2024.”
“All of this means recruiters remain in high demand and that the strategic contribution of Talent Acquisition and Partnership…remains crucial to business success,” he wrote.