The United States added 187,000 jobs in July, which was below economists’ expectations. Nevertheless, with 31 consecutive months of job gains, the labor market remains strong. So, what does this look like for employers and jobseekers on the ground?
The data suggests the job market is in good health – but it feels more subdued compared to last year. In 2022, jobseekers had the upper hand due to record job vacancies and an acute shortage of skills. Mass resignations, inflated salaries and counteroffers were commonplace as people quit their jobs on a whim and businesses vied for top talent. Amid intense competition, employers often settled for candidates who met only 80% of their requirements – but today, the story is vastly different.
Due to a more challenging trading environment, employers are exercising caution and hiring with less urgency. Many are putting off non-essential hiring, and those looking for talent are being more thorough. Some are introducing skills assessments to help them select the perfect applicant, while others are introducing extra rounds of interviews.
The decision-making process is also taking longer than it did last year. According to Amy Laiker, who heads up Tiger Recruitment’s New York office, “A year ago, if a company didn’t respond within 24 hours after interviewing a candidate or they didn’t make a decision within a week on whether they wanted to hire them, that candidate was gone,” she said. “Whereas now, they can go a week, two weeks, three weeks, sometimes even four weeks. And that candidate’s probably still out there in the market.”
As a result, the hiring process has been extended, with the average time-to-hire rates for the first quarter of 2023 alone increasing by one day across all industries.
Another key trend is a growth in temporary and contractor hires, with some employers reluctant or unable to commit to permanent staff because of market uncertainty.
Job Security Rules, To A Point
Candidates are also considering their options carefully. Many are prioritizing job stability and security, but not at any cost.
There’s less movement in the market as people stay in jobs longer than last year, as reflected in a decrease in the short-tenure rate, which measures the fraction of positions that people leave after less than a year. Many would rather stay put than risk being the last one in, first one out.
For those actively looking for a new role, stability is a key consideration, and candidates are completing extensive due diligence to ensure a prospective employer is a safe and reliable long-term bet.
Conversely, this desire for job security has driven some candidates back on the market. These candidates often have impressive CVs and work for prestigious firms that, unfortunately, are unable to offer them the permanent position they’d like.
However, candidates aren’t willing to settle for just any role. Last year, many people quit their jobs without a second thought, although research shows that as many as 80% regretted their decision. This year, people are more discerning and less willing to compromise, even if they’re currently unemployed.
In the current market, candidates are rejecting opportunities that don’t satisfy all their needs, whether on salary or flexibility. For instance, a candidate recently turned down an opportunity with a top-notch company offering first-rate benefits simply because the role was hybrid and not fully remote. Although she’s currently out of work and her job search is slow, she’d rather wait for the right job than take any job.
Flexibility And Benefits Matter
This example also highlights the ongoing importance of flexible working for job seekers. Fully remote positions are rarer than hybrid roles and are highly sought-after. In fact, candidates are often willing to be more flexible on salary if they can work from home full-time, with some accepting pay cuts of between $20,000 and $30,000 a year.
As for salaries, in the business support industry, pay is returning to “normal” levels after the pandemic-related salary inflation of last year.
However, as Tiger Recruitment’s latest salary and benefits review reveals, candidates today are driven by more than remuneration. The benefits package is their number one consideration, and they’re seeking employers aligned with their values and aspirations. It’s all about finding the right match – which is in employers’ interests too.
A Better Employee-Employer Match
So, while the job market may be shifting towards caution, thoroughness, and reluctance to compromise, this change isn’t necessarily a bad thing. On the contrary, it offers much-needed respite from the intense hiring conditions of 2022 and introduces stability. The key for employers and jobseekers will be to balance making careful, well-informed decisions with moving the hiring process forward. Too much deliberation can result in missed opportunities on both sides, but the reward of making the right choice is better employer-employee matches in the long term.