I made a 2025 resolution to write more about market trends. The obvious first one was to write a 2024 recap and make a few predictions about 2025. The problem is that if you wait too long, no one will care.
It is the last day of January. We are 2+ weeks past being able to say “Happy New Year,” unless you are blatantly asking for a favor or trying to sell something.
I swear I’ve been busy. But no one cares. Better late than never? Let’s hope.
What did we see in 2024? A lot. The year started better than 2023 ended. It picked up steam as time went on. Since 2023 ended with a whimper, our year-over-year results were up big (35%) in the back half of the year. It is deeper than that, though. For 2+ years now, we’ve seen a tale of two job markets.
There are companies with capital, and there are those without.
We’ve discussed ZIRP and the effect of rising interest rates many times. Seeing it play out in real time was fascinating. Scary is probably the better adjective. I’ve been through plenty of bad markets. As painful as they were, everyone understood them. They involved a bubble (dot-com stocks or housing/mortgages). Both were extremely obvious in hindsight.
When those bubbles popped, it was ugly. This was different. Like the air being let out of a tire. Over six quarters, hiring demand dropped 10-15% per quarter. We called the bottom two or three times before it actually came (Q3 2023). I’m happy to report that we’ve seen a rebound. But it isn’t as simple as that..
A tale of two job markets
Overall, all of our metrics were up ~10% from 2023. Digging deeper, it wasn’t that simple. Some things were up:
- Real Estate/Construction hiring was up 26%
- Go To Market (GTM) hiring was up 24%
- Corporate Functions (HR + F&A + Ops) hiring was up 5%
Others were down:
- Industrial – 5%
- Tech – 8%
Why? Companies that have capital have been reluctant to spend it (unless they are investing in AI). Many that are hiring are doing it off (and) near-shore. Those without it are just trying to survive. Others were scared about the uncertainty of the election.
There has been something else, though. When looking back at 2021 and 2022, efficiency was not a priority. That has never been the case before (thanks ZIRP). Now, companies are figuring out how to do things better, faster, and cheaper. That means using technology to automate things. Asking employees to do more with less. And hiring lower-cost labor that live in other parts of the world.
How did those employees who were asked to do more with less survive? By leaning into technology. Or working alongside colleagues that may sit 5,000+ miles away. Most importantly? How does that apply to the recruiting world? The recruiters that have thrived have evolved.
- They stayed ahead of the trends when it comes to industries and/or functions.
- They had to truly add value to the process. No one needs recruiters who are just pushing paper.
- They were consultative partners to hiring managers who leveraged technology and efficient processes to do things better and faster. And do both without breaking the bank.
Those concepts apply to more than just those of us in recruiting.
Some more numbers
Digging deeper, there were several interesting trends:
- Construction hiring boomed in the first 7-8 months and then leveled off as the year progressed.
- Go-to-market hiring (sales and marketing) was heavily skewed toward sales hiring. There was an uptick in Customer Success Hiring after very little activity in the previous 18 months.
- Sales hiring was up across all industries.
- SaaS/Tech came back online after a slow 2023.
- Financial Services and Insurance hiring spiked.
- We kicked off multiple engagements for volume sales hiring (20+ roles across a variety of industries).
- The drop in tech hiring was almost entirely due to the drop in the demand for software engineers. We placed 300+ engineers in 2022, but that number has dropped significantly since.
- A spike in hiring for off-shore and nearshore engineering talent. We’ve helped clients hire technical talent in Europe, India, and South America.
- Clients tapping us to hire internal recruiters has still been non-existent. In 2021, we placed 105 recruiters and TA professionals. We placed 5 last year.
The Most Encouraging Trend
Our Executive Search and RPO business started to accelerate in the middle of the year. Our value prop has been placing leaders and helping them build teams. Unfortunately, our Executive Searches delivered hit an all-time low in 2023. In 2024? They jumped 71% (45 searches completed).
We also saw a big uptick in our RPO business. RPOs (Recruitment Process Outsourcing) are multi-month, multi-hire engagements. Companies retain us to help them hire 5-50+ people. Some are part of a specific initiative. In other engagements, we run their entire hiring efforts. Flexible, custom recruiting engagements. So hot right now.
In 2023, we sold 5 RPOs. That’s not good. In 2024, we sold over 20. Eighty percent of those were in the back half of the year. Some companies had cut too deep and couldn’t manage hiring with their existing team. Others realized that hiring wasn’t forever. The idea of hiring (and then firing) recruiters (again) didn’t make sense.
The future
What does that mean for 2025? I hate to be boring, but I think it will be a lot of the same. While there is always uncertainty in politics, CEOs know who is in the White House and have a better idea of what policies will look like.
- Companies that put off hiring are now behind the 8 ball. Quit rates are at a 5 year low. Employee sentiment is also way down.. That’s not a good combination. As the market heats up, be prepared for a lot of turnover. Plus, we have more and more boomers retiring. We are seeing the effects of that quite a bit in our Industrial practice.
- Offshoring will continue to be a real option for companies. If your employees are remote, does it matter whether they are in SF, Miami, or Colombia?
- AI will be talked about a lot. Will it revolutionize recruiting? It feels a year (at least) away. It isn’t all positive. It has almost completely ruined job postings. Applying to jobs with AI, customized resumes, and the easy apply button is way too easy. And don’t get me started about spam email campaigns.
- Consultative recruiters will continue to win. Transactional ones who don’t add value to job seekers or hiring managers will struggle. You can change recruiters to salespeople and the same thoughts will apply.
- RPOs and Custom Recruiting Solutions will continue to expand. Four weeks into 2025, we’ve kicked off two large RPOs (each with 50+ hires). And we’ve got proposals out for several more.
Want to hear more about this? Tune into this podcast, where I discuss trends and other market developments.
And if you want to talk about custom recruiting solutions? Get in touch.
BTW – we are hiring. If you are an experienced, full-desk recruiter who wants to sell and deliver a mixture of retained search and custom RPO Solutions, we’d love to chat!
