April marks the beginning of Spring (supposedly) as well as the end of Q1. We can’t promise you warm weather. But we can promise you more Hirewell Data Insights.
We compile the hiring data across our 6 practice areas, 100+ recruiters, and 300+ clients. Sure, it is an opportunity for me to shout out to our team for some amazing work. But it also shows quite a few hiring trends. I think it is a barometer of the hiring market. At least in the areas we specialize (Tech, Sales, HR, Marketing, and F&A). You can check out the 2021 Recap version here. Let’s get to what happened in Q1.
Hiring Continued to Boom in Q1
By every metric (hires, jobs, interview activity) we saw a substantial increase from Q1 2021. Overall hiring activity was up 67% from the previous year. But in drilling down in a few key areas, we saw some interesting trends. The biggest YoY jumps were in Human Resources & Talent Acquisition (up 211%), Finance and Accounting (up 250%, and Marketing (up 300%). Why? Those areas were slow out of the gates last year. There was a lot of uncertainty in the market and people were reluctant to hire. Definitely not the case in 2022.
Comparing Q1 2022 to Q3 2021?
YoY comps are fun to look at, but ultimately pretty misleading. When the bar you are trying to clear is pretty low (last year’s comps), it doesn’t tell you much. And comparing to the prior quarter (q4 2021) is also a bit misleading. Due to seasonal hiring pauses Q4 is always a bit slow. So we decided to compare Q1 22 to our busiest quarter of last year (q3). The numbers were interesting. Hiring volume was up 9% in Q1 22. Long story short? Hiring is at an all-time high.
A Slowdown in Staffing
Not everything was up though. We saw a fairly substantial decrease (41%) in the hiring of contingent labor. That wasn’t for a lack of roles though. There was plenty of demand. But there was not enough talent that was open to contract or project-based work. Especially in the world of contract recruiters or software engineers. With the rise in salaries last year, it is understandable. Contract work usually pays a premium. Unless rates go up, there isn’t enough of a justification to walk away from an FTE gig. Companies that traditionally lean on contingent labor will have to raise their rates or look for off-shore talent (or both).
Signs of a Peak?
For the first time in a year, we saw a slowdown in hiring for internal recruiters. Last year, we averaged 25 placements of internal recruiters per quarter. In Q1, that number dropped by 30%. But it wasn’t due to lack of demand. The number of internal recruiter job openings hit an all-time high (up 10%). But the market is so hot, that there wasn’t enough talent to fill the roles. Recruiters are getting multiple offers. Or taking counter-offers to stay in their current roles.
And for the first time in over a year, we saw salaries flatten. Last year there was an increase in average salary every quarter. In Q1, recruiter salaries ($109k) were flat from Q4. Same for the average salary of engineers ($134k). Does this mean salary inflation is over? No, far from it. There were plenty of instances where we saw individual salaries >30% above the average. But those were balanced out by companies electing to hire less experienced talent (20-30% below the average).
What does this all mean? I wish I had answers. It is an environment like I’ve never seen. There are plenty of factors that could make the back of this year challenging (global conflicts, inflation, rising rates, etc.). We continue to believe in the areas we are investing – automation to make recruiters more efficient, talent marketplaces to allow companies and job seekers to interact directly, and training to address labor shortages.
As usual – James Hornick and I got together to record a video. Check it out!