tldr depends on who you (I) mean by “we”
On Friday we had another “blow it out of the water” jobs report. But we still have a ton of out-of-work recruiters. What’s going on?
If you missed it: +339,000 jobs in May. (Source.)
That includes 64,000 jobs in professional and business services. Or as we (I) affectionately call them (us): office dorks.
Unemployment did rise 0.3% to 3.7%. But that’s still incredibly low. Historically speaking.
Meanwhile, the market is on fire. The S&P 500 is up 12% for the year. Nasdaq’s up around 30%. (Those of you with a time machine in your basement, I highly recommend going back and getting long /NQ futures.)
More hiring. More investment. But still not many recruiter openings on a relative basis.
3 things that are happening:
1. The open jobs to unemployed worker ratio is way, way down.
It was 2:1 in March 2022. And only 1.6:1 in March 2023. (Source.)
I think using job ads as an indicator of real job openings is problematic for a variety of reasons. But…a 20% drop is huge.
Key thing to remember: unlike every other function in a company, recruiters aren’t needed to maintain. They’re needed to grow (or replace.)
👉There’s not a lack of demand. There’s a lack of *excessive* demand.
Remember “the war for talent?” Easily my least favorite catch phrase of the past decade. But that war is currently at a stalemate.
Companies are not eating each other alive to hire the way they were. Talking to my HR and internal TA contacts recently, the amount of inbound candidates they’re getting is up. Outbound isn’t as necessary. And the candidates they do get don’t have as many other offers.
(Vetting inbound candidates is still a challenge but that’s another rant for another day.)
2. Only 7 stocks are driving the stock market: Alphabet, Apple, Meta and Nvidia, Amazon, Microsoft and Tesla. (Source.)
This isn’t abnormal. The biggest firms have propped up the market for over a decade now. They’re massive. And their big up moves lift the market disproportionately.
But the effect of not every company joining the fun? They’re not full bore hiring.
Also, The Seven (yes that’s a The Boys reference) just did their massive layoffs. They aren’t participating in the hiring that’s happening right now.
And they’re the ones who drove the ‘war for talent’ the last few years. So back to point #1.
3. If you’re reading this, you’re probably in the office dork bubble.
Tech firms are only 3% of the economy. It feels massive when you’re in it. But the LinkedIn & Business Twitter echo chamber is a drop in the bucket.
When my non-work friends get together and discuss work (gross, I know), it’s the tale of two markets. Half complain no one is hiring. The other half complains they can’t find anyone.
Both seem unaware of the other group’s situation.
Manufacturing ain’t sexy, but they need people.