January 31, 2022

Hirewell Data Insights – 2021 Year in Review + 2022 Outlook

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Episode Highlights

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2021 came and went in the blink of an eye. Coming off of an extremely challenging year, no one knew what to expect 12 months ago.  We saw signs of the job market thawing in Q42020. The Unemployment Rate hit 6.7% in Dec 2020 (down from 14.7% in April 2020). But a recovery was far from certain.

Twelve months later?  Labor shortages are plaguing every industry.  The unemployment rate hit 3.9% in December 2021.  But that is only part of the story. The labor participation rate (percentage of Adult Americans in the workforce is near an all-time low of 61.9%. Broad numbers about the market as a whole aren’t terribly useful.  Understanding how they affect you or your company is more important.

Hirewell started releasing our Quarterly Data Insights series to discuss the trends we are seeing in hiring. We’ve got 90+ recruiters across the US.  They are spread across six functional practices – Tech, Human Resources & Recruiting, Finance & Accounting, Marketing, and Real Estate/Construction. In 2021, we helped over 350 companies hire over 1500 people.  So we see firsthand what is happening when it comes to hiring. We crunched the numbers to see what happened in 2021.  And what might be in store for 2022.

2021 Hiring Trends

The year-over-year increase in hiring volume was massive. Our hiring volume increased 2.5x.  Hiring increased 30% every quarter (compared to the previous quarter) until Q4, when we saw the standard slow down around the holidays. When looking at year over year numbers, Q4 was up 310% from the prior year.

What was hot?  Software engineers.  But that is no surprise.  The insatiable demand for engineers barely slowed down in 2020.  In 2021 we helped companies hire over 200 software engineers.  But that is only part of the story.  We saw the average salary increase every quarter.

  • Q1 113k 
  • Q2 119k
  • Q3 127k
  • Q4 134k

That’s an increase in average compensation of 18% in one year.

What else was hot?  Recruiters.  Hirewell launched its HR & Recruiters practice 10 years ago.  In that time, we have placed several hundred recruiters at companies across the US.  We placed 90 at clients in 2021. That was after placing 1 between April and October 2020.  When the market swings that wildly, it catches a lot of people by surprise.  It also causes salaries to spike quickly. 

  • Q1 Average Recruiter Salary = $85k
  • Q3/Q4 Average Recruiter Salary = $114k

That’s an increase of 34% in roughly 9 months. What a time to be alive for recruiters.

2021 Hirewell Internal Highlights

2021 was a busy year for us at Hirewell.  

  • We grew by over 40 people and are just under 100 employees.
  • We expanded nationally.  Pre-pandemic, >90% of our employees were in Chicago.  Now >33% of our people are in other markets.  
  • Our turnover was 6% (roughly a quarter of our industry’s average). The vast majority of that turnover was our employees going to work for our clients.

The biggest story for us in 2021?  We took on outside investment from Prytek and bought a software company. We think services + technology will be what drives our continued growth.

2022 – What’s next?

It is a fool’s exercise to predict what is going to happen in the course of a year.  That doesn’t mean we don’t have some educated guesses though.

  • Hiring in January picked up right where 2021 left off.  We saw an 18% year over year increase in job openings.  January starts are double what they were in 2021
  • There are roughly 11,000,000 open jobs in the US. There will continue to be a shortage of qualified candidates..
  • Recruiters are going to continue to be in high demand. As are software engineers.  
  • Wages are going to continue to rise, but for how long? 20+% increases are not sustainable for most companies.
  • Companies need to start thinking outside the box.  Upskilling existing workers and hiring people without prior experience needs to be a priority for all companies.
  • Recruiting technology needs to evolve. There is a shortage of recruiters. And they spend way too much time sourcing candidates.  We are working to address this challenge.

What’s next for Hirewell

We are continuing to hire – we’ve brought on 8 new hires in January. Our OnDemand Recruiting practice is on pace to grow 100% from 2021. Our investment in technology is already paying dividends for our recruiters at Hirewell.  We are excited to roll it (Sourcwell) out to clients later in Q1.  If you are interested in becoming a beta client – let us know!

Episode Transcript

Hi, everybody. Welcome to the talent insights podcast, special edition: Data Insights Q1 2022. Have a hard time saying 2022.

I remember when you used to write on your checks and it’s always the year before, now no one even knows what checks are, but now it’s like my emails or whatever. I’m still like putting the wrong dates on- anyways. Brought to you by Hirewell and Sourcewell, it’s the data show. So once again, I’m joined by the nerdiest man

I know, Hirewell CEO, Matt Massucci. Hi James. Thanks. Yeah, I know how excited you are to come do these shows once a quarter with me. This is kind of kicking off the year, it’s also kind of a wrap-up of last year. So we’re always talking about like, you know, the Q1 show- it’s actually, we’re talking with Q4 data and whatnot. But we put something together here and it’s really interesting.

The year over year and I’ll quickly kind of tee this off. How did we do 2020, the year before that versus the 2021? Just to give everyone a quick reminder in context of how insane it’s been. So the unemployment rate from January 2020, you might remember things were great. There were no problems in the world, 3.5%. April 2020, when everything just completely hit the fan 14.7% and then fast forward all the way to December 2021, where last quarter left off all the way down to 3.9%.

So still kind of mind boggling to me. What’s actually mean though, in terms of like the numbers that we saw, that we were pumping out as a firm, like, what was the volume looking like? Yeah. I mean, for anybody who is not a loyal listener, we’re spread across a variety of industries of readily functional areas.

I mean our recruiters specialize in tech, HR, which is recruiting for recruiters, marketing sales, finance and accounting, and then real estate services. So we’ve got a pretty broad view of the market. We’re national at this point. We have clients in every city and a lot of them are national.

So we’ve seen a lot of volume and kind of to compare it, I mean it’s 2020 is the greatest comp year ever for a lot of us, but especially in the recruiting industry. We saw volume increase two and a half times. I think our total searches executed in 2020 was 600.

And we exceeded 1500 last year. So it’s definitely some, some crazy numbers and spread across 350 different clients. So if you think about that it’s some large numbers and it kind of gives us some pretty unique market insight. Yeah. And the comp was strange too. I mean, just like the amount it skyrocketed within one year from like January 2021 until December 2021, to seeing the supply and demand factors, you know? There’s not enough devs, not enough recruiters to go around.

So everyone just got paid a ton more. What did it look like from the engineering side? Yeah. I mean I think again, Hirewell, we’ve done this for a really long time. It’s been 20 years. Tech is still our biggest practice and the numbers were pretty sizable. I mean, 2021 we placed over 200 engineers.

In that again, that’s with a very broad client base ranging from multi-billion dollar tech unicorns to kind of smaller, early stage companies, fortune 500 companies, professional services. But comp was up. I mean, that’s not shocking, but our average placement went up over 18% over the course of 12 months for what I think it started at like 105K was the average salary,

I think it ended like 134K or something along those numbers. So definitely some big, big increases. Yeah, it was every quarter- I think I was going through it, 113, 119, 127 to 134. These are average salaries across like all levels, but yeah, just the fact that it kept going up consistently.

And the same thing happened with recruiters. What’d that look like? The recruiting thing, it still blows my mind. I’d like to say we were really smart and getting into that business of placing HR people and recruiters, 10 plus years ago, because now it seems like everybody wants to do it. The whole ‘recruiting for recruiters’ term, which I’m not a huge fan of, but it’s something I hear and see a lot of.

We’ve been doing it for a long time. And we talked about it from April of 2020 through December of 2020, we placed one recruiter. It quickly picked up kind of going into 2021 and we did roughly 90 recruiter hires- and these are at our clients over the course of 2021.

We also hired 42 people internally. So we’ve got a really good grasp on what the recruiting market is and the salary increase there was the crazy one. I mean, from the numbers we’re seeing Q1 to what we saw Q4, those were up 32% over the course of the year.

Yeah. I was having a discussion with this on Twitter. There was someone asking, I think she took a new job a year ago at this time. She’s was starting to look again and was trying to get an idea, like what’s the market? I keep hearing like, numbers are going up and like, what should I be looking for?

I’m like, we’ll take the base you’ve got and add 32% and that should be your ask. So it’s crazy to say but I mean, and even that might be undershooting- I don’t know, so. Yeah. A friend of mine’s a CEO of a tech company and they’ve got one recruiter and he had texted me like, ‘Hey, you know, are recruiters asking for more money?”

He’s like, “I think he’s kind of nuts. What are you seeing in the market?” I’m like listen man, I know a little bit about his background and you need to be paying it more. I think like 120, 130 for a solid tech recruiters is pretty much what we’re seeing and he’s like, “Oh, alright, thanks.”

So maybe keep the names out of this one, but hopefully that guy got a nice raise it’s something he was clearly under market. So let’s have some, back to Q4, let’s have some little fun with the seasonal statistics cause December always kind of throws things off. How did things look in Q4 specifically? I mean, Q3 is pretty much every year our biggest quarter of the year. It’s kind of when everything is kind of firing on all cylinders. Budgets are in full force, summer’s over, companies are trying to get hires in before the end of the year.

And then Q4 is when it kind of dips a little bit. So every quarter last year we saw a pretty big increase. And then our comp quarter over quarter from Q3 to Q4 did see a 30% dip in hiring volume. Again the primary reason for that is that, you think about it, since we do so many hires that are full-time employees of companies, like not many people start new jobs between Thanksgiving and Christmas. So it’s kind of a six week window of kind of slowness.

So we saw it, we felt it. But again, like if we look at it kind of from the prior year, that’s where it’s probably better comp. Yeah. So apples, apples, what did it look like compared to Q4 of 2020? Yeah. And it’s interesting. So a year ago, like we felt pretty good, right?

Coming out of Q4, there was like the market was bouncing back. But when we look at our volume year over year, is up 310% from Q4 2020 to Q4 2021. And like I had to double check those numbers when I was pulling these because again, I thought last year was, or Q4 of 2020, like things seemed to be kind of bouncing back, but they’re nowhere near what it was or what it became.

Okay. Just silly numbers. Anyways, let’s move on. Let’s talk about us. This is our favorite topic. Right. What’s our growth look like in past year? Yeah. And I’ll preface this, like I think as a company, as a culture, we like to be very humble. But I think this is our kind of one opportunity to shout out because we’re not actually doing any of the work,

right? It’s all the people around us who are working hard and doing some amazing things. And so this is our chance to give them some shoutouts. Numbers don’t lie. It’s not bragging if you have math to back it up, so. I’ll brag on other’s behalf. So what we’ve seen- I mean we grew a ton. We went into the year thinking, “Oh maybe we hire 10, 15 people. It’ll be a busy year.”

At the beginning of 2021, I think we had roughly 45 employees. We hired almost another 45, so we effectively doubled. And those numbers are continuing to go up. It was exciting. Again, as we said before, it was truly the year of the recruiter. Everybody saw huge increases.

The recruiting of recruiters was like unprecedented, something we’d never seen. And it was hard. I mean, when we were recruiting people, they had multiple offers. I’d like to say that every single person we tried to hire we got, but we didn’t. We had a few people turn us down, unfortunately. But the one thing I’m most proud of is the turnover we had. Again, in a market where recruiters had

just options everywhere and the money was jumping as much as it was, our turnover was 6%. We’ve always prided ourselves on that. We’re in an industry that turnover tends to be high. I’m not going to bad mouth our competition too much, but let’s face it like- c’mon.

They’re in their environments and again, our turnover is 6%. And again, you can do the math. I told you we have roughly 90 people. Again, the vast majority of those people went to actually work for our clients. It’s something we prefer they didn’t, but it’s also kind of one of the things in unique and interesting career paths is when we have people who do OnDemand recruiting, they have the opportunity to work for our clients

if it’s really a fit for both sides. And that’s where we lost people. So again, it’s always kind of a bittersweet thing. It’s something we’d prefer they didn’t, but we’re also super happy that that’s the route they go. Some other kind of fun facts- again, going into all this two years ago, 90% of our people were in Chicago.

And again, if you had told me, like, I would have just thought that was gonna be the direction we’re going to continue to go. I mean, that’s been the biggest change from all of this is just how national and frankly, even global, a lot of things have become. People can live anywhere. They can work anywhere.

And you know, we’ve taken advantage of it. Our client base basically went national overnight. The two biggest areas we recruit for in terms of recruiters and software engineers can work anywhere. And we followed that same pattern. I get asked this question a lot, like where do our people, where are they at?

And I was always guessing, but like before this call, I sat and counted. So two thirds of our employees are still in Chicago. So we’ve got roughly 60 people in Chicago. But then from there, they’re spread across a number of different states. And like I said, I thought I’d test you and just see if you could guess kind of which other, you know, how many other states do you think that people are in and which are the most common?

So we’ll start with which state do we have the most people in outside of Illinois? I mean, it’s gotta be Texas, right? Our real estate division. That’s a whole chunk right there. Correct. Yeah. We’ve got roughly six people there. That’s it. So good job. If I didn’t include that I was going to- like, I was going to guess either Ohio, Wisconsin or Missouri after that.

So Wisconsin was second. Our neighbors to the north and we were excited about that. I think it’s- it’s the suburbs, you know? Just a Northern suburb, they just have like cheese curds, a little more than than us. It’s funny. We have kind of some good natured ribbing with the football teams.

I know you’re not a Bears fan James, but unfortunately having 60 Chicago residents, I’d say probably half of those are Bears fans and then obviously tortured ones at that. But needless to say, the biggest win of our season was Robbie Gold making a field goal to beat the Packers.

That’s not even your kicker anymore, but he’s a permanent alumni. It’s pretty sad when you think about it but that was the highlight of the Bears. He’s also a Penn Stater. So there you go. I have my claim. Yeah. So one other trick question, which employee lives the furthest away? Not counting the Sourcewell team in Israel.

Uh…Marc Dobkin in Boise? It’s a good guess. So Marlee has spent the last six months- so again, not to go too much down the rabbit hole there, but Marlee was someone we were recruiting for a while and we just didn’t think it was going to work. She’s got a boyfriend that’s a professional hockey player in Paris playing in Paris.

And she thought her old company was going to let her work in Paris. They changed their minds and we stepped up and I told her she could spend the first eight months of her career in Paris and she’s done phenomenally. She actually just got promoted. So if you’re watching Marlee, shout out great job and fun fact. Another selling point on Hirewell.

Well if you out there, if you want to take a year where you travel or go somewhere else, totally fine. Have at it. Yeah and so again, so it’s a lot of other exciting things for the year. Looking at our total numbers and again, we executed over 1500 hires across 350 different companies. I know we’ve talked about it a bunch, but then Q4, we had the big announcement of taking outside investment for the first time from Prytek.

And I think that’ll be- we’re going to talk next about sort of trends for the future, but that’s what we’re excited about. It gave us some capital to grow, but more importantly, our investment in technology. I mean, when we look kind of forward to what we want to do in 2022, I’ll let you kind of go into the details on that but we’re excited about it.

Some very cool things happening. Yeah. So speaking of 2022 because I know you’re big on prediction. I’m more of a ‘what’s our vision’ because predictions end up being wrong most the time anyway. But where do you see us going? What’s kind of the roadmap you see for 2022?

I’ve been doing this entirely too long, so we’re not even going to timestamp it, but obviously it’s over 20 years since the Hirewell’s been around. 20 years and every year, the same feeling going into the holidays, right? Like you’re super busy going into kind of the holidays and then it quiets down and you’re just not sure what it’s going to be like coming out.

It’s almost like orbiting around the moon. What happens when you come back? Is it going to be busy or not? And in January, sometimes it’s a little slow. Last year was pretty busy so that was exciting. But in the past that, it can kind of take a couple weeks or even a month for things to really pick up.

But that has not been the case. January has been just firing on all cylinders for us. It’s been a lot happening and you can’t really say what’s going to happen going forward, but at least in the short term, there’s no sign of slowing things down. And two things that continue to heat up are the market for engineers and recruiters and there’s just a shortage.

I mean, salaries are going up. I know that’s one thing you’ve talked a lot about, but it’s just, it’s not going to be sustainable. Companies, you just can’t keep paying more and more. Like these huge tech companies have so much money, they’re driving up the salaries for both recruiters, as well as the engineers.

And that’s one thing that I think is going to be interesting to see going forward. Yeah. And I think that’ll continue to be my perspective. I mean, plugging my other show, Jeff Smith and I, The 10 Minute Talent Rant. What was the last episode titled? There’s not enough experienced hires go around.

A lot of things have to happen just because this is unsustainable when people can’t find enough recruiters or devs to get the work done. And it’s a combination of recruitment tech has got to get better so we don’t need as many recruiters per se. People have to be more open-minded about how they hire and how they kind of change their plans.

They have to be better at like training people, whether it’s junior people or whether it’s hiring veterans or whatnot. I think it’s going to have to happen this year and not everyone’s- you know, it’s tough to do. Change is hard, but I think we’re going to start to see it, that there’s gotta be ways that people can be more efficient because at some point, not everyone can-

we’re going to hit a point where no one can afford to hire a recruiter because Facebook’s going to grab them all. But I guess continuing on the plug, that is what we’re rolling out this year as the Sourcewell product. So that’s what I’m super excited about, with the acquisition we made with the assistance from Prytek. If you’re a recruiter out there and you’re probably spending half your day on LinkedIn and to find 20, 40, 50 good candidates, you probably scroll through that stupid site again and again and again.

And the whole promise of AI and machine learning is to be able to take those mundane repeatable tasks, make them smarter over time, make them do the work for you, which is exactly what we’re doing with Sourcewell. And just kind of testing things internally, my colleague Zac, also another plug for his show ‘Tech Leaders Hiring Well’ like he can attest the fact that he’s been using it.

Saves him hours of his day, just because when he actually gets results out of that thing, they’re actually people he wants to contact. So it’s automating the entire sourcing function. So that’s what we’re doing to kind of combat the problem. We’re rolling this out later this quarter, we’re hoping to have our first kind of initial clients for it.

And if you’re interested, happy to talk with you more about it. But it’s completely designed to- all the search algorithms and all the sourcing technology I’ve seen to date are frankly garbage. They don’t really, haven’t really been refined, but that’s entirely what we’re focused on is making those results super relevant and that in turn should make it

so your existing recruiters can actually just get more done, not to put ourselves out of business. I don’t think we’ll ever be close to that, but getting to a point where it’s just a little more sustainable. Everyone is out there doing this job, less headaches, less time spent sourcing, more just doing the real work.

Yup, agreed. Yeah. It’s exciting. We’re excited to see what happens and a lot in store and we’re anxious to see how the future unfolds. Alright, knocked that out once again, another great quarterly show. Thanks everyone out there for tuning into the Talent Insights podcast, part of the Talent Insights series, which is always available for replay on talentinsights.hirewell.com as well as YouTube, Apple podcast, Google podcast, Spotify and Amazon.

Matt, thanks again. Everyone out there, we’ll see you soon. Thanks James.

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