All right, everybody. Welcome to the Talent Insights Podcast, special edition, Hirewell’s Data Insights, Hiring Trends for Q1 2023. Which of course, is really Q4 2022 since we’re talking about data from the past brought to you by Hirewell and Sourcewell. I’d like to thank my co-host for joining me once again, my sidekick.
Should I start calling you that as your official title? Sure. Hirewell, CEO Matt Massucci. Hi James, thanks for having me. You’re welcome. Yeah, we’re a little late on putting this one together, but I think actually worked out better in some ways because I think having some of the January data actually put a little more context around what’s happening.
A little bit late, because honestly we kind of forgot. We were having so much fun in January that time flies. But, it’s been a moment, I guess, for everyone in the recruiting industry. The last two quarters have been not what we are all hoping for. But I think we can go down the data, not all of it’s good. We’ll be very upfront about where we’re doing well, where we’re not.
But I do think that the kind of the turn that we’ve seen in January has definitely put some sunshines on horizon, potentially. Compared to where we could have been, had things kind of stayed the way they were. So, Matt I’ll let you kick this off though. I know we got about four or five things you want to kind of cover in this one, but why don’t you take the first crack here?
Yeah, yeah. You know, as we talked a couple months back, hiring officially peaked in Q2 of 2022. I think we all sort of felt it shortly after the fact, but it became more and more clear as time went on. And you know-
And I think the challenge is as the year went on, like our business in hiring in general tends to be slow in Q4 now.
Prior year it wasn’t, it was actually quite a busy one, so it wasn’t really sure to expect, but I think, those of us at Hirewell had a bad feeling that Q4 was going to be a slowdown. Projects were ending. It was just really, really easy. Layoffs were ramping up and it was really, really easy for companies just to punt things into January or Q1 or whatever.
And so we saw it. And sure enough, that’s what the number showed. So like our hiring volume that we saw in Q4, it dropped about 17% from Q3. Again, not that shocking of a quarter over quarter drop, because Q3 is traditionally a busy one. But then when you look at year over year, Q4 did drop a little bit under 5% from 2021.
So, you know, it wasn’t a massive drop year over year. But we hadn’t seen an annual drop in several years. So, you know, it was unex-
or it was not unexpected, but still pretty painful for anybody going through it. Whether you were hiring, whether you were in recruiting or you’re looking for a job. It’s just kind of a slow time.
Yeah. And then the next thing I kind of think I want to discuss here going through it is, we always talk about these shows. HR hiring, recruiter hiring specifically, and hiring, kind of tech hiring, software engineers. Recruiter hires, I mean, they dropped pretty significantly from the first half of the year or the second half of the year.
The second half of the year, honestly, was a quarter of what it was the first half. So it just kind of fell off a cliff. Almost to the point we’re like pulling data on average salaries, like it’s kind of irrelevant because the sample size shrank so much that you can’t really make any good like determinations out of it.
And that being said, that the positions that, you know, HR volume, while it did dip overall, we did see more HR strategy and leadership roles. Because I think that companies still had a push to, when they had major initiatives going on, they still utilized us and they still made those moves for kind of the key people setting the strategy.
They just didn’t need as many lower level, mid-level people kind of executing on things, whether it was HR or talent acquisition, which isn’t totally expected. So, not what people in our industry, working internally, wanted to hear, wanted to experience, wanted to go through, but just the reality of kind of where things were in the second half of last year.
Yeah, yeah. The booming, boom in hiring recruiters, again, we saw that was just absolutely insane for 2021. Kind of first probably four months of 2022. And then it just, it fell off a cliff. And you know, it’s disappointing. It’s frustrating to see. Unfortunately, it was also not unexpected. And you know it’ll-
it will come back. It just, you know-
But I think the industry’s going to continue to change, right? Like the-
How far it’s swung from 2019 to pretty much every year there’s been like some sort of a major switch in the market. 2019 was busy. 2020 fell off a cliff. 2021 was a boom and 2022 it fell off a cliff again. And so, you know, you and Jeff have ranted about it at lengths, we don’t need to go on. But hiring and firing recruiters is not the answer. That’s the only thing I know for sure. And we’re working on solutions and plans to kind of get to a better spot, but you know, just-
kind of crazy market. I was just going to say, I do think it’s weird. I was talking about this on LinkedIn a little bit today. Like you and I have been in this industry long enough to see like how the pendulum swings for recruiters and it’s a very volatile profession. Which people don’t realize cause it happens in five or years between.
But the fact that we saw a boom, a drop, a boom, a drop. All like, kind of four swings inside of like three years is just like bonkers. Like usually that’s what happens over 10 years, not over three, so anyway. Yeah. No. But you know, that’s kind of a good segue into the next thing. We always talk about, I think HR/recruiting and then software engineering. Two great barometers for the market.
It’s two of our biggest areas and it also really speaks to what’s happening in the world and for those who may not know Hirewell has placed software engineers for 20 plus years. On average we place, 4 to 500 of them a year.
So some big numbers. Not to say that we own the market. But I think the size and scope we do, we have some pretty meaningful trends there. Again, interesting the peak for software engineers in 2022 was Q1. That Q4 was fairly busy, but it did drop 25% from that peak.
But again, it was a steady sort of decrease as the year went on. So, Q2 to Q3, Q3 to Q4 kind of dipped maybe 5ish percent per quarter, so not huge drops. And then interestingly so the salaries for software engineers, like they did peak in Q1.
Our average salary for software engineering place was 139,000. In Q2 that peaked at 150,000. It actually dropped back down to 139,000 for the last two quarters. So it’s kind of crazy. The same exact number for three out of four quarters in the year. And, you know, again, like that’s-
it’s going to just, it’s going to be steady, I think. Yeah. I think the only difference I think with this is that there’s-
And this might lead us into kind of the next half. Want to talk about the January jobs report, which is something I want to hit on, is just that it’s when I do talk to companies out there hiring, they ask me what’s happening in the tech market and is it, I had a conversation say, is it easier to find people now?
Like, no. Not really. You’re just not competing against Amazon and Facebook and all these places that would throw like these crazy comp packages at people. So we talk about kind of the salary numbers, but there’s a difference between a software engineer making 139k but getting like, half million dollars and equity versus, because they’re getting out from one of the big tech firms, versus not. But anyways. January Jobs report. Everyone’s probably seen this by now, but we’re down to 3.4% unemployment, which is the lowest since 1969. There were 517,000 jobs added in January, which was, I forgot the expectation, was like 200K or something like that. Something like nuts. Yeah. So a lot of people really hate this number because they think it’s misleading. I’m not really sure that it is. Because there’s-
Obviously when we’re in a bubble, you and I, and everyone else probably listening to this, we’re office dorks as I call us. Like we’re wrapped up in tech circles. We work in very kind of office, white collar industries, software engineers, marketers, salespeople, HR operations, F and A, you know, that type of thing.
But we’re a small part of the economy and big tech is only, technology as a sector, is only 3% of the economy. But breaking down that number, hospitality jobs, 128,000 jobs, in January. The monthly average last year was 89,000. So yes, that was higher, that exceeded. But even if you look at everything that was like professional business services, those 82,000 jobs, that’s where all of our circles would kind of fall into. The average for last year on a monthly basis, 63,000.
So still almost 20,000 more jobs added compared to the average from 2022. So I think it’s important to realize that these jobs are still being added. They’re just not happening within companies themselves that are in the tech industry. If you ask me like, who’s actually hiring right now, it’s literally everybody except for tech.
Healthcare needs software developers. So does the financial industry. So does, I was telling a friend like it’s basically like you might get laid off from Amazon, but then you end up working at Proctor and Gamble. Maybe that’s not the career path you wanted, but these are real jobs.
And if you have these skillsets, like the demand out there is still high, there’s still being jobs added in spite of the fact there’s so many layoffs that are happening. They’re just so high profile. Yeah, exactly. And I think, you hit the nail in the head, right? The layoffs in tech and kind of the, if you want to call it, the recession that’s happened in tech is painful and right.
Like, again, it’s a big part of our business. We have a lot of friends that work there. We have a lot of clients, so it hurts. But, as you said, in the grand scheme of things, it’s a pretty small subset. And I think it still speaks to something we’ve talked about a bunch on this. Like the labor participation rate is just too low, so, you know what I mean? 3.4% unemployment is not sustainable. Like the jobs that we’re really lacking, it is some of these areas, whether it be services or leisure and hospitality. Like, where like you talk to friends that are in the,
that own a restaurant or work in the restaurant business. They just can’t get enough staff to work there. And hopefully that’s starting to change because those are obviously important areas and kind of the
a lot of the, like blood of our country. So it’s nice to see like things picking up there and you know
And that will be, not to go too,
nobody wants to hear us talk too much about economics, but like the whole concept of, 70% of our economy is the consumer, right? So if the consumer’s working, that should be what keeps our country out of recession. So, you know, like that’s
people working’s a good thing. Yeah. If you, I don’t know if I,
complete side tangent. If I told you like my latest thing to nerd out on is the economics explain channel on YouTube.
So probably five videos a week. So yeah, if you’re listening, you really want to learn about economics, that’s what I’d recommend, anyways. Yeah, understood. Anyways, last thing we want to touch on is a little bit forward-looking and I kind of jokingly started talking here, is that I’m glad we waited till we had some January data.
And I think I promised two shows ago we were finally going to have some like, sales numbers that can give us more of a forward-looking indicator. It took us a little while to get our new data package set up, it was finally working for us. I did have one stat that I had to triple check like five times, because I didn’t believe it, when I was looking at it. I think the things that are relevant to everyone out there, and again, we’re talking about our numbers, I realize not everyone’s going to care. It’s like, I don’t really know, care. what Hirewell’s doing, but it is a subset and it’s what we have to work on based of what like the industry demand is.
People come to recruiting firms like Hirewell to hire, not for every hire, but for the urgent stuff. So it is still an indicator of, kind of where things are potentially headed. Our new logo clients for Q4 2021, back when things were booming versus our new logo clients for Q4 2022, just this past quarter when things weren’t identical.
We had the exact same number of net new clients between those two quarters, which actually blew my mind. Not the case for job orders though. That’s where things dropped off. So from Q4 2021 versus Q4 2022, we like comparing Q4 to Q4 since it’s a wonky quarter, about a 40% drop.
So I won’t lie to you, like things definitely dried up between those two quarters. But you also have to take with a grain of salt though, because when you go back to the end of 21, into 2022. That Q1 of 2022, the biggest boom quarter, it was only 14% above what the previous, that Q4 was, so.
You could say the peak or the bubble really was not just last January, February, March, but the months kind of preceding into that. Which kind of accounts for that, but that being said too, the last things I’ll say getting into January, what’s happening right now.
Our job orders went up 119% from December. They were up 52% from November. They were up 33% from October. That seems like it’s declining because December or November kind of slow months, and January, in general. But October is usually a busy month. And we’re up 33% from there. It’s the highest they were since the previous May.
So going all the way back to when things were still hot, we’re getting close to those numbers. Not as high as last January, it was about 19% below that. No, we’re not all the way back in terms of total demand, but compared to honestly what things were looking like all throughout Q4, like it’s a pretty big rebound.
And if that continues, I think we’re going to be in, we Hirewell, but also the rest of the kind of hiring industry will be in good shape. Yeah. No, I agree completely. I will give you a quick shout out, being our CRO and heavy emphasis on our BD efforts. Truthfully, a year ago driving new business wasn’t top of our mind because we had so many clients hiring that it was just a matter of servicing the ones we had.
Clearly as things start to slow down, we realized we need to take a little bit more of a proactive approach, which has been an exciting thing to see. So that’s been great. But, I think also for context, while we’re not the biggest, our mix of services and skills, like we touch just about every industry, just about every function within a company.
So, we recently launched a supply chain practice. Obviously we do a lot within tech, but covering sort of, all aspects of cross-functional hiring of companies, both from the executive level down to mid-level hiring. Like, we’ve got a good view of it. I mean, last year across the combined Hirewell group, we worked with roughly 500 companies helping hire probably 3000 people. So, we’ve got a nice window. Again, we’re not-
not the biggest, but I think the stats we see are real. And so we’re excited to share and cautiously optimistic that despite what’s happening in the world, things are trending in the right direction. Yeah. Well, cool. We won’t take up too much more of your time out there listening to us rattle off stats and statistics and whatnot.
We know it’s always the most interesting thing, but TLDR; things are slowly getting better and I’m happy with where things are trending. Can’t be boom years all the time, but I think we’re going to be in a good space, so. Yep. Thanks again 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 as always. Always a pleasure chatting with you on these. Thanks James, see you sometime the next two to four months for one of these-
whenever we finally get back to it again. Yeah, it’s a regular schedule we have. Everyone out there, we’ll see you soon. Bye.