January 11, 2024

Hirewell Data Insights: Hiring Trends Q1 2024

Hosts:

Episode Highlights

Retained Business Increased in Q4

I
2:04

Interim Talent Was Unchanged Between 2022 and 2023

I
3:22

Sales Hiring Up 32% Q3 to Q4 2023

I
4:57

Rise of Interim Talent Solutions in 2024

I
11:32

Subscribe to the Talent Insights podcast on Apple Podcasts, Google Podcasts, (recommended for Android users), Amazon Music, or Spotify. Watch us on YouTube—and don’t forget to rate us!

New year. New hiring market. Hopefully.

2023 was a year a lot of recruiters are happy to turn the page on. But it wasn’t all bad. Hirewell did see some growth areas and a consistently strong demand for interim talent. 

Matt Massucci and James Hornick break down the previous quarter and look what what’s happening to start 2024 with “Hirewell Data Insights: Hiring Trends Q4 2023″

Replays will be available on Hirewell’s Youtube channel. Audio-only version will be available on the Talent Insights podcast on Apple, Google, Amazon and Spotify.


Subscribe to those channels here: https://linktr.ee/jameshornick

Episode Transcript

All right, everybody. Welcome to the Talent Insights podcast, special edition, Hirewell Data Insights, Hiring Trends for Q1, 2024, where we really talk about what happened in Q4, 2023 and all of last year, really. Brought to you by Hirewell and Rainmakers once again, joined by our fearless leader, CEO, Matt Massucci.

Hey, James, happy not so New Year. How you doing? I’m doing good. It’s actually my second podcast of the day. So I’m warmed up. So yeah, we wanted to, we do these once a quarter. We wanted to get back to it and this one, we want to recap kind of on what happened last year, especially compared to kind of the previous year and previous quarter.

And, you know, have some insights in terms of where things might be headed. I’m not a big predictions guy, but we can look at pipeline and some forward looking things and try to make some-

try to get an idea. But Matt, why don’t you give us a kind of a, how have things been looking? Why don’t you give us a quick overview of the past year?

Yeah, it was an interesting one. I’ve been doing this a really long time. I know you’ve done it for a good amount of time, but I do have you beat there. And, it’s definitely a year like we have not seen before. Going into 23, you know, we knew there would be some challenges. It was definitely a little bit more challenging than expected.

Interestingly enough, it kind of progressively slowed down as the year went on. And, you know, I think if anybody’s religiously watching these things and saw like, you know, each of the quarter, you know, I think I called it about in every quarter and, you know, was not correct because it kind of, you know, softened as the year went on.

So, you know, and again, I think that there were-

some of it was seasonal, right? Like, you know, our summer was slow. You know, the holidays were slow and it just kind of accentuated everything that’s happened. So that’s kind of it in a nutshell. Yeah, so, hiring volume, total year to year down roughly 25%.

Yeah, it was kind of across the board. Some areas were up, some were down. We’ll kind of get to that, but, kind of across the board, the volume was down and we’ll get to those numbers. But yeah, I mean, it was, you know, it just straight around 25% of the volume we saw year over year.

Yeah, I’ll talk about, so one thing, retainers is one thing I can mention. So we look at retain business as a measure of no bullshit, we actually need you business. So companies that actually need get something done quickly, we’ve pushed to get all of our business retained. Obviously, in soft markets, you have to take things that aren’t necessarily ideal, but that actually increased from Q3 to Q4.

So from like 73% to 80% of our business kind of went that route, which is a good sign. There were more companies that seriously needed to hire and make concerted hiring efforts and make things happen in a specific timeframe, which is a good thing to see. Yeah, I think the context there is, I mean, anybody in recruiting, or TA knows it’s been a tough year.

Companies have cut deep. They paused a lot sort of early in the year. They, you know, gutted their internal TA teams. And so I think it got to the point where if they were kind of going on their own, you know, they started to struggle and, you know, and I think just that the sheer volume of sort of handling it and doing it, I guess it’s still hard to find good people. I know we’re going to get into the overall market trends.

I mean, unemployment is still low and so companies just, you know, they’re, you know, they, I think they recognize when they need help and need to call in some experts. And so that’s, you know, it was a positive trend from Q4.

Yeah. And I think, kind of into the next topic, the other trend we saw in our interim talent solutions. So just as a reminder, we do it kind of across all of our functional areas, but really the biggest three are interim HR in recruiting talent, interim Tech Talent, and interim kind of Digital Creative Marketing talent.

And so that was flat year over year. You know, and I think that was sort of an interesting thing. It’s not that it was easy there, but it was a bit more resilient kind of than other parts. And, you know, there’s definitely a lot of churn. I think we had a lot of, you know, a lot of projects end, but then a lot start and as the year went on and it’s been sort of a pretty strong highlight.

We’ve even seen a dip into January where usually there’s an attrition of projects ending at year end. We had a lot more carrying to do. Yeah, and that’s that’s the maybe the first thing that has me kind of hopeful about the next year because we’re talking about contractors, freelancers, pay rolling, various people on temporary projects.

It was the exact same in a down year versus a year that was actually pretty good. So, you know, in the total deal volume, we have our total volume of like, placements make it down, you know, 25% but the actual number of like, people out there on contract engagements is the same. That’s typically what comes back first when things kind of come back, not saying it’s going to happen, but the fact that we’ve been able to maintain that was, you know, one of the highlights of the year, I guess.

Yeah, for sure. And not to spoil some of our predictions or trends we’re seeing in 2024, but yeah, I think that is hopefully a sign of where the world’s going. I think the other bright spot was interesting, our sales hiring across the organization. So year over year, it was down a couple percent, I think roughly 3% from 22 to 23.

But that’s where we saw the biggest trend in Q4 and our sales hiring practice is really, you know, I think they’re up 32% from Q3 to Q4, which was the only practice we had that actually grew going into kind of through Q4. Yeah, it was a huge pivot for us. Tech and SaaS sales hiring, back in the day, was like the only thing we did, like, in the sales space.

I would not say the only, but that was like 99%. You know, now it’s still a chunk, but, that’s come back. We’ve been more well rounded and kind of working in sales, kind of in all areas. So that kind of kept us going through it. But then kind of seeing the tech and SaaS, which, as we all know, is kind of a foundation, like the fundamental part of so many recruiting firms are based on whether or not they actually work in tech positions or not. You know, it gives me also hope too, that when you see tech firms hiring salespeople, again, people are going to grow. People are going to have to build out things further, so. Yeah. And with that we did the acquisition of a collective search or the collective, you know, bringing over Tom and Jen, they’re based in the West coast heavily, B/C, you know, series B, series C, backdoor organizations andand they really seen a nice uptick as well, so that was exciting to see.

And then, kind of the last sort of interesting one, our F& A practice actually grew, you know, by 20% year over year, which was a very exciting thing to see. And, you know, I knew it was positive, but it was still even better than I expected. It is our smallest practice area, but it sort of speaks to the challenge of finding accountants.

You know, no matter what, you need people to keep the books. You need people to, you know, kind of run the numbers. So it’s something that, you know, it’s going to have less of the highs and less of the lows. Yeah. Do do we want to talk about the other areas or we just want to let that go by the wayside?

Obviously, we do other things. We do tech, we do HR, we do marketing, and you know, all were down. I mean, HR, our HR practice was interesting. That was a pretty heavy shift to that interim HR, whether it be providing interim recruiters, providing interim HR, people even, you know, dip their toes doing HR advisory work for companies that oftentimes don’t have the necessary resources internally.

And it’s something we’ve been able to provide for clients to that extent. So that’s been good, you know, but then tech and marketing, that was the softest. And I think that the simple reason there is that business is heavily, you know, influenced by, kind of early mid staged tech companies. And that’s the areas that was hit the hardest.

And again, our group there has done a nice job pivoting to kind of more traditional industries. But the fact is when you have kind of a huge subset of the market, I think, I don’t have the exact numbers might pull it at some point in time, but we just saw a huge number of clients just stop hiring kind of for the full year.

And, you know, it’s a challenge, but I think it’s been. Nice to see sort of the team, while it’s been hard, I mean, they’ve been resilient and they’ve been able to kind of leverage relationships and networks to kind of expand into new areas. And that’s been, you know, it’s one area that we’ve seen some positive.

Yeah. Two more things I want to hit on before we kind of call this one off. So trends, what we’re doing, what we’re focusing on, just so everyone’s aware, then also we want to kind of highlight, you know, kind of macro level what’s happening, like in the job market. So, but trends, what’s our focus?

What do you think people need to know about us and kind of how we’re attacking this market? I would love to say we had some playbook that was different than everybody else, but it sort of speaks to where it’s an activity for our clients. I mean, it’s investing in sales and investing in growth.

I don’t need to tell you else, being our Chief Growth Officer, but we grew into being a pretty 110 plus person organization without really much for dedicated sales force. But as we kind of move into more complex solutions, we recognize the concept of just doing, you know, having our kind of recruiters drive business is, you know, it’s been extremely useful.

We’ll continue to do that way. But, you know, investing in growth and hiring people to do that is a huge focus. So, you know, I’ll let you kind of talk about some of the details there. Yeah, we, one thing, and I’m going to, I’m going to throw us off our notes here because I had this like somewhere else there.

We’ve seen a pretty big resurgence ourselves in terms of our pipeline. So I don’t like to brag about pipelines because as you all know, like, in terms that comes real, but Q4 over Q3, we saw about a 35% increase the amount of like things we have going on, which is huge. If that pays off, I’m going to be super happy about it.

But you know, not to turn this into a LinkedIn commentary on how to do sales. You can, you know, everyone’s well aware that blasting emails and LinkedIn messages just annoys the shit out of everyone. It’s not really going to work. I think as you mentioned to me previously, just the amount of AI based solutions, which just helps people pump out spam faster is not the way to get it done.

But the way we’ve been able to build our pipeline, it’s heavily about personal networks. People who know people, events, being able to map previous relationships, reconnecting with old contacts. Teaching non salespeople, the people in the organization aren’t really tasked with this, how to maximize relationships, you know, stuff that’s second nature to salespeople, but not everyone else, just, you know, making sure that they kind of understand like how to just get the most out of every single call.

So it’s been productive, very much kind of going back to old school and making sure you’re kind of like leveraging and actually getting to know people and meeting people in person, that type of stuff. It’s been huge. And the people that we brought on board, very much come from that kind of mindset as opposed to just trying to do LinkedIn based gimmicky sales tricks. So, yeah, sorry, a little technical difficulty with my camera there, but I’m back. Yeah, no. And I think, one of the things you touched on that I think is-

it’s kind of going back to basics, but, I know something you’ve done a lot for us is really just investing in the training and the L&D component because for those of us have done this a long time, a lot of this comes second nature. But if you haven’t, or you’re not in an office working around people who do these things and can teach on the fly, you have to work hard to kind of, to do these things, but you know, it’s great career advice for anybody, whatever industry you’re in. It’s, you know, layoffs are out there, they’re going to happen. And the best way to make yourself sort of indispensable as an organization to be able to continually, drive revenue, drive process, and kind of make the organization successful at all costs. Then I think the other thing that we talked a lot about the trend in interim talent, and I just, I don’t think that’s going to change.

As you summed up pretty well, like this can be called a million different things. It can be called temps, it can be called gig workers, freelancers. You know, it can be more kind of solution based work. And, you know, if you think about what we do, we’re a talent solutions provider that can be searched, but then, you know, we’ve talked about our on demand recruiting practice, but, you know, the concept is how do we provide embedded recruiters to our clients to help them, whether it be on a project or sort of indefinitely, or lift out the whole hiring function.

We’ve done it for years, but, you know, it’s something that we’re starting to see companies really investigate more because they’ve cut and now they recognize, Hey, we need a solution for this. And it’s got to be somewhere in between hiring a huge team to do this or paying exorbitant fees for everything.

And so that’s something we see a bunch of. You know, again, it’s those three areas I talked about that are going to be the biggest, but providing interim technical talent, interim HR, or recruiters, or as well as the interim kind of marketing creative. You know, there’ve been things we’ve already seen and done, but you know, I see that being kind of a huge trend in 2024.

Yeah. Let’s go up into kind of general broad market stuff. Pulled some data from the jolts reports and some other things we’ve seen out there. What’s your take? What do you think’s happening right now? I am not a predictions guy like yourself.

I do think, you know, I think 2024 is going to be interesting. I think, I almost in some ways, I think it may be kind of an opposite of what 2023 was where things slowly got a little bit worse. I think it’s going to be the opposite. I think it’s going to slowly get a little bit better. But I think it’s going to be hard.

And I think there’s going to be more and more announcements of things happening. You and Jeff, when you’ve done your content, you talk about the haves and have nots, but I think, you know, the fact is that the gap there’s going to get wider. Look at these kind of these big companies that are doing some layoffs, but, you know, showing record profits, big tech companies.

And so, you know, there’s going to be a lot there. I think, you know, a lot of these companies have been reliant on, you know, zero interest rate dollars, and those are drying up and they’re not coming back. So they’re, it’s going to be painful. I think you’re going to see some interesting things play out where just, you know, I profile things go away or could do some major, major cuts or fire sales to kind of keep the lights on.

So I think there’s some challenges there. And, you know, in cash is going to be king. So, you know, we’re constantly seeing companies trying to push out payment terms and doing different things. And, you know, I get it. I mean, that’s just the world we’re in, but like, you know, money’s expensive when it was free, who cares if they take an extra 30 days to pay when, you know, that cost of capital is 5, 8, 12%, you know, it can get scary, so. And again, I think it will result in more companies shutting their doors.

In that there is 2023 was one of the biggest year in 10, 12 years from S&P Global Intelligence, I think over 600 companies went bankrupt in a year, which was the highest since like 2011. Yeah. And that’s the thing as I was, cause I was reading about this and a lot of it’s the zombie company concept, you know, like we had three or four years of a lot of companies being completely propped up with, you know, government loans, PPP loans and whatnot.

And it didn’t force people to make decisions and a lot of companies were completely relying on it, couldn’t like operate a business otherwise. And it just, it kicked the can down the road for a lot of places. And a lot of that just ended up coming to a hilt in 2023 when they weren’t able to make it anymore.

So, you know, it’s just, inefficiencies can only be propped up by government bailouts for so long. And again, I’m not criticizing anyone who took PPP loans or anyone who received, you know, their stimmy checks back in 2020, but it just kind of the reality hits when all of a sudden, like, you have to kind of find a way to making things work without it, so.

I want to also get into the jolts. So thee actual job reports and whatnot. December 2023 actually wasn’t that exciting. So, non farm payrolls. This was last Friday it came out, it’s early January about the previous month. Increased to 216,000, which exceeded Wall Street expectations by a little bit.

But it was like again, nothing crazy. There is one, I think key thing we want to talk about with this, about the government and health care breakdown, of this. So if you want to- this is your stump point that I don’t want to take away from this. So I think it’s, I mean, for a while, like, you know, we talk about the resiliency of the job market, but you know, then you can kind of pick, you know, peel back the layers a little bit.

And I wish I had a little bit more time, I would have pulled it for the full year, maybe we’ll push that out in a couple of weeks, but just for December, you know, you talk about 216,000 new jobs, but almost half of those were in healthcare and government. And, you know, it’s not sustainable, right?

These are things that, you know, government is you know, purely just a cost center. And then healthcare is basically as well, they’re not adding to GDP, they’re not adding growth. Whether it be, you know, the government cost, which obviously tacked onto the deficit. But then healthcare is even scarier.

Because, you know, like that is some of the entitlements that are just continuing to grow. And, you know, again, it’s- not to make it political, but I think it’s going to become a little scary. Those are the jobs that we’re relying on because they’re not really adding to our establishment.

Yeah. Looking at the sectors that we care about, like professional business services, which is our sweet spot, for what we do as a firm. But, little change, it was like increase of 13,000.

But if you actually break that down, kind of the trends further, the professional, scientific, and technical services trended upward at 25,000. That was the industry average of, for the past year, 2023, was 22,000 jobs. So that’s professional, scientific, tech services, 22,000 jobs a month increase, but that’s half of what it was in 2022.

So, while jobs came back, it wasn’t coming back or growing any kind of rate, you know, kind of in our circles, which I think is really what kind of causes a lot of the issues that we’re seeing as recruiters in those spaces. And one thing I want to throw out there too kind of already here or there, but temporary help services continue to downward trend. So I think that peaked in March 2022, but about minus 33,000.

But, anyways, unemployment rate unchanged at 3.7%. Unemployment persons unchanged at 6.3 million. Labor force participation rate, which is my least favorite thing to talk about, 62.5%. Highest ever is 65.5%, which in the year 2000, lowest ever was 58.1%. Sometime in the 1950s, wonder why that was, because people didn’t. Not everyone worked back in those days. Any last minute thoughts? No, I mean, I think it’s, and I know people, a lot of people’s eyes probably glaze over and talk with numbers, but the the devil’s in the details with those, and I do think that’s going to be important to see where, you know, it’s for people in a lot of areas it feels bad.

There’s a lot of talk. Are we in a recession? Are we not in a recession? And the numbers by the pure form, we’re not, right? We’re actually, you know, the GDP grew like pretty significantly, but I think, some of it is propped up by some unsustainable things. But at the same time, like the unemployment rate is low, like there’s, you know, there’s not a lot of people at work.

And so, you know, I do see things, you know, there’s a lot of uncertainty and that causes companies to kind of push back or kind of push out hiring or kind of projects or initiatives. But I think that will, that’ll start to ease it. And I think it, you know, everybody talks about interest rates, but that’s going to be a fact.

I think, as those start to drop a bit, I think it will just kind of loosen things up a bit. And I think some of the companies that are struggling with some sort of, you know, things being determined there and kind of the things playing out, I think that’ll start to open things up and that’s why I think things will kind of get better as the year goes on.

All right. We’ll call it a wrap for this quarter. Thanks again for everyone for tuning in 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 Podcasts, Google Podcasts, Spotify, and Amazon.

Matt, great seeing you as always. Thanks again for everyone out there for tuning in. We will see you soon.

More from Talent Insights

Episode 43
In this week’s episode, Dan and Louie dive into the heat of summer sports by discussing the NHL and NBA Finals.  Both are...

Episode 6
Episode 6 of Between Two Hires (The Subtle Art of Not F#*cking Up Your Team) is here! In this episode, Tom Wilkinson is...

Episode 40
In this episode of Recruiting Reality, Liz and Shania delve into the intriguing realm of love languages within the workplace. With insightful discussions...

Episode 90
The 10 Minute Talent Rant, Episode 90 “Gen Z’s 12% Unemployment, Explained” It came as a shock to pretty much everyone that the...

Episode 1
In the inaugural episode of the Beyond the Offer podcast, hosts Bill Gates and Rosanna Snediker discuss the landscape of talent acquisition and...

Episode 13
With a little inspiration from TikTok, Ryan and Emily are discussing the benefits of companies providing candidates with detailed descriptions of what to...

Our Shows

Our Latest Blog