All right everybody, welcome to the talent insights podcast, special edition. Call this the Hirewell data insights, hiring trends for Q2 2022. Which if you’ve tuned in often we’re actually talking about Q1, because this is all previous data. We’re not predicting the future. Anyways, brought to you by Hirewell and Sourcewell. And joining me as always our fearless leader. Hirewell CEO, Matt Massucci. Hi, James, thanks for having me. You always get so- you always sound so excited when we start this. I mean, I keep waiting for some sort of a joke and they didn’t come this time. So I was- you left me hanging there. So you put this together and what I thought was interesting, we actually had some- the trends
changed a little bit. I honestly felt like it lasts like two shows I’m like, oh, I gotta- it’s the same thing over and over again. It’s going to get boring really quick. But we did notice a few things potentially taper off. But things are still looking positive, but I don’t know. Why don’t you maybe lead us off here with like what the hiring activity looks like now versus a year ago and from maybe at mid point last year.
Sure. Yeah. I mean, I think for anybody who hasn’t seen every single one of these that we’ve done, that the trend has been similar, right? Where we’re busy, hiring is kind of through the roof. There’s really no, no, no signs of things slowing. And again, when you look at a high level, Q1 was extremely busy, right.
It was as busy as we’ve seen it frankly ever, but for sure in the last 10 plus years. And we saw it across the board, right. So we saw almost 67% increase from Q1 of 2021. We broke it out by our practice line or functional area. We saw HR was up 211%. Tech was up 90%. F&A was up 250%. Marketing was up almost three times where it was a year ago.
And then sales was up 92% as well. So it was definitely big numbers, kind of hiring was kind of full tilt across the board and it really felt that way because from really kind of the first week of January through the end of the quarter, it was just, it was kind of going like gangbusters.
One thing I thought that was interesting was the uptick in like marketing and HR. It was kind of being the biggest areas. So I think you mentioned earlier, marketing was up about 300% and HR was up about 211%. Which that was kind of cool. And I think that- and that’s not to say anything else tapered off or anything else went down, but just like kind of relative, like how marketing and like, I always think of the hiring cycles in terms of when companies need-
they get their funding, they make their first round and they just start making moves. It always sales and tech are kind of the two things. And then historically everything else like marketing, HR, operations, like some of these other areas kind of lag behind a bit, which I think is what we’re seeing. So it’s still a positive kind of maneuver, but like other, it seems like we’ve gotten to the point where a lot of these companies that have been growing for a while are starting to grow some of the other parts of the organization aside from tech and sales, maybe at a higher rate at this point.
So. Yeah, absolutely. I mean as you said, it’s not like tech or sales have slowed down, but they just haven’t been increasing at the same rate. And again, when you look at it a year ago, there wasn’t- things were just starting to heat up within like kind of companies hiring within their HR department or their marketing departments.
And so as we looked at it progress over time and you know, it’s pretty crazy the year over year change. One of the things I wanted to talk about, I try to put the numbers in context and again, comparing Q1 from 2021 to this past quarter, it doesn’t really do justice. So then I started to look alright, how does it compare to Q4, but Q4 is never a great benchmark because of just sort of the fact that things tend to slow down towards the end of the year. So kind of looking at kind of compared to Q3, because Q3 is not only our busiest quarter traditionally, but you know, Q3 of 2021 was our biggest busiest quarter of all time in numbers were kind of across the board
up from Q1 of 2022 to Q3 of 2021. Yeah. Yeah. So I know I kind of stole your line and that was something you were- yeah it’s no worries. Yeah. Let’s move right along. Another big trend. This is another thing that was very different. Which I guess, leading this off is that contract, there’s a pretty big decrease in the amount of contract hiring we saw in Q1 of this year versus Q1 of last year.
And that’s like a fair comparable because like beginning of the year budgets get closed. That’s kind of where you want to kind of compare two quarters after quarter. But you mentioned, so decrease of activity from 46% and this is like our contract hiring as a percentage of all hiring that we’re doing was around 46% versus 19% this past year.
What do you think I guess is driving that? Or what caused the shift and why things are more FTE focused over contract compared to a year ago at this time? Yeah, I mean, I think that’s one that- I guess in hindsight it makes perfect sense, but I was surprised at how much of a stark difference it was.
But again, if you look at where we were a year ago, we’re still coming out of a recessionary time, a lot of uncertainty. So a lot of companies were going with bringing on interim talent or contract resources. And there were enough good people on the sidelines a year ago that you could hire people and bring them on as contractors. But you fast forward a year and the reason it drops
so massively again, it’s not for lack of trying and companies still are looking to bring on contractors or contingent labor whenever possible, but they’re struggling to do so. There’s just not a lot of great talent that’s open to that, especially when you kind of look at some other variables or other factors.
Yeah, the contractor premium I think is kind of what we call it like classically, to convince someone, to take a contract role, you pay them more. Like you make more if you can work an entire year, non-stop fully billables and independent contractor, you typically make more than you would as a salary.
Problem is like the salary keeps going up. It’s not as enticing, you know? There’s only so high you can kind of make that premium before it just doesn’t make any sense anymore, so. Yeah, exactly. Talk about- and this is the other thing too like the slowdown in recruiter hiring. You had some kind of data on this as well, too.
Yeah. I mean, last year we placed just a ton of internal recruiters at clients, right? Like this was something that during COVID companies unfortunately cut pretty deep when it came to internal talent acquisition, and then the pendulum swung really far the other direction.
So they started to hire a lot of internal recruiters. So last year, average per quarter, we replaced roughly 25 internal recruiters per quarter. And that number dipped to almost, it was probably down 40% in Q1 2022. But yeah. I was going to say, but at the same time too. There’s increase in recruiter jobs.
So there’s more companies still trying to hire at a higher rate. The problem is there’s just not any actual recruiters out there. Like we’re at a point in the market- which is music to my ears, but something I never thought I’d see. And it’s all, but also kind of creates new challenges when companies need to hire more and more recruiters than there are recruiters that actually exist in the marketplace,
which is exactly where we are right now. Yeah, it’s sort of, I mean I’ve made the parallel to hiring engineers, like hiring recruiters is equally hard or maybe harder. And that’s sort of been that the challenge with hiring engineers over the last, kind of for a long time now, but it’s still what we’re seeing now.
There’s just- there’s a shortage of engineers. There’s now a shortage of recruiters, so just because there’s however many thousands of openings for recruiters right now, there’s just not people who are qualified and willing to look right now. In pulling our HR team, which again is the one who places all these internal recruiters,
I mean it’s just a variety of reasons. Maybe they say it’s just, in general taking a lot longer to fill these roles because of lack of talents. They’ll get people to the finish line, they’ll get a counteroffer or there will be multi-office scenarios where people have three, four offers they’re deciding between. And they’ll pick a different one.
It’s a challenge and as you said, there’s no shortage of openings. I mean, we’re actually seeing three times the number of recruiter job openings now, than we did this time a year ago. Roughly 10% more than we even saw Q4 of 2021.
So it’s not for lack of trying. Yeah. Well, that’s a thing too. And it’s just maybe this kind of skips. I know we won’t want to kind of end on like things you see moving forward, but it’s a good time to throw this out there. Like our whole investment and growth thesis is that we need to. Be able to find ways to hire more and recruit more with less actual recruiters, because one way or another that’s what’s going to happen.
So you’ve got the sourcing tech, Sourcewell, which we’re kind of creating so the recruiters you have can actually just not have to be tied to their LinkedIn screen, doom scrolling as much because the technology would just be better and actually give the results in even less time. The Rainmakers acquisition we made just a couple of weeks ago now,
I was talking with, we actually recorded a- this is my second show of the day by the way, Matt. So if I’m a little low of energy it’s because I feel like I’m spent talking to Jeff. Yeah, I know. Talking, talking to Jeff about like marketplaces and whatnot. If part of your job can be turned into a platform than it should be, you know? And I think that’s part of what’s driven the lack of innovation in recruitment is the
fear of like working yourself out of a job, but at the same time too, I think there’s just more important challenges that recruiters need to be focused on. And I think there are a lot of elements of our job that can be turned into like an online marketplace that should be. And then I know this is something that’s been near and
dear to your heart for a long time, which we haven’t officially launched yet, but maybe someday, but maybe in the horizon they’ll Hirewell you, you know. We want to do that internally, but at some point, I do think the recruitment industry needs to look at itself the same way that the tech industry does with bootcamps and everything else.
15 years ago, people like kind of look down on bootcamps. You remember those early days? And now it’s like a major source of technical talent. I do think it’s- we’re coming to that point with recruitment, that recruitment’s obviously not as difficult of a job to learn as tech, but maybe that’s all the more reason why creating bootcamps and something to get people up to speed to learn how to recruit in three to six months is something that we’re going to see more of.
Yeah. I mean, if you think about it, you hit the nail on the head. When you talk about training engineers is tricky because oftentimes engineers start studying computer science in college and do it for four years with internships. So it’s hard to really replicate that in bootcamp. But I mean we both back into recruiting, like pretty much everybody else that does it did.
And I mean, I went through a two week training program. I don’t know if you even went through a training program at all when you got into it. So it’s mostly self-taught or kind of done anecdotally in a small group setting. So it’s an area that we think, you know, stay tuned, I guess
because we have some interesting plans and ideas that we’re going to launch with it. And you know, it makes sense. I mean it’s something where universities don’t teach it. There’s clearly a need in the market and we’re excited to kind of help fill it. All right. Let’s move on to- I actually talked about this today.
I’ll be honest nowadays, my LinkedIn posts are usually just like my prep notes for whatever show we’re creating- just much more efficient that way. Did we finally hit a peak here, salary-wise? Is it too soon to call that or? It’s- I don’t know if it’s too soon, but it’s also, I think everybody can agree that the numbers we are seeing and the rates that we’re going up are just not really sustainable.
I mean because it was only so much money out there and that’s kind of what we’ll talk about in what we’re seeing in the future. But yeah. I mean, when it comes to salaries, just again, last year we saw massive increases in the salaries we’re seeing. So from Q1 through Q4, we saw a 30% increase in the average salary of recruiters we’re placing. On the engineering side, we saw an 18% increase.
So I think it’s engineers started around like 115K up to 134K. Recruiters I think Q1 started at an average about 85, 86K and ended up around 110. I always- let me, let me interject real quick because last time I throw these numbers out there, I had people yelling at me. Oh my God, those are so low.
I’m like, I always to have to mention these are every like for recruiters or engineers, we’re talking across the country, all levels of both junior and senior mixed, in all focus areas. So tech recruiters and non-tech recruiters- before anyone freaks out because yes, like your senior tech recruiters are higher than that. You have to explain to recruiters how average is calculated. I have to do that quite often apparently. Anyways, that’s lot of our audience, so we won’t be making fun of you, but yes, there are some higher and then there are some lower. Yeah. And I had some notes on that because there’s- while we saw like a flattening in the average, in looking at a little bit more detail, like there, it was really like- and I’m not going to get too far.
It’s been a really long time since I’ve taken a statistics class, but the deviation from that average was quite large. And so we still in both recruiters and engineers, we saw a handful of really big offers. Meaning well over 30% above those averages. And again, on the engineering side, those are 200K plus offers and recruiters, some above, 140, 150K.
But we also saw in what brought the average down, if you want to understand how averages are calculated, is that there are quite a few lower level or lower dollar offers. And so it makes sense because that’s how you combat this stuff as companies started hiring less experienced talent at lower price points to kind of make the numbers work a little bit more. Because again, not everybody’s Netflix or Google or Amazon, and can pay all in 300K plus offers to engineers.
And that’s how companies need to compete and it makes sense. I mean, that’s just what you see with talent is where companies start to go after less experienced talent and kind of grow their own or build their own. And it’s kind of logical and hope we will make a, make things a little bit more sustainable going forward.
Yeah. So there’s, there’s only one market in the world that will continue to go up no matter what forever. And that’s the stock market, anyways. But I was having a Twitter conversation about this as well too. I’m like just relax guys. We had a 30% increase last year
recruiter. If you don’t get a 30% increase this year or two, that doesn’t mean the world is ending at the same time. So anyway. All right. What else you want to talk about? And I kind of stole the lead on this one. We were talking about kind of trends in hirings, automation of marketplaces, but didn’t know anything else you want to kind of hit on here.
No. I mean, we’ve obviously made some big, big bets and kind of decisions in how we’re going to move forward with automation on the sourcing side or building out marketplaces. As we’ve said for a while now, the recruiting tech is something that is lagged, other areas in technology
hasn’t truly disrupted our space. And we see it coming and we have some ideas for how we can, can be a part of it, which we’re excited about. But yeah, I know you’ve talked a lot about it in length and I think the Rainmakers are like the talent market places and niche talent market, one that we’re super excited about.
And I think both of these are really start coming online over the next, probably one to three months as we really start to push these out and kind of give our clients different ways to engage and hire talent. Yeah. I think other things I’ll be curious to see throughout the rest of this year, maybe the next quarters, just like inflation from not salary inflation, but inflation from like a consumer products and commodities and everything else, because it’s a topic that we can’t avoid.
And how is that going to impact cost of living increases that companies give out and if they don’t give it out, does that contribute to what I’m now calling the quitters market? As opposed to the great resignation because I think quitters markets just a better way of saying it. But you know, what happens there?
You know? Because I don’t know if every company is able to give 7 or 8% increases to their staff. That sounds like crazy, and if they don’t, does that mean- that’s like another thing on the chopping block, which is going to make people lose talent. Because it seems like you don’t need an excuse to lose talent in this market because people have so many options.
Yeah. And I think the other thing, I mean, rates increasing again- this is going to get far more technical than I think either of us are really qualified to talk about. But obviously, we’re seeing it already with the NASDAQ dropping, right.
The stock market’s down, and that’s for publicly traded. What about the companies that are privately held? Like I’ve heard stories of them having a little more difficulty raising money than they previously had. And from a recruiting perspective, we are seeing kind of little bit of cracks in the armor where there’ll be companies that are either doing a lay off, or what was the company that went under last week? Fast, I believe.
I mean again, a company with, what was it, 500 employees doing under 500K in revenue. Like, yes. Those numbers don’t quite- like I think there’s a little bit more of that where if the growth at all costs isn’t going to work you need
to have a scalable business that can generate revenue and ideally get to profitability at some point in time. And so it’d be interesting to see what happens. I mean, I think we’re still extremely bullish on the hiring market, but you know, we’re also being cautious and want to make sure that anything we do is, is going to set ourselves up for success and ability to thrive for the long haul.
I don’t know. I take the other side of that one. I still believe these markets and evaluations will continue being unreasonable and unrealistic to the positive side longer than any of us will care to be able to figure out why. But we’ll see. I don’t know, so. Anything else you got? That’s all I got man. Alright. Well, thanks everyone out there for tuning into the talent insights podcast, part of the talent insight series, which is always available for replay on talentinsights.hirewell.com as well as YouTube, Apple podcasts, Google podcasts, Spotify, and Amazon.
Matt, thanks again as always. Everyone out there, we will see you soon. Thanks James! See ya.