Welcome everyone to the talent insights podcast, special edition, Hirewell data insights, hiring trends for Q4, 2023, which is normally about Q3, 2023, but we’re also talking about Q2, 2023, because we forgot to do this last time. Anyways, brought to you by Hirewell and Rainmakers, joining me as always, is our lovable CEO, Matt Masucci.
Hi, James. Lovable? That’s new. Yeah, I know. I tried. I’m not sure I’ve ever been called lovable before, but I’ll take it. I’m pretty sure you haven’t. That’s-
Anyways. Yeah, so, we kind of skipped- I don’t know who wants to take the L for this one. So we skipped the Q3 show, is partially a lot of summer PTO, a lot of travel, a lot of slowdown and just the economy totally sucking anyway.
Maybe about a depression. Anything else you throwing in there? Yeah, no, I think it’s evenly split between all those things. Like we both were traveling, we’re over in London for some business meetings that I turned into a personal trip. I know you have some personal trips, but again, it’s just not much to talk about.
Like it’s just a kind of a blah hiring market that seems to continually go down. And I think the last time we got together, we thought we were seeing a bottom. Unfortunately it did get a little bit worse.
So I think it’s all, sort of, all the above. So apologies for all our loyal viewers. I’m sure they were really heartbroken and their feed was just empty without it. But, we’ll make up for it today. All right. Well, let’s talk. Let’s go back into the numbers. Let’s talk about the uptick we did see. Yeah. And maybe it sounds like it makes us look like front runners that things start to get a little better and I want to hop back on, which undoubtedly is a bit true.
But, yeah, I guess we’ll start with the good stuff first. After a fairly deep slowdown over, June, July, kind of early part of August, we did see some nice things happening and there was a 38 percent rise in, we call it committed business. It’s basically effectively retainer solutions, engagements from clients.
Those are up 38%, kind of from the early part of the summer to kind of end of September. So definitely exciting numbers there. Yeah. It’d be easy to tout just contingent jobs that you get, but if you really want to contingent jobs, you can probably go get them anywhere, but these are actual companies that-
committing to some sort of business upfront. So it actually carries a lot more weight in terms of like people putting their money where their mouth is when it comes to hiring. So it’s a good sign. Yeah. And I think we both talked a little bit of a September surge, and then just what we were seeing within Hirewell. But then that was backed up by the numbers released by the BLS and the different labor bureaus.
August job openings were up 5.6%, which was the first increase in a while. Those have been pretty steadily dropping every month this year. We also saw the September job numbers get released last week and those were interesting.
It was a 336K new jobs, but I was reading a bit about over the weekend and there was some, if you peel a little deeper, there’s some interesting numbers. And I think that the one thing I want to dive into a little bit more, at least to research and potential post about in the future is while numbers are higher, they’re a bit misleading.
It seems to be there’s a steady- the number of full time jobs has been decreasing. That’s been made up, almost doubled by the number of part time jobs. Basically that matches pretty well with what we’ve been seeing internally, our interim business, replacing people on a project basis for clients. It has really been up. We’ve seen that, huge, huge uptick in Q3. Those were basically 2x as much as it was this time a year ago, and even, 30 to 50 percent up from kind of early part of this year.
So, companies are dipping their toe back in the water, realizing, hey, we don’t have enough people, we don’t have enough talent, we don’t have enough people for projects and kind of being creative or looking at different ways to bring those folks out. That’s a crazy number when you think about it. So twice as many, we’re seeing twice as many contractor freelance openings than we were a year ago at this time.
So just to give everyone kind of put that in context and everyone heads up. Historically, interim placements, contractors, freelancers, a rise in those is usually precedes a rise in full time, employee hiring, FTE hiring. So, company makes cuts, cuts in terms of actual employee headcount and do layoffs, but then when they actually need to get projects done, they still bring in contractors, hire them on board to fill the gaps, especially if it’s in the middle of the year, before they have like new budget for headcount.
Then oftentimes, and I can’t say this is going to happen for sure now, but in the next yearly cycle, when companies are on better footing to do the new planning, they do another reevaluation to see how many of those people they actually need to bring on full time or how many net new positions that open up.
So no guarantees, fingers crossed. Like, but if this follows the trend, we’ve seen a lot of other economic slowdowns that should mean we see, start to see, some more full time hiring on the horizon, maybe in Q1 next year when things start picking up, hopefully. Yeah. And I think one thing will be interesting to watch.
We’ve talked a lot about the market for corporate recruiters and you know, obviously, that got decimated when COVID hit, spiked. And unfortunately it has been hit pretty hard, but I think that’ll be something we start to see more positive trends. We didn’t really track it because it’s still not material enough of a number, but I think you’re going to start seeing a lot more companies dip their toe and bring on recruiters or corporate recruits, either be on a freelance basis or through an on demand situation like we have at Hirewell, where you can get somebody for a three month project just to see how things are going and hopefully expand from there.
Yeah. Let’s move into some like, things specific to us and the practices we work in. And just a reminder to everyone out there, we work in technology, we work in corporate functions, which is a mixture of HR and finance and accounting. We work in go to market, which is a mixture of sales and marketing. We also do real estate.
We also do supply chain. But anyways, I’ll lead off with the depressing news, but then you can kind of maybe give us some of what the highlights are. So, this past quarter, overall placements were down 25% compared to where they were a year ago. Obviously not good news, obviously not what we’d like to see, but there are some bright spots in terms of how things might be turning a corner, if you’d like to lead us into those.
Yeah. Yeah. Like I said, nobody ever really likes to talk about a 25% dip, but we’d been firing full speed ahead up until around this time last year. And this is where we started to see a pretty big drop. And, you know, from talking to other people and looking at other publicly traded competitors, it seems to be pretty standard numbers.
We’re seeing a lot of areas across competition. But as you said, there have been some bright spots. Our F&A practice or financing accounting has been up year over year. That’s something that’s grown. Tends to be much more recession proof where you need people for projects, you need work to be done within your- you can’t skimp on your finance and accounting, or that’s the sign of much, much deeper challenges.
And I think it’s just a little bit more, there’s more people kind of open to moves there, kind of going from one organization might be struggling a little bit to a place that is a little bit from our footing. In sales hiring, is probably the other one that really stood out where like that number, that’s an area we saw the slowdown first, if we want to talk about kind of, June, July, August of 2022. Like that’s right when SaaS companies and tech companies really started to kind of first sort of sound the alarm that things were slowing down. And so that group, year over year is actually, up quite a bit.
Because again, they really took a step backwards then. And I think that’s also a good sign of where the market may be going, right? If you’re confident in your organization and if you think you can get on a path to better results, clearly you’re going to start by adding to or augmenting your sales department.
So it’s something that we have definitely seen. And then lastly, is tech hiring, obviously tech hiring is something we’ve done forever for 20 years. We have the most data on it. It’s also our biggest practice. And, it’s something that was hit hard. And again, year over year, it’s still down, but we did see over 30% increase from Q2 to Q3.
And I think that’s something where, I think you’re going to touch on a little bit on the, on this wall street journal article, but I mean, we talk about unemployment and these different numbers, forever, it was really hard to see a breakdown by different sectors.
But, I think as you’re going to get to in a second, those numbers have started to creep up, but the fact is, it’s still, there’s just not enough tech workers. There’s not enough out there. So I think that’s kind of what the biggest change is. But I know one other thing, forever, the salaries were spiking, kind of across all areas.
And we even saw that in Q1 and Q2 where the tech hiring was down, but the salaries were still going up. And for the first time ever, we did see a little bit of a decrease in tech salaries. Those were down 7% from the beginning of the year. Where I think back then the average salary for an engineer was about 152,000.
And then that’s down roughly 7%, what we saw in Q3. Yeah, so there’s been some interesting articles I’ve read recently that have some good data components to them. And as you mentioned, there was a Wall Street Journal article that came out recently. Anytime you’re on LinkedIn, it seems like there’s a massive disconnect.
And when I have different groups of friends, some of them work in technology, so much work in like accounting or supply chain. And, I talked to those guys, that second crowd, about like how bad the market is. They’re like, what are you talking about? Like we can’t find anybody, you know? And it seems like there’s like two different worlds out there.
And there is. Like unemployment across the broad base, across the country is, 3.5%, but in the IT world, it’s actually higher than that, which is odd. It’s like 4.3%. And it’s not very often that like, I mean, tech is such a sought after area. It usually outpaces a lot of other kind of sectors and whatnot.
And to give you some context, Q1 2022 was a 2.3% So it was way under kind of what the national average and everything was, at the same time too, there was an interesting article in tech crunch recently talking about how VC funding is down. So anybody works in recruiting and who was touched anything related to VC firms could tell you this, but actually having some data. Series A funding was down 60% over the last 18 months. So just absolutely crushed. And then nowadays the average Series A deal size is down 25%. So what used to be an average deal size of 10 million is now 7.5 million.
So also, if you work in recruiting, you’re probably familiar like funding equals hiring. Typically, that’s what it had been for the past 10 years in a zero interest rate environments. Companies get funding, headcount is absolutely one of the growth metrics they look at in terms of like companies trying to- they want to get on plan, they want to get where they’re going to, they have to hire so many sales people, they have to hire so many tech people to create the products and whatnot they’re doing.
That on the aggregate drives up the demand for tech people and salaries and everything else. So relating that back to we’re seeing an increase in tech placements because there is starting to be once again, an increase in funding, but there is that 7% reduction in actual tech salaries we’re seeing.
And that’s kind of what’s happening. So funding is coming back. It’s just not coming back at the same level. I mean, the question is, like, are they, you know, we don’t know what the interest rate environment is going to be. We don’t know if there is getting back to normal, if this is a new normal.
And as long as I can remember in recent memory, it’s like anytime someone in tech wanted to get a raise, they just had to go to a new job and someone would give it to them, you know? And, the question is, are those days over? Are they paused? Or are we going to stagnate in terms of like where salaries are for a while?
It’s like, I’m throwing a hypothetical at you. There’s no way of knowing, but it’s the first time in a long time. It’s, I think, it’s a legitimate question of kind of like where things are headed for people who work in tech. Yeah. When, for those of us who’ve been in recruiting a long time, like when you’re talking the, whatever, in the 15, 20 years ago, just different world. Most hiring was event driven, i.e someone, maybe a new project, but oftentimes because someone left and not because the company raised 50 million in funding and needed to spend it on building a product. So, I don’t think it’s going to swing quite as far back as it was years and years ago, but I think it’s going to change a bit.
So it’ll be interesting to see. Yeah. Anyways, that’s all for this quarter or last two quarter show. Thanks everyone for tuning in. We’ll try to stay on top of things and get this done also in Q1 because I know everyone missed us last time. But thanks again for tuning in to 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, thanks again, as always, you’re lovable. Twice in one show. That’s exciting. I know. Alright, everyone out there. We’ll see you soon. Bye. Thanks.