November 3, 2021

Hirewell Data Insights Q4 2021

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Episode Highlights

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In our 3rd installment of Hirewell Data Insights, we are sharing the numbers we are seeing in the market. Stop me if you’ve heard this before – but the hiring market keeps getting hotter. What does that mean? Let’s dig a bit deeper.

Hiring Trends

  • When we looked back at Q1 numbers, James Hornick and I were amazed at how quickly things rebounded from 2020.
  • When we looked at Q2 numbers – we dug into a few more trends. Specifically, the market for Recruiters and Engineers. As well as Remote Work. We saw hiring activity jump 28% from Q1.
  • Looking back at Q3 – things aren’t slowing down. We saw hiring activity jump another 20% from Q2. And just for some perspective – it is up 300% from Q3 2020.

Salary Inflation is Real

But there’s more. Hiring across the board is through the roof. But like last time, we chose to drill down on the market for engineers and recruiters. Those are the two hottest subsets of the market. Not only is demand up, but salaries are too. And that’s catching a lot of companies by surprise.

  • Hiring demand for Engineers was up 15% from Q2 (which was up 15% from Q1).
  • The Market for recruiters was up 75% Q1 to Q2. It has flattened out a bit (by our metrics), but those numbers are misleading. Because salary inflation is happening much faster than expected.  
  • In 2021, we’ve helped companies hire 150 recruiters. Look at the trends in average salary for recruiters:
    • Q1 = $86k 
    • Q2 = $102k
    • Q3 = 118k
  • Guest what – it is going up for Engineers too. In 2021, we’ve helped companies hire 300 engineers.  Look at the trends there:
    • Q1 = 113k
    • Q2 = 119k
    • Q3 = 127k

Remote Work Trends

What else are we seeing? Remote work isn’t slowing down. In Q3, 95% of the roles we saw were 100% remote (or allowed for fully remote work). We placed one engineer (out of 80+) that was onsite 100%.

The Great Resignation – for employees in the first 60 days?

We are also seeing more people bail on jobs quicker. Our historic number is ~1% of hires don’t work out (people that quit in the first 2-3 months). In Q3, that number almost doubled.  Why? A combination of over the top offers coming in 2-4 weeks after starts and poorly planned onboarding. Companies struggle to control the first scenario, but can absolutely fix the second.

A not-so-subtle humblebrag

I don’t like to brag about my own achievements – but love to do so when it comes to our team. Hirewell was built on strong, long term relationships. We started doing satisfaction surveys of people that we worked with in 2021. The numbers are amazing.

Client Satisfaction

How likely to refer Hirewell to a friend

10 – 83.2% (243)

9 – 11.3%(33)

8 – 2.4% (7)

7- 1.7% (5)

Rate Overall Experience w/Hirewell

10 – 78.4% (229)

9 – 14.7% (43)

8 – 5.1% (15)

7 – 1% (3)

I’m pretty positive that most of our competitors wouldn’t dream about sharing their scores (if they even bother to ask).  So shout out to the team at Hirewell! They are the best – and are constantly working to continue those trends.

Episode Transcript

Welcome everyone to the Talent Insights podcast brought to you by Hirewell and Careerwell. Once again, I’m joined by our unintimidating leader at Hirewell, the CEO, Matt Massucci. Hey James, thanks for having me. Oh, it’s always a pleasure. That’s a callback to a joke we made in a previous show, so all our loyal listeners will remember anyways.

This is becoming our once a quarter favorite, our Hirewell data insights for Q4 2021 because it’s Q4 now, but we’re really looking at Q3 and more of a recap and kind of what happened then. So there was a lot. It’s always interesting kind of looking and seeing what new things are happening when new trends, or maybe in this case, what trends just seem to keep continuing.

So do you want to lead us off? What are you seeing out there now, Matt? Yeah. No, thanks. I mean, for those of you who maybe haven’t tuned into the last couple of quarterly recaps we did, it’s a bit of a broken record, right? We’re seeing kind of continued acceleration in hiring

demand kind of across all sectors. We’d like to kind of break it down and show the numbers, what we’re seeing kind of major trends. And it’s a lot of the same as what we saw last quarter, just even more kind of bigger, faster, and kind of more intense from a hiring perspective. I think kind of like looking at – so our metrics what we look at is just kind of overall market activity.

And so to give it like some step back, three months ago or whenever we did the last one, it was a hectic Q2, something we’d seen a major jump from Q1. You just never know how it’s going to go moving forward and we plateaued or not and the short answer was no, we haven’t.

I mean we are up 20% from Q2. And that was Q2 is up 28% from Q1. So it’s maybe not as rapid of a growth but it’s still quite large. But the more fascinating numbers you look at our numbers compared to Q3 2020, and those numbers are up 300%. So it’s just absolutely insane activity from both volume hiring, any metric you want to look at.

Yeah there’s not quite Bitcoin numbers, but seemingly pretty close, but… When you get more granular too, because the two areas we kind of focus on here because I think it’s the two easiest to measure and also the most relevant to the audience. We talk a lot about the demand for engineers and we talk a lot about the demand for recruiters.

Both are still at an all time high. Engineers specifically, and I can drop these unless you want to steal the thunder on it. From Q2 over Q1 was a 32% increase and then Q3 over Q2 was another 15% on top of that. I’m talking about the amount of actual software developers we’ve placed a clients.

So it continues to be in- I get 15% doesn’t sound like a lot when you compare it to 32, these are still huge numbers. It’s still like a seismic shift and when you’re talking about like an already hot market has that much more juice and capacity to continue hiring for at increasing rates.

So I thought that was pretty crazy. Yeah, it really is. It just kind of keeps going up and up. And I think what people need to remember as we look back on the numbers, the market for engineers barely dipped. The worst it ever was is Q2 of 2020, it dipped 10% from the prior quarter.

But then it started accelerating from there. So it’s just been an ongoing onslaught of hiring engineers and whatever cliche you want to use, it’s happening. The other thing that it kind of dovetails into is the demand for hiring recruiters because not all of it’s tech hiring, but a lot of it is.

I mean, that’s probably I would say kind of 40, 50% of the demand for recruiters we’re seeing is specifically in the tech world. We saw, just a gigantic jump when we went from Q1 to Q2. That volume was up 75%. From Q2 to Q3 it was a little more gradual.

It was roughly a five to 10% increase, but the interesting thing is just with how large it is, it’s just not slowing down and it’s also kind of a supply and demand issue. The need for recruiters is an all time high

and there’s only so much talent out there. And I think for anybody who’s a recruiter who’s listening, the number of InMails and messages they are getting trying to recruit them is the only metric they need to pay attention to. So speaking of which, and I think this might be, I think this is probably the most interesting thing we’ve done

segment wise here is talking about salary inflation. Now salary inflation is a pain to wrap your head around because whenever you get the data it’s already outdated in a market like this. And what I mean by that is what happened last quarter or the quarter before that is completely irrelevant to what we’re actually seeing in the market today.

Like if you’re talking to a candidate out there, the offers they’re getting in their hand, we’ve always said like, okay, the stuff from last quarter is irrelevant but people don’t always necessarily believe that. But we actually have really good data on this in terms of like, okay what the average comp was from Q1 to Q2, to Q3, both for recruiters and engineers.

And it’s a little bit mind boggling. So do you want to take- why don’t you take recruiters? Walk us through quarter by quarter. And I think that’s the fascinating one. Looking back on it, for recruiters Q1 that the average kind of base compensation was 86,000. And again, that’s sort of tech, non tech, kind of everything in between.

So there’s a little bit of variety but the fact is it was kind of a number that felt like normal. We felt like things were going up and then sure enough, looking at Q2, that number jumped a 102k. But, it’s kind of fascinating, Q3 the average compensation for recruiters jumped at 118k.

So it’s what it feels like, right? I look at the kind of things we- Q1, there was still a lot of excess. I hate to refer to people as capacity but there was a lot of people looking for new opportunities. So companies were able to get people for less or kind of you’ll get people onto contract assignments, probably the lower price point that they would have wanted. But people if you’re actively looking, you might take a little bit less, but as that’s gone up- you know everybody loves to refer to the great resignation but part of why so many people are looking is that there’s so much money out there

that’s being thrown at people. It’s just a phenomenal time to explore new opportunities. Yeah. So going from $86,000 average salary for recruiters at the beginning of the year to 118 last quarter, like I’ve never seen an increase in a skill set like that, that quickly- so anyways. The other one was engineers. So the thing that’s crazy about this one, the numbers are still impressive in terms of how it’s gone up.

It’s not as dramatic, but it’s almost more surprising because this is a skill set that’s already pretty highly compensated that I mean, the arms race for actual developers has been happening for a decade now, you know what I mean? So this wasn’t something that just kind of happened overnight.

Q1, the average salary for an engineer was 113,000. Q2 inched up to 119,000 and then Q3 this past quarter, the average salary starting salary for an engineer was 127,000. So even within a high demand skillset, that was high demand before the year started that barely even dipped as things were kind of crashing last year, you’re still seeing a pretty substantial gain just throughout this year. Yeah, you really are. And I think like those numbers, while they’re accurate and it’s across a fairly large data set of a couple of hundred placements throughout the year, I think the interesting thing is I think it’s even more intense than it looks like.

You hear these stories of what these big tech companies are able to throw and then some of the equity that’s on top of that, like we’re not even measuring that but it’s some pretty substantial numbers. Again, these large tech companies just have his war chests of cash and equity that to throw people and it’s showing in the market.

Yeah. Some other trends, there’s some other cool things we found here. Remote work, because we actually talked about this in last show. Why don’t you go on this one? Yeah. Again, same type of thing. While we’re trying to dig more into the data on salaries we’re also trying to dig in the data on remote or kind of where people are working.

We’ve classified three ways, it’s a hundred percent remote, it’s hybrid onsite and then a hundred percent onsite. And so we’re trying to go back and look at more things, but we knew in the engineering world that it was largely remote. I mean that’s again, engineering always tends to be kind of an early adopter to stuff and then engineers can clearly work anywhere.

They have such a kind of upper hand in the job market. So those are the trends that kind of held steady. I think last quarter it was, we didn’t know fully on-site hires in engineering and I think it was roughly- for recruiters it was a little bit different, probably like 55% remote.

But we saw a huge shift in this quarter from where recruiters are working. And again, that will never jump to almost 95% of the recruiter roles that we were working on our field. were a hundred percent remote. We were talking a little bit before kind of what the trends were sort of why, again, it is still these big national tech companies and sort of their work from anywhere policy and looking at people in different markets

has really driven that. And it’s hard for places to keep up that really want to push for that onsite or even hybrid environment because they’re competing with places that allow people to work anywhere. I was actually, I had at least one conversation today and I’ve had a few others in the past couple of weeks where, because that shift in the recruiters are remote going from 50, 50 or 55 45 last quarter to like 95 this quarter.

It’s kind of like you said, the arms race among the big tech companies, pushing it- now everybody else who would have liked to have people onsite part of the time at least, realizing well, it’s either hire someone fully remote or we’re not going to get anybody. And it’s what’s ultimately happening, so. A point I want to add and one thing we’re starting to like- a call I was earlier on today,

they’re actually looking at sort of fourth classification, because the a hundred percent remote is kind of the trend things are going, but we’re seeing a little bit of pushback where people still want to have the option to go into the office. So it’s not necessarily like a true hybrid situation.

It’s just like, all right, they want to have an office in their market that they can go to periodically. And so it’s interesting as you can see- what are you doing today, Matt? Currently at WeWork because the other trend in Hirewell is we actually closed our office last month and we moved into a WeWork. I never would’ve thought this had been a trend we would do, but it works quite well,

right. Where I think we’ve got 10 or 15 people in here today. It allows us to kind of have larger space that people can come here and socialize and kind of work alongside their coworkers but sort of do it on their own terms. Or if you want to continue hanging out in your basement beside the Peloton.

Yeah. I can keep doing that. All right and then the other trend that’s troubling for everyone. And Jeff and I did one of our 10 minute talent rants on this is- was that two days ago? I don’t even remember. It was last week. So fall offs. We’ve seen this with our clients, which is unfortunate. I’ve seen this with a lot of companies who aren’t our clients, I’ve seen this with people I’m talking to, it’s happening basically everywhere.

But what’s the rate right now? What’s kind of the increase in people leaving jobs fairly quickly compared to what it usually is? Yeah, so when we consider a fall off to be someone who leaves their job within the first 90 days or first three months. It’s something we always track

because it’s the sort of the worst case scenario for our business where essentially something doesn’t work out, right. It was kind of historically like less than 1% and we saw in Q3 that number jumped to 2%. I mean it’s a fairly large number and we’ve talked a lot internally about it and I don’t have great data on sort of why or what’s causing it.

And ultimately I think it’s a few factors. I think first and foremost, it is just a sign of a hot market. We’ve gone back and looked at sort of why things haven’t worked out. I’d say roughly half of those were situations where someone might’ve taken an opportunity and then something came along within the first 30 days.

So they might’ve accepted the job started and that’s something that there was a little bit later in their process came around and just made a over the top offer that like they ended up deciding was better than what they’re in. So that’s just hard to deal with and it’s just a sign of a hot market.

I think sort of the second thing is the challenges of onboarding remote. We all know it, we all kind of understood it. I think we’ve been living at- personally at Hirewell I think we’ve done a pretty good job. We’ve hired almost 35 people since we moved to fully remote environment and it’s tricky.

You have to really work hard to do it. But I know sometimes people get into a job they don’t feel it’s the right thing. They don’t see the potential and it’s so easy to take something else that like, they’ll just, they’ll bounce out of there within a month or two and then do something else.

Yeah. I think that you can’t do anything about how hot the market is. It’s out of your control. It’s also out of your control the fact that person you just hired is undoubtedly still getting hit up with more offers, they might be getting paid more money. But the thing you can control is just making sure they feel appreciated,

they feel like you’re setting them up for success because I think it’s the only thing you can control is the onboarding process and the training process and everything else. And don’t make the mistake of thinking just because someone’s senior and they said yes, and that need that was a pain in the ass is finally filled that you don’t have to worry about any more. You absolutely do. You should want to worry about it because that’s what’s going to make sure you don’t have these kinds of issues happen, so anyway. Yeah, no the onboarding and retention that first 30 days, first 90 days is so essential to success and it’s an all hands on deck process.

I mean, it’s gotta be recruiting, HR, hiring managers, executives, everybody’s got to lean in and make sure that the talent you worked so hard to hire likes it and feels vested in the opportunity and wants to stay for the long. haul All right. Let’s switch gears here for one last piece, something new.

We’re going to toot our own horns for a minute here. We also recently started doing satisfaction surveys among the people you’ve been placing. So every time we place someone we send them kind of, how likely are you to refer Hirewell to a friend? Rate your overall experience.

And I think the numbers are pretty good. So I’ll be putting some infographics out there on LinkedIn about this, but if you want to go ahead and kind of cover this one. Yeah, yeah. And you know it’s funny. I think our culture is very much of a, it’s a humble one.

We think we’re great at this and we work really hard, but we know you have to constantly, you constantly have to prove yourself in every situation is a new opportunity to make a great impression with people. And so I like to do it because it’s not really bragging about myself, it’s bragging about the team. So basically a simple kind of one through 10 survey, I mean, I think we got 96% rated us a nine or 10 in terms of overall satisfaction with the process of working with a Hirewell recruiter

and or willing, you know wanting to refer Hirewell to a friend. So shout out to our team, great job, everyone. You make us proud. The work you do is truly amazing. Yeah, the lowest scores we got in either of those questions were a seven. So if the worst work you do is still a seven, you’re doing alright.

But yeah. I will put those up. We’ll kind of publish that and put that out there on LinkedIn and along with wherever we put the podcast, we’ll put all these numbers out there. But that’s it. Actually the last thing, what I’d be interested in doing is I’d like to run that across the entire industry.

I am very curious to ask everybody who’s a job seeker, the last time you got a job- actually, because we have to be fair. It’s a job you took from the recruiter. What was your rating of them? And I’d love to actually see what it kind of looks like industry-wide. So I’ll work on putting that together.

But that’s all we got for this week. Matt, anything else? Did I miss anything? Nope. Thanks for having me, James. Nailed it. Thanks everyone 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. Bye guys, thanks.

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