May 19, 2021

Hiring Trends Q2 2021


Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

Episode Highlights

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James Hornick and Matt Massucci have a discussion about the market thus far this year and what new trends are emerging. Salaries, in-demand jobs, work from home preferences, and even Hirewell’s own growth. With the numbers to back it all up.

Topics include:

  • How big is the employment bounce exactly?
  • The dip and rebound in the contracting market.
  • The explosion in internal recruiter hiring.
  • What’s happening with rates and salaries?
  • What do people really think about Work From Home?

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

Episode Transcript

Welcome to the talent insights podcast brought to you by Hirewell and Careerwell. Today I’m joined by someone who shouldn’t need an introduction, but probably does – Hirewell’s founder and managing partner, Matt Masucci.


Hi James, thanks for having me on here. It’s my only opportunity to do something with you. So it’s really exciting, hopefully I don’t blow it. Yeah. Hopefully we don’t show people why we only do something together once a year. So I think the last time we did do something  was December, 2019, right?


It was like a year recap or something like that. So, yeah. I think I’m sure we had something on the books to do sometime in 2020, but all hell broke loose. So yeah we couldn’t get anything done. So kind of a special segment and we wanted to make a point to do this. We’ll probably do this quarterly, which is why we titled it that way.


So Hirewell data insights, hiring trends for Q2 2021. So I hope to do a Q3 than a Q4 andI know Matt and I both, we talked to lots of our clients on a daily basis, and I always find that the stuff we find kind of mundane about what’s happening in the market, we always forget that like no one knows this stuff. No one has kind of the insights we do in terms of what’s happening in the market.


So just giving kind of everyone an overview. But we also want to kind of tie it into data numbers that way it’s a little more meaningful, not just the two of us sitting here, BS thing about what we think is happening. So, I guess not to bury the lead, but for anyone who’s not aware, there was a massive crash in the market last year with the pandemic and hiring has roared back to a level that even I didn’t think was possible.


But we’ll talk about kind of those numbers in particular. So Matt, why don’t you kick us off though? Maybe let’s start with like overview in the last 12 months or so. I can kind of jump in here as well a little bit too, but why don’t you kind of just give everyone kind of a picture of what we’ve seen.


Yeah, absolutely. As you said, we talk with clients quite a bit about this and I feel like I have this conversation on almost daily basis with either business leaders or heads of HR or our contacts and everybody’s in a different point, right? Where your company may just be starting to dip your toe into hiring and you read the headlines and you sort of assume that it’s still probably a buyer’s market for talent.


And as you said, it’s just, it’s not. So the way I’ve talked about it is kind of in three phases is like just what did things look like heading into COVID, what the heck happened from a hiring perspective, and then sort of where things started to rebound and sort of how, as you said, try to use as many numbers as much data as you can to show it. 


And I think we’re in a unique position. While we’re not a huge firm by any means, we do a lot of different things and we touch in a lot of different areas. So it gives us a really unique perspective. So first thing I’d say is going into March 10th or so of 2020, we having a strong Q1, I mean all of our practices were doing strong, hiring we had goals of exceeding the prior numbers by 20%.


When all was said and done, we ended up coming in a little bit down a little bit less than four or 5%. So again, for the first 10 weeks of 2020 it was business as usual. Again, I think we all sort of remember how things played out and kind of the fear and uncertainty that arose with it.


And it was a challenging time. So how things played out worked were interesting. And that’s where we sort of saw things change. Sure. And to give everyone else an overview of our services a little bit, add a little more context. So we do a lot of things.


We place consultants, we place permanent employees, we do a lot of outsource recruiting for companies. So we actually have people who sit on site and work with our clients. We do a lot of executive search. We have five primary practices, which I think is the one thing I always want to highlight.


We have a pretty broad view of the market compared to most firms because we do have a team that does tech, a team that does HR, We have a finance and accounting team, we have a team that does sales, we have a team that does  marketing. So we really have like a pretty broad reach and kind of understanding the types of hiring skill sets that are out there.


We also have a very diverse client base. So within the Chicago market, we’re very big in the small to medi sized tech area, which we kind of have always been our focus. We also work with a lot of enterprise places. We work with a lot of agencies and consultancies, which was an interesting thing to follow, Also work with a lot of nonprofits so we also have a pretty broad view of that. I would say to give maybe just the overview of, cause all those areas saw things happen and roll out very differently. Tech and sales held pretty strong, like their overall -the job orders we saw from both technology and from sales pretty much flat in Q2 last year. And then it was actually up 30% in Q3. At the same time too, like the consulting space- so where we actually saw people, we have out working on an hourly basis with clients that dropped off, fell off a cliff. I mean, 90% fell off over the course of the first three months of the pandemic which is like an unprecedented crash we saw kind of in that area and with that bounce back, which we’ll get into and kind of leave that up a little bit later.


But so like tech and sales held pretty strong marketing, HR and other big areas for us, their job orders fell by 75% in Q2. Like things just slowed down so dramatically. I think we didn’t place this, like previous year 2019 next as a tougher developer, as a believer recruiters, internal recruiters was our number two most commonly placed position from clients. Correct me if I’m wrong, we didn’t place a single one between April and October last year. Like it’s insane to see something be one of our biggest areas, dry up to the point where no one was hiring for it. And that was kind of an underrated and kind of overlooked aspect of the way the recession unfolded, right?


Like I’m old enough to unfortunately been doing this through quite a few recessions and you go back 20 years when crash had obviously that heavily hit the tech world. You fast forward to the recession of 2008, 2009, it was very heavily tied to the financial markets and real estate.


So you saw a lot of carnage there. This one hit a variety of areas, unfortunately hit the service industry and retail really hard, but also hit recruiting. And so we saw a ton of layoffs at the big kind of tech focused or tech enabled, like software and recruiting firms in range arrangement, like the LinkedIn, Glassdoor, places like that.


We saw a lot of internal recruiters just unfortunately, have to look for new opportunities. And there just, there weren’t a lot of companies hiring because of just all the uncertainty. So it was challenging and I think one thing this is obviously in the distant rear view mirror, but  a lot of companies were thinking they could get access to good tech people throughout all of this and there was a really, really small window where you could hire good people who would unfortunate gotten laid off due to the pandemic. But that literally was April and May And then the window closed, right? I mean, cause I think unfortunately the- it makes sense, right?


The big firms who were doing well, right, Amazon Google, Zoom, they were hiring like crazy. So all they did was just basically snap up any of the available tech talent that existed when everybody else was just too scared to even think about hiring. So buying the dips works on the human capital level, which is crazy to think about.


And you don’t see them that often, but it did. So, yeah. But yeah, and I think you hit it all that I wanted to touch on too, right?  It was struggling across a lot of areas, but, as expected tech and sales were two areas that held relatively strong. Sales is something that historically we’ve seen do well during recessions because companies think alright great, we can sell our way out of this thing. And tech is such just a key component that people realize the value and how hard it is to hire tech people that they kind of kept rolling on that. one other piece you mentioned we do quite a bit of executive search here and in our world, executive searches role are in the 150 to $300,000 range.


And it ends up being probably 15 to 20% of the work we do annually. But that was an area, at least for us where it just completely went away. I think we probably did five to six of those post COVID at least through kind of Q4. Obviously that has started to come back as well, but that was an area hit really, ratcheted back where companies just kind of stop the strategic or forward thinking stuff and focus on just kind of people that do projects or kind of more hands-on roles.


All right, enough of this depressing talk. Let’s talk about how things, like all of a sudden, turned around in the craziest way possible. So when did we see it ultimately, like when did we start to see things really turn? Yeah and again, across different areas it was at different times, right. 


Where as we said, tech and sales were relatively flat in Q2 and Q3, the Q3, they started to really rebound and we saw some pretty major steps forward. Again, sort of however you want to look at it. And the metric we always do is, what are the job orders we’re seeing?


So for our HR solutions or marketing search, I meant the job orders returned to pre COVID numbers in Q4. And it was good like that. I think going into the holidays we were all very, there was sort of a just a much better feeling around our office and kind of the industry as a whole.


But it really didn’t prepare us for what we saw kind of as the calendar turned into 2021, right. Usually there’s a little bit of a lull those first couple of weeks as companies try to figure out what the heck they’re going to do, what their budgets look like and when they’re going to start hiring and there was no lull this year, right.


So it’s been a steady go now for four months going into this year. Again, using the job orders as a metric where they were in Q4, they hit pre COVID levels, now doubled, right. We’re seeing just the flow client needs in those two areas that were harder hit, two times where they were and you mentioned kind of that metric. I always liked the little, like the little metrics to what are our key indicators are, what the economy is looking like in the market for recruiters is just boomed.


It’s one where we started to feel it last year, we were fortunate enough to get a little bit ahead of it and bring out some great people ended up Q3 and Q4. And as we’ve tried to ramp it up this year, the competition is nuts. And I think that’s what companies are starting to see where you think alright great, we’re ready to hire. Let’s find ourselves an internal recruiter and they’re struggling to do it. Then the metric we’re seeing there, I mean I think we’re in queue one. We placed 10 recruiters in a month for clients and  that doesn’t count the people we hired internally.


That’s just purely people where you’re getting to corporate, corporations looking to hire internal recruiters, there’s over 30 for the quarter, which is just insane. And again, it would have been probably 30% higher if we could have found more. Yeah. I like to think of it as like the derivative of lifinding, I still think tech drives all of it, right?


So people have been still struggling to find tech people that it’s like a derivative of it. Like the people who find the tech people have become hard to find. So going from not placing anybody in that skillset, like for the part of last year to doing 10 a month and only limited by the fact that it’s just like, it’s hard as hell for us to find anybody ourselves.


Like it’s just nuts. So, yeah. Yeah. Without a doubt definitely been crazy. You mentioned before, like our managed recruiting practice or recruiting on demand, I mean that that’s been through the roof too, I mean there’s so much demand for that. It’s crazy. And the other kind of little anecdotal story, I’ll tell you, a competitor of ours -I’ll leave them nameless, but they were acquired. So one of the big clients was Robinhood and I think they had probably 40 or 50 people onsite with another 40 or 50 people at other kind of tech companies around the country and they just descended to buy them. So that is new, that’s a first right?


Yeah. Buying a company buys a recruiting firm. The only thing I remember, I remember this situation, the only thing I can think of those remotely, similar to back in Groupon’s heyday, I vaguely remember them buying out like a local consulting firm because the market for developers is so high, but that seems a little more normal.


Like you’re buying developers like buying a company because they have recruiters, Like I’ve never seen that. Yeah. I don’t know if that’s going to be a trend but it’s an interesting thing to see. So other things that I wanted to kind of talk about too. So talk about some of the other teams and whatnot. Marketing, I noticed that even still, and this is the thing that, so HR – and I’m going to start, I should say, tech and sales kind of led the way. HR was probably second and then marketing, I think only more recently kind of really exploded.


So like they’ve hit those kind of same levels February or March. They were kind of back to normal by the end of last year. And then I know that other things, so we also do finance and accounting. It’s a smaller practice for us. I always like to throw that out there. So we don’t, we don’t focus on as much from a numbers standpoint, but I think that one of the big trends they saw was last year, a lot of their businesses  it was very much kind of focused on backfills. Companies are losing people, but there wasn’t a lot of new hiring going on in the finance and accounting space.


But now it’s, there’s all kinds. So like the amount of job orders they’ve seen is also kind of exploded the same way. Also higher level positions, which is also I think a trend we’re seeing across the board it’s finally happening too. So what’s transitioning the roles a little bit. 


So we might’ve talked, touched on some of this already, but like by practice areas, what are we seeing are the highest things in demand for all the different areas we work in?


Yeah. I mean as you said, we touched on this a bit, but I think it’s worth kind of reemphasizing. As we said, within our HR practices, it has been booming. I mean, there’s definitely hiring across the board there. Right? I think companies see the need to- unfortunately HR can be an area that is cut when times are bad and it’s always sort of -it’s a poor decision especially in a situation like we’ve just gone through last year. You need people internally who are really ensuring that your culture and your employee experience remains strong but companies just can’t help themselves.


And it’s an area that they’re going to cut if need be. So HR as a whole, we’ve seen a lot of hiring, but recruiting is the number one thing there. I mean, it’s just, as you said, it’s not, you don’t need to keep belaboring the point, but there’s just hiring there and it’s what a time to be alive if your recruiter within the tech practice. I mean, hiring for software engineers is, it goes without saying, right.


That hasn’t changed. I mean, there’s just a crazy demand for it. And I don’t see that changing anytime soon. But an area that we’ve really seen a ton of has been the hiring for devops or kind of cloud engineers, which makes sense. I mean, right?


This is an area where people are everywhere and people are less reliant on kind of internal tech infrastructure, right? So that means they’re putting things out to AWS for Amazon or Microsoft Azure or GCP Google cloud product. But there’s just a huge demand there.


Again, and we’ve seen that as sort of every aspect of it, right. Hiring for those people, but then also like the consulting firms and the companies that focus on cloud, there’s been a ton activity there as well. Not to pull it off track, but just talk about that a little bit, because one thing I noticed too, back when the darkest part of last year, that March, April timeframe the tech held up the most.


But I think within that area, like it was those positions that were getting hired without- like, I do think there was a little bit of a lull in dev hiring, right? Because you can always put your dev a new development projects for a few months, if you need to. But your systems can’t go down. And that was the thing that we kind of saw as those are the things that were still happening.


And I almost wonder because that’s continued and it’s still in such high demand. Now I almost wonder as for the last, what, 15 years you and I have kind of worked kind of in the tech realm, knowing that like developments are the most sought after position. But like, I almost wonder if this is kind of like a bit of a change in terms of how companies are structuring things and whatnot, that is the dev ops and cloud space, is that becoming kind of the more- if you’re getting into your career now, is that maybe a better path to jp on or just in general? Is that- I don’t have the answer to this, but I’m just hypothesis. I definitely agree. I mean, we’re both old enough to have been where the AppDev side was much more important and paid better.


However we want to look at it, then the infrastructure kind of the back of the house and the rise of cloud and devops and kind of how you can automate all these different things. It has changed it where they’re equally looked at equally. I guess it’s hard to put it in terms of very important for successful organizations and that kind of flows through to the competence sort of the demand for it.


So, yeah, it’s definitely been an interesting one to see. Let’s talk about the contract versus perm versus how companies are kind of hiring right now. Where are we seeing more demand kind of what’s that? How are things kind of shaking out from that standpoint? Yeah. So again, having done this for multiple recessions, I mean there’s definitely the- however you want to put it.


But the cliche that contracting is the first to get caught but then also the first to come back. I mean, generalizations are made because usually they’re, oftentimes true. And this one has been pretty interesting to see. As you mentioned, contractors in place and consultants though, is it a pretty big part of our business?


It’s probably 30, 40% the traditional stuff we do for a longer duration. So it’s six to 12 month engagements, kind of across most of our practices. So at any given time whatever, there’s some coming on, there’s some rolling off or converting to become full-time employees of clients.


But going into all of COVID we were at a near record high in terms of consultants out over the course of March through I’d say June. I’d say 90% of those people wrapped up for various reasons whether they converted or unfortunately the project ended. But then the fascinating thing is, again, the cliche is that the first to go, but then they’re also the first to come back and we saw equally a pretty big uptick in hiring for contractors, consultants early on in that April, May, June timeframe. Rates were low and companies who were able to bring people on, are able to bring on some pretty good talent at some reduced rates.


So fast forward again, we had roughly 90% of our active consultants wrap up in that kind of three to four months stretch. But by I’d say October, November, like all of those, our numbers there were equally, where they were before, right. So talk about a big dip and then kind of right back to where we were.


And you fast forward another three months and those numbers are up 80% from where they were a year ago. So it was a huge cycle through people wrapping up and then kind of coming back on board. And so it just is kind of fascinating to watch and fascinating to see.


And again, more and more companies are thinking about it for a variety of reasons, whether it’s uncertainty of what they want to do long term or just inability to kind of bring on the talent they want on a full-time basis. So they need to consider, expand their parameters and kind of look at different options.


So definitely been interesting to see. Yeah. Are we seeing rate pressure in any areas? Like I’m kind of curious what’s happening there. Yeah. So as I was saying, for companies that were bringing on consultants, that kind of Q2 even into Q3, like they’re able to bring on some pretty good people at lower rates but  that bounced back so quickly.


And a bit of people who might’ve been out at very kind of lower or below market rates,  those are people who are moving on and just taking kind of more money. So yes, we definitely seen rates tick up. I think that’s a segue then we want to get to talking about salaries.


And everything kind of as you said before, everything kind of moves at different speeds at different rates and it all depends on it’s just all supply and demand. The rates start to go up when there’s too much demand and not enough supply.


And so we’re definitely seeing that on the contract side in terms of salaries. I think it’s starting to get there but not kind of across the board. So I guess we can talk about some broad trends and stuff too as things I want to get into, because we were going to talk about some work from home, some other stuff also. Last thing I want to mention on contracting is something that we noticed on the marketing side of the house. What’s interesting is that we’ve seen a lot of uptick and ask for certain types of contractors that are uncommon.


So product management and performance marketing. There are some skill sets design, skill sets, copywriting skill sets, where it’s very common to have talent pools that are interested in contract. But other ones in there they’re typically perm hire positions. There’s not like a deep holes in it, but we’re seeing companies are really feeling the pinch for resources that that’s kind of their gut reaction is to ask for, Hey, can you find some contract help?


But they’re asking for help in areas where those pools really don’t exist to begin with especially even less so now that rates are getting jacked up. So I think it’s more of a commentary on just the reaction of how much people are struggling to find perm hire people that they’re asking for a market in the contract realm that isn’t really there.


So, yeah it’s a little bit backwards because the time when contracting, like if contracting rates aren’t super high to incentivize people to leave, permanent opportunities your market is people who are out of work or readily available. And as those numbers have dropped so dramatically, there’s just, there’s not people who are going to be like, nobody’s going to take it for a two or three month contract because they’re going to get three more offers, which I know is one of the other things we want to talk about, but there’s so many opportunities. Like people just aren’t really going to considera contractor, a project based engagement unless the money’s great. Yeah, well, let’s go into work from home.


We’ve got a few things left we want to hit on here before we let everyone go. Of course you can leave any time you want to everyone. What do we say? So it worked. We did some studies in the work from home area. So why don’t you hit us up? Kind of what insights we have there. Yeah, so we ran a couple of different surveys. One hitting on clients just what their plan was. And so we looked at that kind of those same sort of three trends or sort of three time periods. What were they doing pre COVID? What were they doing during COVID and what did they think they’re going to be doing after the fact? And I think we’re sort of in the after the fact now, where, we’re in this kind of new period where it’s just hard to say exactly what’s going to happen. But  the world has changed and it’s hard to get people that have to do what they used to do. And so there’s some interesting trends. 


So first off, I always like to differentiate work from home and remote work because while there’s obviously some overlap, they’re two different things. I consider work from home means in my world or in sort of how we look at it at Hirewell, is the company’s based in a particular area or has offices in a particular area and they may allow employees to work from home periodically, but the thought is they’re near one of their offices. They’re going to come to the office occasionally, whether it’s one day a week, it could be four days a week.


It could be one day a month, but there’s that side. And then there’s remote, right? Where people could be a thousand miles from an office and they may never go to that office. So, I’d like to always kind of differentiate those two things. And so kind of the two trends we saw with each.


So first off, 85 almost 90% of respondents were fully remote during COVID but  where they were before. So again, on the work from home side, we saw roughly 20% of companies are- one in five companies didn’t allow any work from home. That number is going to drop to 7%.


So that’s obviously a massive drop, like dropping a 250% in that. I mean, I think seven, the 7% is interesting. I think there’s some, obviously some industries that it’s just required where people need to be there. But then there’s also there’s still, there are some companies out there there’s still a little bit old school who just are dying to get people back in the office and, , our guest, , can’t wait to mandate that.


And I think those companies are going to be in for a rude awakening. Then the second piece is that the remote portion of it, right? And so again, like going into COVID our data showed that roughly 14% of companies had some or all of their employees working remote.


So it was a little bit higher number than I thought. And again, that’s not saying every single person was remote but at least they had that as an option for some role with their employees. But that number, again, that’s jumping dramatically to over one in three or roughly 35% of companies will either be all remote or at least have a significant percentage of their employees working remote. So they’re interesting numbers. I think people are still sort of just throwing darts at the problem right now. They’re not really sure. We’ve talked about like what we’re going to do. Like we happen to have our lease expiring in four or five months, so we’ll have some big decisions to make.


Then the second survey we put out was asking employees, what do they want to do? So obviously the first thing we did was send it to our team just to see. And the numbers were interesting. They’re kind of what I expected. I mean, I knew people were going to be hesitant to come back to the office because they’re productive.


They’re doing well. They’re enjoying the freedom and quite frankly, the commute was, is from what I can tell, the number one reason why people don’t want to do it, right? If you’ve got to spend 20 minutes to an hour each way to get to an office, that’s just time you don’t really get back.


So yeah. The pandemic gave us our lives back, it seems as bad as it is to say. Yeah and I mean, as a business leader, I think one of the challenges there will be just maintaining culture. And how do you do that? We’ve worked hard to do it. I think we’ve done some things well, and probably some things we could’ve done a bit better but it’s tough. I, for one I’m really tired of leading zoom meetings but I think it’s just part of the job description now. It’s really hard and to talk into kind of the dark chasms of yeah, at least everybody usually has their videos on, but like everybody is muted.


And it’s just, it’s challenging, I see. I’m okay with zoom, but not the Hangouts or what’s the Microsoft one because Zoom, like they keep your image on the screen. So I can talk to myself like pretty much all day. Problem is when I can’t and I have to look at you or somebody else, I just lose interest.


So it’s a good point. One trend we’ve seen is companies that are not flexing on remote because there are still companies out there that do that and they believe that and who am I to say, but there’s companies out there that think they’re better off kind of giving them a back in the office. But what we’ve seen as a challenge is not just candidates objecting to that, but that there it’s a signal that they’re not flexible on.


Other things. If after this entire experience, you aren’t somewhat flexible and kind of work from home when probably everyone, your organization’s proven they can do it. Like, what else are you not flexible on? So just a tidbit. Yeah. I think the second part to that, the big trend we’re seeing is just the concept of talent anywhere. Again, being secure, having so much of the work we do in the tech space, tech companies were super vast, I meanmany already- we’re looking at people anywhere, but it’s just, that’s been sped up quickly and when you’re hiring engineers and there’s such a shortage of them it just, it’s a great way to expand your talent pool.


That applies to frankly, just about any hard to fill role. And so I mean, we’ve seen a huge trend, just kind of across the whole company. Again, looking at recruiters everywhere, looking at salespeople, looking at, tech people, looking at finance and accounting people.


One interesting thing there is there’s some challenging decisions to make on compensation and  we’ll talk to a lot of companies like, so there’s, there’s two parts to it. One where like, they may just not be physically set up to employ people in particular States.


So that’s a little bit of a challenge. I mean, it’s not a super hard one to overcome, but sometimes it’s just easier. Hey,we’re set up in these six days, so let’s try to limit who we hear from those States. The second part is just really trying to avoid high cost areas because if you’re a company from Chicago or Milwaukee or Atlanta, and you start looking at people in the Bay area, like you get sticker shock and how much those people make.


But then the flip side, and I think that’s why I mean the big tech companies on the coast were so quick to embrace that because they noticed that years ago, you can hire an engineer in the Bay area for 200,000 and the same person in the Midwest could be 150,000.


So it’s interesting kind of trends there. Yeah, it was also, I know there’s some debate and discussion over, should we be paying employees more or less based upon where they live, if you go fully remote, which come from different companies that have different takes on that. So it’d be interesting to see who wins out.


Yup. Fascinating times. Anyways. Anything else you want to cover? I think we pretty much nailed it. All of it. No, I think we covered it all. We’ll uh, you don’t have links to a lot of the depth. I think we’ll hopefully turn this into an article that I’ll share some of the data and tie to some of the things we have so you can see it. If you’re a business leader looking to see those trends, we’ll hopefully have them for you. If you’re an HR person who’s trying to make the business case to your leaders of what the market looks like, we’re trying to help there as well.  Awesome. thanks everyone out there for tuning into the talent insights podcast.


If you want to hear more of what Matt and I have to say, you can subscribe to the Hirewell’s channel on YouTube, where we have a playlist of all of our episodes and the talent insights podcast, which is available on Apple podcasts, Google podcasts, Amazon and Spotify. Everyone out there, we’ll see you soon. See you.


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