The labor market added 175,000 new jobs in April, bringing the annual total to 982,000. These two numbers encapsulate many feelings about the labor market right now, especially for recruiting and TA leaders. First, job gains in April came in below expectations for the first time in several months. Second, the nearly 1 million jobs added four months into 2024 already eclipse many full-year projections.
Earlier this month, I had the opportunity to speak at the ERE Recruiting Conference in Austin, TX, and these conflicting stats, along with many others like them, garnered many head nods from the audience. Headline numbers remain strong, but things don’t feel that way, especially for many recruiting and TA leaders.
Looking at the big picture, over the past 12 months, we’ve added just under 3 million jobs, still above the pre-pandemic pace.
But if things are back to “normal,” why does it feel like such a challenging labor market, especially for recruiters?
Yes, we’ve added 3 million jobs since this time last year. But if we look back to April 2021, we had added 14 million jobs in the previous 12 months. A shift from 14 million hires to 3 million hires in just a few years might not feel like a soft landing for recruiting and TA leaders.
That shift is echoed in locations across the country, but some locations have fared better than others. Places like Austin and Miami have hiring volumes and job gains that are back in line with pre-pandemic levels. However, Boston and San Francisco have seen new job gain totals hover at or below zero on an annual basis.
As we dig deeper, we see both bad and good news below these trends.
Let’s start with the bad news. “White-collar” hiring – defined by job growth in the professional and business, information (i.e., tech and entertainment), and financial activities industries – has begun to stagnate, with some industries losing jobs month-over-month. Despite 40 straight months of positive job gains for the overall labor market, hiring is flat or declining for many “white-collar” roles.
“White-collar” jobs did not face layoffs on the same scale as many industries at the pandemic’s start. In fact, employment surged from 2020 through 2022, driven by tech over-hiring. For the information industry, which includes many tech companies, employment surged by 200,000 from February 2020 to November 2022, a 7.3% increase. To put this into context, overall employment grew by a modest 1.4% during that same period, and information accounted for nearly 10% of job growth despite making up just 2% of the workforce.
Now, information employs around 3 million workers, 100,000 fewer workers than at its peak in 2022. As for the other “white-collar” industries mentioned—professional, business, and financial activities—don’t let the headlines fool you. Those industries are still adding jobs, but the pace started to stagnate in mid-2023.
For many employers and job seekers, 2023 was a “big reset” (credit to fellow ERE Recruiting Conference speaker Jocelyn Lai of Duolingo for that term).
But I did promise some good news. While hiring slowed and layoffs increased, we are starting to see some stabilization and reasons for optimism.
Information employment is still below the peak, but we are seeing signs that the pace of job losses is slowing. The industry added just over 30,000 jobs over the past 6 months, compared to job losses totaling around 70,000 over the previous six-month period from May to October 2023.
The pace of new job gains for professional and business services and financial activities has leveled off. These industries are adding jobs at a very modest pace. On a month-to-month basis, this means that there might be job losses every few months. However, over a longer period, the trend has been positive.
This year kicked off with widespread recession fears; just a few months into the year, few economists predict doom and gloom. Those recession projections caused many businesses to put hiring plans on hold and even delay backfilling open roles. Now that we’ve had several months of stable job growth, businesses are starting to fire up the hiring engines and focus on expansion.
Stabilization and normalization might not seem exciting, but these trends and a more optimistic outlook for the remainder of 2024 provide a lot of clarity for business and hiring strategies.
