There have been some interesting job data released over the last week indicating the challenging talent market is improving despite signs the economy is heading toward a tumultuous year. Here are three data points to consider as you develop your Talent Strategy for the remaining months of 2022.
The US economy added 431,000 jobs in March and the unemployment rate fell to 3.6% in March, according to data released by the Bureau of Labor Statistics on Friday. Employers added 431,000 employees to their payrolls in March, with private sector employers gaining 426,000 employees and the unemployment rate falling to 3.6%. The Labor Department said on Friday that the economy added about 431,000 new jobs in March, slightly less than most experts had forecast. The Labor Department released its March jobs report and said the economy added 431,000 jobs last month.
The percentage of Americans working or looking for work, the so-called labor force participation rate, rose to 62.4% in March, the highest since the early days of the still devastating pandemic in March 2020. March, which helped push the overall labor force participation rate — the percentage of Americans who are working or actively looking for work — to its highest level since February 2020. Data showed that more people are returning to look for work or taking a job after being laid off due to COVID -nineteen.
Real gross domestic product (GDP) decreased at an annual rate of 1.4 percent in the first quarter of 2022 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 6.9 percent. While employers continue to look for labor in a challenging market and deal with supply chain issues, the estimates for GDP growth for the remainder of 2022 is mixed with some economist hopeful the increase in hiring will help push GDP back to previous levels. A looming concern is the increasing inflation rate and fed rates as a result to inflation estimates. (See chart below)
What does this mean for recruiters
Good news first: the workforce participation rate shows the workforce is beginning to show some slight signs of relief as workers consider reentering the workforce. While many will cite the decrease in government subsidies as a possible reason for this increase but I hold a different opinion. Many organizations have finally begun to recognize the call for sustainable wages for the jobs posted which has increased the interest of talent previously on the bench. Additionally, the number of jobs versus the number of active job seekers has remained significantly out of balance providing job seekers more options to find roles that are not only of interest but at the pay rate they see as fair.
This leads to another good news data point. While economically negative, the decrease in the number of jobs added to the economy may actually give some of us in the recruiting world a bit of a break to catch up. Over the last few quarters, companies have added jobs at a rate recruiters, especially in organizations that stripped their recruiting organizations during the pandemic, could not keep up. As the workforce shows some signs of life and the number of jobs added to the market decrease, it gives some of us hope that we can take this opportunity to catch up to the extreme numbers of open jobs in our firms.
Bad news: companies struggling to meet profit targets may begin to pull back on the wage race we have seen since March of 2021. It would make sense that firms continue to pay the market rate for talent needed but reality tells us some organizations may retract in fear of a pending recession. This is the opportunity for talent professionals to work closely with their clients to provide real-time market data on talent interest and pay rates for the open roles. This will continue to get harder as the economy self-corrects.
Inflation has become a hot topic not only on the news cycles but also in the search for talent. While workers are slowly reentering the workforce, many are hyper-aware of the impacts of inflation on their net pay. This combined with company concerns over shrinking margins may cause another compression in the market as the economy shows signs of stress.
Many of us thought 2021 was going to give us some relief but we thrown more obstacles than we had anticipated coming out of the pandemic. It seems 2022 has its own bag of tricks. I would encourage everyone in the talent world to work closely with their clients to navigate through the choppy waters. The benefit to this mixed review of data could be positioning yourself as the business consultant who can help your clients win in a market that seems to stack the odds against them.
- Get helpful recruiting tips sent to you monthly!
- Read each chapter of the book Sprint Recruiting as it’s written
- Resources including graphics, reports and training
- Special Q&A sessions to learn how Sprint Recruiting can help you transform your Talent Strategy.