What Employers Can Expect from a Slowing Job Market

It’s no secret that the COVID pandemic has had a dramatic impact on the job market across industries over the last few years, but, according to two articles from the Boston Business Journal, it appears the market may be entering a new stage that could have significant and widespread implications for employers and candidates alike.

Causes and Effects of a Cooling Market

The job market, which drastically tightened in recent years due to the pandemic’s amplifying effect on the already-considerable impact of shifting workforce demographics, now shows some signs of loosening.  At the end of February, the number of open jobs reached 10 million, a low that hasn’t been seen since May of 2021. This is in part the result of efforts on the part of the Federal Reserve to combat inflation by cooling the job market.  However, despite high-profile layoffs by prominent companies, increased caution by employers rather than a soaring layoff rate seems to be the driving factor of this cooling.  While the layoff rate slightly decreased from January to February of this year, Richard Wahlquist, president and CEO of the American Staffing Association, notes that “client companies are being more measured and strategic than they were last year at this time when it comes to adding… staff due to the uncertainties surrounding the economy.”

Caution on the part of employers additionally appears to be sparking a comparable trend on the part of candidates. According to the operational president of Robert Half International Inc., Dawn Fay, candidates are in general “making sure they’re being really well thought out about the change they’re making” in response to increased employer caution and layoffs.

What Does This Mean for Hiring?

These larger shifts and trends are beginning to have specific and granular impacts on expectations and norms on both sides of the hiring and recruitment process.  Some key shifts to be aware of are as follows:

  • Employers are trending away from remote and hybrid work, at least for new hires. While social distancing mandates earlier in the pandemic necessitated fully remote work in many cases, these days companies are increasingly pushing for a partial if not full return to the office. This is especially true for new hires, as many employers feel that in-person onboarding is far more efficient and successful than remote.
  • Employees have mixed reactions to the prospect of returning to the office. Reactions to returning to the office appear to be divided. While some employees express regret over accepting positions that are now requiring them to commute to work, some remote workers report that they miss the camaraderie, network, and opportunities for professional development associated with the physical office environment. 
  • A more measured, thoughtful interviewing and hiring process is replacing the frenzy and flash of recent years. The slightly cooling job market has provided HR professionals increased capacity to conduct more thoughtful and conservative interviewing and hiring processes, since there is less immediate pressure to act impulsively or include extravagant incentives, such as high sign-on bonuses.
  • Some COVID-era changes are here to stay, but not all. The pandemic prompted and accelerated an incredible amount of change in the workplace. While some COVID-era shifts, such as increased emphasis on and resources provided for employee health and wellness, seem to be here to stay, others, such as work-anywhere options and aggressive bonuses, may be on their way out.
  • Candidates seeking fully-remote positions will be competing for fewer opportunities. A dwindling number of fully-remote positions means that candidates for whom remote work is a high priority may have to either anticipate increased competition for such roles, or manage their expectations around workplace flexibility.

If you’d like to further discuss job market fluctuations and their impact on your hiring and recruitment, a Harger Howe Account Manager would be happy to speak with you. If you'd like to learn more about Harger Howe Advertising and our suite of services, please reach out to our President Mike Walsh @mwalsh@hargerhowe.com.