11/05/2024
The Job Market "Perfect Storm"
For anyone to understand all that goes into a job search, you must first understand how the job market works. It is a complex and ever-changing set of rules and criteria. In the past few years, we’ve seen ChatGPT and AI begin their inroads into this market, never more than in 2024 with AI rewriting resumes and automatically applying to jobs. Both are being used by companies/recruiters and by job seekers to write job descriptions, write interview questions, design, and reformat resumes. LinkedIn uses AI in how it displays results in a search result for recruiters. Some job seekers have even developed skills to allow AI to bulk apply to jobs with bulk configured resumes to match the job posting. It’s all amazing technology, but remember that PEOPLE get hired, NOT technology.
The job market is no different from any other business model in that it is a supply and demand (jobs and candidates) driven business. The question has always been, are we in an Employer driven market (fewer jobs / more candidates) or a Candidate driven market (Fewer Candidates / More jobs)? The job and success of recruiters/consultants/advisors depend on knowing, or anticipating, these markets and their impending shifts. Let’s look at the basics.
A Candidate driven market is simply when there are more vacancies (job openings) than qualified job seekers. The best candidates are getting multiple interviews and offers and finding work more easily. They can pick and choose between multiple job offers. One concern for Employers in this market is that Candidates, being in the driver’s seat, will not accept a long / drawn out interview process. If the interview process takes too long, or requires too many tests, writing action plans, 30/60/90s, they will not even participate.
An Employer Driven Market is the opposite, where there is an abundance of qualified candidates competing for a low number of vacancies (job openings). During an Employer driven market, the emphasis shifts to the selection/rejection process due to an increased number of applications. This is where technology is widely used to w**d out unqualified applications without human interaction. The Applicant Tracking System (ATS) is used to bin-bucket qualified versus unqualified applications and automatically reject the unqualified. Employers get very selective on skills, work history (gaps and long-term unemployment) and basics like typos in resumes and consistency with LinkedIn profiles. They are looking for higher quality overall, rather than the ‘blanket’ approach. They have openings but will only fill them with a perfectly fit candidate. They can take their time with the interview process and make candidates spend time and effort producing projection reports, sales challenges, and even working for free for a day.
ENTER the COVID years. Over a hundred million people lost their jobs or saw their working hours reduced due to the COVID-19 pandemic (114 million in 2020 alone). Some estimates of working hours lost in 2020 were equivalent to 255 million full-time jobs, leading to $3.7 trillion in lost labor income. After COVID and over the several years following, there was a blurring of these two markets (candidate vs. employer), call it even a "merging" like never seen in the past. I called it a “Perfect Storm” of recruiting.
This is a market (that I believe we are fully in today) that has employers and job seekers both thinking they are in control and honestly, it’s proving that they are both correct. Here’s how it breaks down.
Job Seekers/Candidates now have higher standards and have rethought what is important to them. Company culture is no longer Foosball and ping-pong or all-day sushi, but more quality of life, flexibility in work hours and remote WFH (Work From Home) considerations. When the lock downs happened, some companies did well, and others failed. Some business winners supported each employee, while others supported their bottom line and left the employees to fend for themselves. Those actions are not soon forgotten. Job Seekers are using AI platforms to rewrite their resumes to make them perfect matches for job posting and then apply in bulk therefore beating the ATS filters set up by most recruiting companies.
Companies/Employers today have a different mindset, too, and they are rethinking how they hire. They have openings but will only fill them with a perfectly fit candidate. They are watching their spending very closely (as they should) and have high standards on adding to their teams. They would rather leave a position open (you can read my blogs on how much this costs a company), rather than fill it with a less than perfect hire. Their interview process is often slow, intensive, and in some cases, frustrates the candidate to where they pull out and move quickly along to the next opportunity.
What about the new RTO demands? Let's talk a minute about RTO (Return to Office) and how it might just be a "soft layoff" or easy way to reduce the workforce. There are quite a few reports that 90% of US companies plan to implement return-to-office policies by the end of 2024. Flexibility still remains a top priority for employees so Houston, we have a problem! The goal of some companies is to target the "quiet quitters" and those with opportunities elsewhere by making the current work environment unappealing. RTO is a cheap and unfair way for companies to avoid legal complications and financial obligations associated with layoffs. Some of these obligations include severance packages and unemployment insurance, which companies don’t have to provide if employees decide to leave on their own. What happens legally to an employee that quits or is fired for not complying to company policy. It's not real clear and each employee in my opinion has a different legal position.
BUT WAIT, THERES MORE: From 2022 through the end of 2023, more than 250,000 tec jobs were cut from Meta, Salesforce, Google, Stripe, Twitter etc. and almost 130,000 jobs in 2024 already but my bet is it will top 2022 and 2023 combined.
It’s a mad mad World right now! I’m glad I’m here to help you navigate these turbulent waters!
