If you’re looking for a new gig, be prepared to roll up those sleeves and do some homework. You might find yourself being more than a little confused by the current economy. Today’s job seekers, particularly those in tech, are in one of the most economically convoluted and confusing marketplaces we’ve seen in recent years.
To date, there are over 11.3 million job openings which, according to ComputerWorld, declares nearly two jobs for every person searching for work—equating to roughly 3.98 million tech industry opportunities alone.
So how did we get here?
Traditionally, companies have enacted hiring freezes and workforce cutbacks during times of economic uncertainty, and most workers stay put. However, as of March 2022, 8.6 million people quit their jobs. According to data from the Bureau of Labor Statistics, the number is close to the record pace set in 2021, a 20-year high (where nearly 48 million quit their jobs last year alone).
This is not normal recession behavior.
In fact, employers have been doing a lot to try to hang on to their existing workers by increasing wages, adding perks, and keeping layoffs at historic lows. If a recession is near, it’s one where employment doesn’t seem to be affected.
If a recession is coming, why are there so many job openings?
Job openings remain high partly because companies have struggled to remain fully staffed amid the Great Resignation. Right now, it’s very difficult to hire and retain employees. And employers don’t want a repeat of 2020—when companies laid off scores of workers only to struggle to rehire them.
“There is a tendency not to overcorrect, especially given the challenges organizations have had around hiring in just the last year,” Lexi Clarke, head of people at compensation data company Payscale™, said. “This is a time to be proactive and think about the long-term impact of [hiring] decisions related to talent.”
There’s also been a cultural shift that’s made quitting more palatable, as people now search for more personal perks like work-life balance, workplace amenities, meaning, and purpose.
Can employees use the hiring shortfall to get more money or better benefits?
It seems so. Not only are employers still hiring, but they’re also offering higher pay, perks, and signing/retention bonuses. ManpowerGroup’s clients, which include Fortune 500 companies, offer tuition reimbursement, remote work, gas subsidies, and four-day work weeks. This affects every industry, from tech to retail, and includes everything from health care to PTO.
The Society for Human Resource Management’s recent Employee Benefits Survey found that employers said every type of benefit (health benefits, retirement savings, paid leave, and flexibility) are more important today than before 2020. So, now is as good a time as any for workers to ask for better pay and benefits from an existing employer—or from a new one.
To quit or not to quit
An employee’s viability depends on their industry, qualifications, savings, and tolerance for uncertainty. So, it’s not a bad time to be looking for a new job.
Business-focused think tank The Conference Board discovered that while many company executives predict a recession by the end of 2023, they also say that attracting (and retaining) talent is part of their top long-term growth strategy.
So, while the high-profile layoffs, hiring freezes, and slowdowns at tech companies like Meta, Coinbase, Netflix, and Tesla are pivoting to deal with setbacks, these aren’t necessarily reasons to worry, since those only make up a tiny fraction of jobs in the economy.
According to Sean R. Gallagher, executive director at Northeastern University’s Center for the Future of Higher Education and Talent Strategy, “There are sectors that are just continuing to grow and structurally are going to need more workers.”
When do we get back to normal, whatever that means?
A lot of the recent weirdness about the current employment climate isn’t so much that the economy is tanking as it’s simply not growing as fast as it was, two drastically different metrics.
“For a lot of people, this slowdown, or return to normal, can feel more painful than the data suggests, just because we’d been at this breakneck speed of economic growth in 2021,” said Luke Pardue, an economist at payroll, HR, and benefits software company Gusto.
Trouble will arise if demand slows so much that companies are no longer selling enough to be able to continue employing people.
So far, that’s not quite happening.
About the Author
Vince Dorazio has 20+ years of experience in the recruiting and tech industry. He is currently the Founder & CEO of UpRecruit, a recruiting platform that intelligently matches tech talent to innovative companies. He has a passion for the start-up community and serves as a mentor, advisor, and board member to multiple SaaS companies and non-profits.