Your Hiring Pulse report for September 2022
In August’s Hiring Pulse, we talked about how the hiring market has responded to all the noise around recessions, inflations, and other economic brouhahas. We also altered the dataset in a way that two of the metrics are now based on the date on which a job gets filled rather than when a job is opened.
For this month’s Hiring Pulse, we have more insights for you on all of the above, and in response to numerous queries we’re taking a deep dive into the SMB hiring trends specifically for the UK and Ireland.
Let’s take the plunge!
How we’re looking at data
First, looking at SMB hiring data allows us to see benchmarks in the hiring landscape. But when the benchmark changes regularly during these last two tumultuous years, it’s not the best measuring stick.
So, instead of looking at data YoY or even MoM, we’re looking at rolling trends. What we’re doing in the Hiring Pulse is looking at that month’s percentage increase or decrease compared with the average of the three trailing months. Want a more detailed methodology? Jump to the end and check it out.
As always, we look at the worldwide trends for three common SMB hiring metrics:
- Time to Fill (TTF)
- Total Job Openings
- Candidates per Hire (CPH)
Let’s start analyzing!
Table of Contents:
- Time to Fill
- Total Job Openings
- Candidates per Hire
- Deep Dive: UK and Ireland
- What’s going on here?
- The Hiring Pulse: Methodology
The three main highlights for this month’s Hiring Pulse are:
- TTF has significantly dropped in August – unlike in previous Augusts
- Job openings are normalizing more “normally” than either Candidates Per Hire or TTF
- Recession worries are still very real – but jobs themselves may not be hit as hard as feared
1. Time to Fill
For this report, Workable defines “Time to Fill” as the number of days from when a new job is opened to when that job opening is filled. It’s important to understand that definition: jobs that are still open as of the end of August are not included in this graph as they don’t yet have an “end date”. Only the jobs that are filled are included here.
Got that? Good. Let’s have a look at TTF based on jobs that have been filled from the start of 2020 through to the end of August 2022:
One thing that stands out: Time to Fill dropped dramatically in August, with a -3.4% change from the average of the previous three months. Last year, August’s TTF trend was nearly the opposite: 5.1%.
What accounts for this? In the northern hemisphere, where most of this dataset lives, it’s summertime – which means a slowdown in overall business and consequently a slowdown in hiring. And a slowdown in jobseeking as well, of course. Fewer candidates makes it harder to find candidates, and there are fewer people working in hiring teams throughout. Put all that together, and that explains the uptick in TTF – in other words, longer TTF – in August 2021.
This especially should be the case in 2022 with the world opening up again (to a degree), and many workers catching up on their pent-up vacation time. But, instead, TTF dropped in August. TTF is shorter this time around than in previous months.
Perhaps, the seemingly non-stop predictions of a recession made for a business slowdown, which coupled with the normal downturn in processes during the traditional vacation months, led to less work for a company’s active employees for these few months. This frees up bandwidth for employees to focus on some other important things at work.
Then, more time is spent on sourcing, attracting, and evaluating candidates – which speeds the process along.
And of course, when people quit en masse – as we’re still seeing in the US at the very least – there’s a tinge of desperation as employers rush to fill ongoing gaps in their workforce.
2. Total Job Openings
Total job openings represent the total number of job openings activated across the entire Workable network.
So, let’s look at the raw job open numbers – which aren’t contingent on job opened/filled dates like TTF and Candidates per Hire. These are just jobs opened in a given month – in other words, a single event – and are a great indicator of the health of the economy.
This one’s interesting. We’ve been writing a fair bit in previous Hiring Pulses about this thing called a recession and how that may impact our hiring metrics. We pointed to how July saw a change of -6% (now adjusted to -5.5% with data updates) in job openings compared with the three previous months’ average – and that this is unusual considering that previous Julys all saw a relatively opposite trend.
For example, as we showed last month, the job open trend for past Julys is as follows:
- July 2019: 7.2%
- July 2020: 49.5% (major caveat here, it being 2020)
- July 2021: 5.7%
And now, August’s job opening trend has sped up just a wee bit to -2.2%. It’s not something to scream at the rooftops about, but when we compare to previous Augusts:
- August 2019: 5%
- August 2020: 23% (again, remember, this is 2020)
- August 2021: 1.5%
Yes, all three previous Augusts were positive trends while this August is negative – however, the change isn’t nearly as significant.
The difference between July 2021’s 5.7% and July 2022’s -5.5% is 11.2 total percentage points, while for August last year and this year, it’s just 3.7 percentage points.
Last month, we said, and we quote:
“Do we want to be nervous? Should we be nervous? Well… recessions are normal. They do happen. And businesses will respond to that with more conservative projections and austere practices. Let’s watch this space and see what August brings us.”
Well, now that we can see what August brings us, maybe there’s cause to be not as nervous as previously.
Still… the doomsayers in us like to persist. Recessions don’t just happen in a month and go away. It’s a long game and businesses need to be mindful of that.
3. Candidates per Hire
Workable defines the number of candidates per hire (CPH) as, succinctly, the number of applicants for a job up to the point of that job being filled. Let’s look at what’s going on here through August:
Now, this is interesting. After all that fluctuation that we pointed out in the August Hiring Pulse, we now see a considerable spike in the Candidates Per Hire trend of 13.3% for the month of August.
If you overlook the “recovery” of hiring metrics in the wake of March 2020 – basically, when the big COVID truck hit many of us – this 13.3% marks the biggest positive trend in our data for any month in 2019, 2020, 2021 and 2022 to date.
Surely, this must be somewhat normal for this time of year, you suggest.
News flash: no, it actually isn’t, not according to the data.
Check out what the CPH trend for June, July, and August looks like over the past four years:
Last month, we saw how the data for the three previous months of May, June and July made it pretty clear that 2022 was in a state of relative normalization, with the trend somewhat comparable to the last year before COVID – that being 2019.
But now, this isn’t the case at all. There are more candidates per job in August than previous. And the last time we saw such a monumental spike in the CPH trend was in the exceptional months after March 2020.
While we’ll write off those early COVID months as anomalous, it’s worth mentioning that those months were also months of desperation; there were many candidates out there in the wake of mass layoffs, and they were scrambling to find new work.
This time isn’t so different. Under the lingering shadow of a “maybe” recession, layoffs also surged. Couple that with just-quit workers from the Great Resignation feeling nervous about the road ahead and thinking it might be smart to get back into full-time work before the well runs dry, and we have a situation where jobseekers are no longer at a premium but now potentially becoming a surplus.
Deep dive – UK & Ireland
In the last few months, we’ve received a few inquiries: “All this Hiring Pulse stuff is great and stuff, but do you have any data specifically for those of us in the UK?” Well, we heard you and we’re taking action right now.
So, in this month’s Deep Dive, we look at these three hiring metrics specifically for the UK and Ireland (UK&I).
While we know that you’re interested specifically in UK&I metrics – it helps to see how that looks against the overall data. So, we’re adding an extra line for the overall data in each of the three charts.
Let’s dive in:
1. Time to Fill – UK&I
Let’s first look at the Time to Fill trend:
When we look at the Time to Fill trendline for UK&I, it runs along a similar trajectory as the world trendline – unsurprising, to be fair, considering that the UK is home to the world’s fifth-biggest GDP (the U.S., China, Japan, and Germany being one through four) and thus, wherever the world’s economy rolls, the UK shall roll with it.
Ireland’s own economy is smaller as a whole, of course, but its GDP per capita is more than twice as much as that of the UK, and the fifth largest worldwide – so it has a presence in this data as well.
Now, if you really want to get geeky when comparing the area-specific data against the whole, let us help by pointing out two major areas where the trends differ: March through October 2020 and, yes, the last three months.
First, for UK&I’s data, we see considerable fluctuation for March through October of 2020 with a 4% uptick in April 2020 compared with a relative flatline of 0.01% for the overall CPH trend. Then, UK&I plummets considerably more so than the overall, falling to -9%, -14.7%, and -18.6% in TTF for May, June, and July 2020 compared with -6.2%, -8%, and -9.7% overall.
But then, UK&I recovers just as dramatically, rising to 3.2% and 5% for August and September 2020 with a minor -1.4% hiccup for October before falling back in line with the overall TTF metric, which saw steady recovery of -3.5%, -1% and 4.7% for those three months.
The difference in the last three months isn’t nearly so dramatic, but still worth noting because it’s just happening now: the divergence starts happening again in June 2022 with a -2.6% drop in the trend for UK&I compared with 1.5% overall.
Then, for July, we see a 3.3% uptick for UK&I compared with 0.4% overall, followed by August’s -0.7% for UK&I and -3.4% overall.
2. Total Job Openings – UK&I
Now, let’s look at job openings themselves:
For the most part, the trend for both the UK&I segment and the overall data more or less follow the same path upwards and downwards every month – but the fluctuation of the last couple of months is eye-catching.
June saw a -15.5% change in job openings in the UK and Ireland, compared with -9.6% worldwide, followed by 3.4% versus -5.5% for July, and finally, -9.5% for UK&I in August compared with -2.2% overall. Job openings are down quite a bit in UK&I compared with the rest of the world.
Pretty big differences, honestly. Does it mean anything? Not necessarily if it’s just happening for a few months as fluctuations do occur, but it’s worth watching.
3. Candidates per Hire – UK&I
Now, let’s look at the Candidates per Hire trend for the UK and Ireland:
One thing that the UK has been dealing with on top of COVID-19 is, of course, Brexit. As it happens, Brexit became official to a degree on January 31, 2020. At that time, the virus was certainly on the horizon but hadn’t hit the UK’s shores yet.
But now, the double whammy of the pandemic’s onset with the reduced options for working abroad for many Britons after Brexit is readily visible here, with the CPH metric spiking massively in Q2 of 2020 – the most obvious one being the stunning 54.5% jump in the trend for June 2020 compared with just 14.6% overall.
We don’t intend to ignore Ireland’s numbers – but in this case, with the UK’s much larger population, it’s almost certainly Brexit that contributed to this discrepancy.
Workable’s CEO, Nikos Moraitakis, told us in an email in the early days of the pandemic that books would be written about this time for years going forward. In that spirit, there will be – and already are – books written about the UK’s own unique economic experience in 2020.
What’s going on here?
Let’s wrap this up with a quick overview of the UK job market and then the US job market. First, according to latest data from the UK’s Office for National Statistics (ONS), July is showing full recovery and then some for payrolled employees, with an all-time high of 29.7 million employees making some level of income.
Now, the US Department of Labor reported last week that there was a gain of 315,000 jobs in US payrolls to an all-time high of 152.7 million employees – just a touch higher than the pre-pandemic high seen in February 2020.
Does this mean full recovery to pre-pandemic levels? Well, yes, kind of. And does this mean no worries about recessions?
No, absolutely not.
Sorry to break your balloon, but the worries of a recession are still very real. A good portion of those worries revolve around the housing market, with Goldman Sachs predicting a considerable crash in real estate to the end of 2022 and more so in 2023, bigger than Russia’s overall GDP crash since their invasion of Ukraine.
Likewise, analyst Ivy Zelman, otherwise known as “Poison Ivy” after predicting the 2008 market crash, is predicting another drop in housing over the next couple of years. We all know what that meant in 2008 and 2009 – a tidal wave leading to catastrophe in other economies.
But Liz Ann Sonders, chief investment strategist at Charles Schwab, had this to say about the surge in jobs and the worries around recession:
“This is a unique period of time, where we have, still, a relatively tight labor market, where there is still job growth, but companies have started to announce hiring freezes, some companies have announced layoffs,” she said.
“This could very likely be a recession where you don’t see the kind of carnage in the labor market that you see in most recessions.”
At no other time has there been such a surplus of jobs (two job openings for every one active candidate, according to DOL data). Couple that with inflation and higher salaries, and candidates have a very powerful deck to play with.
So, the job market remains active. Many employers are desperate to hire, and this trend may not quieten down anytime soon, even with layoffs and recessions. If there’s a downturn, it’s going to happen in economic pockets – not across the whole spectrum.
Thoughts, comments, disagreements? Send them to [email protected], with “Hiring Pulse” in the subject heading. We’ll share the best feedback in an upcoming report. Watch for our next Hiring Pulse in October!
The Hiring Pulse: Methodology
To bring the best insights to small and medium businesses worldwide, here’s what we’re doing with our data: when looking at a specific month’s trend, we’re taking the numbers from that month and comparing it to the average of the three previous months – and showing as a percentage how that month looks in comparison.
For example, if July shows an average Time to Fill of 30 days for all jobs, and the monthly average for the three preceding months (April, May, June) is 25 days, we present the result for July as a 20% increase.
The majority of the data is sourced from small and medium businesses across the Workable network, making it a powerful resource for SMBs when planning their own hiring strategy.