What the Latest Labor Data Means for Your Job Search
By Jeff Altman, The Big Game Hunter
This is a summary of an interview Andrew Seaman did with Karin Kimbrough, LinkedIn’s Chief Economist about the labor market and job search
The Warning Sign of a Problem or That They Aren’t Sure
- Hiring rates have been declining, with July seeing a 3% drop compared to June. This hiring slowdown is happening globally, not just in the U.S.
- However, the pace of hiring decline seems to be stabilizing, suggesting we may be reaching a bottom. There are signs things could start to improve soon.
- Job seekers are applying to 25-30% more jobs now versus a year ago, showing more active and intensive searching. This increased job search activity is seen in the U.S., UK, and Ireland.
- Some of this is due to people re-entering the job market after stepping away for a period. Job seekers also realize the market is more competitive than before.
- Overall this reflects a healthy rebalancing of the labor market compared to 2 years ago when it was severely imbalanced. There’s now 1 job for every 2 seekers, still a solid ratio.
- The labor market is undergoing a full rebalancing, so workers and job seekers need to be more targeted in their skills and applications. However, there are still opportunities to find the right role.
- Employers are being cautious about hiring and investments due to mixed economic data. Central bank interest rate hikes have put a brake on hiring.
- Inflation seems to be peaking and coming down in most countries. However, central banks will likely keep rates high for now until inflation is firmly tamped down.
- The labor market situation differs across countries. Some like India still have tight labor markets with lots of jobs, while others like the US and Mexico have more slack appearing.
- Certain sectors like government, education, healthcare, and consumer services continue to hire strongly based on demographic and pandemic trends. Tech and finance hiring has declined significantly this year.
- Overall hiring is expected to improve eventually once the full labor market rebalancing finishes. The current caution by employers likely won’t last forever.
- Employers have more bargaining power now with more job seekers and less open roles. They also want people back in the office for productivity, training, and to use office space.
- Hybrid remote work arrangements are gradually increasing, now accounting for 13% of roles. We may land at a “hybrid plus” model with 1-2 remote days per week.
- Americans have been more willing to move and desire remote work compared to Europeans like the French and Germans.
- Similarities across countries include tight labor markets before, inflation pressures, and low unemployment after the pandemic.
- Differences are how much labor markets have evolved, with the US and Mexico seeing more slack while India is still tightening.
- The job market will be more competitive than the last couple years, so workers need to stand out more.
- Industry hiring trends are changing rapidly, so workers should be open to switching industries.
- Skills remain critical, especially in a more competitive slack labor market.
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