As an agency recruiter in the financial services space, I have seen first hand this changing market sentiment and I wanted to share some personal perspective on the current state of the job market, and where I think it is headed for the rest of 2023.
Where we are:
The latest unemployment data shows the current unemployment number at 3.6%. This is up .2% from last month, but is still historically low.
However if you were to talk to a recruiter or job-seeker right now, they would not tell you that this job market is fruitful. It's actually been quite difficult.
I am seeing candidates and companies both become extremely hesitant on making a job move. Larger firms are scaling back their hiring spend. I have had two of my largest clients in the banking industry just this week tell me that they are stopping all hiring through agency recruitment firms to cut back on costs.
The headlines around the banking crisis over the last two weeks with SVB and other regional banks have added concern to the already existing narrative of a recession taking place in 2023.
While the economic data does not support a recession (consumer spending strong, unemployment low, GDP growing) - we seem to be talking ourselves into a recessionary environment.
This growing negative sentiment of the job market has also brought concern to candidates committing to making a job move.
I have seen more turned down offers in Q1 of this year than all of 2022 combined. Even when we see companies willing to hire, it is becoming increasingly difficult to get candidates comfortable to make a move, for the fear of being "the low man on the totem pole" if and when the prospective company would need to layoff a percentage of their workforce.
The Federal Reserve announced this week that even in the face of the banking liquidity crisis we just encountered, they are moving forward with another .25 rate hike for the Fed Funds rate.
This implies that the Fed feels comfortable that the banking issues are resolved, but also shows their commitment to attacking inflation that we are still seeing in the economy.
The continued raising of rates will hurt borrowing power for larger companies, and will continue to slow their ability to hire. That is partly the goal of the Federal Reserve currently - they need to see unemployment rise in order to feel better that inflation is coming down. They need to see the economy cool.
Given where the Fed's policy currently stands, and the sentiment I am seeing around hiring, I believe we will continue to see a difficult market for job seekers through the next 3-6 months.
Advice for Job-Seekers in this Market:
If you are serious about wanting to move out of your current role - you will need to work 2x as hard as you did a year ago.
The key to this market will be to first leverage your internal network. Who do you know at the companies you want to work at? Who do they know that they can connect you with?
On top of leveraging your existing network, leveraging LinkedIn and connecting with new industry professionals will be another great way to help build your chances in making a move.
As a reminder - always "add note" to any LinkedIn connection request you make. Just clicking connect, and crossing your fingers they respond is not enough. Show your interest for their background and company, introduce yourself, and be specific on how you want to add value to that connection.
I have been covering the job market closely for 2 years now. One thing I have come to learn is that it's extremely dynamic. Although the market is currently challenged, it can switch quickly back to a candidate driven market based on a few strong economic reports or policy changes.
Continue to network, stay informed, and be ready when the right opportunity presents itself. The rest will take care of itself!