The current employment landscape:
April's most recent jobs report showed a 3.8% unemployment rate and 9.9 million open jobs.
However, if you talk to any job seeker or recruiter or for that matter, they will not tell you the job market is strong right now. In fact, they will tell you it's quite painful.
But how can that be? There's so many open jobs and unemployment is so low!
The answer lies in our current views on the hiring process.
I have seen it first hand in my role as a recruitment consultant. When a firm has an open position or hiring need, they will reach out to me to fill it.
When I ask them about what the right candidate for this role looks like, it is almost always an incredibly specific, narrow candidate profile. From the specific industry, company, segment within that company, to the specific job title and time in role they have had.
Once I hear the extremely specific candidate required for the position, I always have to break to them the glass-shattering news...
There is no such thing as a perfect candidate.
Every single candidate I have placed has had some matching qualities or experience that job posting was looking for. But never 100% of them.
The hiring managers that recognize this and lean into it, are the ones that actually make the hires. The clients of mine that don't... well, they're still wondering why they haven't filled the role in 6 months of searching.
But where does this hiring bias come from?
Why we can't hire:
It comes from the fact that unfortunately, when it comes to hiring and training, we're lazy.
It takes time and effort to train someone up. It takes us away from our busy lives and jobs and makes us display patience in teaching new hires how to perform the job as we see fit.
Kyle Scanlon recently posted an excellent video on TikTok talking about this exact topic.
Check it out here:
George Anders is the Senior Editor at large and he publishes great work on the economy and job market. In his latest piece he put the spotlight on "skills-based" hiring vs. the experience based approach that has become the standard in the U.S., especially for white-collar jobs.
George and the team at LinkedIn did analysis showing that if hiring standards shifted towards a skills based approach, it would dramatically open up the candidate pool for roles, and ultimately fill positions.
Anders writes, "the LinkedIn analysis shows that a skills-based approach still could expand the pool of potential candidates by a factor of 13.5." This would undoubtedly accelerate the rate of hiring, and help fill the 10 million open roles we currently have in the U.S.
The current state of the economy
There is no doubt that the shaky start to the year economically has contributed to the slow down in hiring.
The tech industry alone has seen well over 100,000 layoffs that have still not yet shown up in the unemployment data completely due to the severance packages and unemployment perks that were attached to those impacted.
Although we have seen mass layoffs, and stubbornly high inflation, (most recently coming in at 4.98%) companies in certain sectors have still remained strong given the macro-environment. Earning these past weeks came in much better expected, especially for firms such as J.P. Morgan and Amazon.
Given this uncertainty of which direction the economy is headed, companies have been slowing down hiring processes. Not necessarily stopping hiring, but they are taking much, much longer to make decisions.
Ultimately this slowing hiring trend will eventually go by the way-side once companies who are in need of hiring lose candidates to other firms who are willing to hire and take action. No one can know with 100% certainty if we are truly headed into a recession, but the firms that are in growth mode and willing to take the risk in the short term will come out in the long run if they can win talent.
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