“The market is weird right now.” This is by far the most common phrase we hear when we ask candidates how their job searches are going. And they’re right - this job market is weird. In fact, the market volatility over the last 4 years has made it hard to remember a time when the job market wasn’t in a state of flux.
When the COVID-19 pandemic first hit in early 2020, shutdowns triggered economic uncertainty, and many organizations turned to furloughs and layoffs to try to save their bottom line. By the end of 2020, the economy was in a rebound, companies had pivoted to the new “remote world,” and “The Great Resignation” made headlines through 2021 and early 2022. By late 2022, news of economic uncertainty again made headlines, and in the last 18 months, hundreds of thousands of U.S. employees have been impacted by mass layoffs and corporate restructuring.
In the recruiting world, you’ll hear specific terms for how this economic volatility impacts hiring. We refer to the job market as being either “employer-driven” or “candidate-driven,” referring to the balance of power and the overall prevailing conditions within the job market. The distinction between the two can significantly influence the hiring experiences of both job seekers and employers, and in the last 4 years, the U.S. has experienced both a candidate-driven and an employer-driven job market. For the next few months, we’re going to focus our blog series on the current job market conditions, and talk through what candidates and hiring leaders alike might do to find success. First, though, let’s talk about the differences in these markets.
As the U.S. settled into the “new normal” of remote work in 2020 and 2021, companies realized that if everyone was going to stay home, they needed to pivot. There was greater demand for faster software and automation, for better self-service and delivery options, for additional healthcare technology and providers, etc., so companies started hiring. Skilled workers in high-demand fields started to receive multiple job offers, allowing them to be selective about where they chose to work - and they brought their friends along to their next company. The media dubbed this time “The Great Resignation.”
This time was the quintessential candidate-driven market - when there are fewer candidates available for the number of job openings, skilled workers have greater leverage and negotiation power. They have the upper hand when it comes to the job market. Some economic conditions that indicate a candidate-driven market include low unemployment rates, robust job creation, and specific skills shortages within industries experiencing growth or technological advancements. Companies generally have to offer new benefits, better pay, more flexibility, and other perks in order to stand out in the talent attraction and retention game.
On the opposite side, an employer-driven job market occurs when employers hold the upper hand in hiring decisions. Economic indicators that signify an employer-driven market include high unemployment rates, sluggish job creation, and a surplus of available talent across various industries. The volume of layoffs, slow job gains in formerly hot sectors, and the amount of available talent strongly indicates that the U.S. is currently in an employer-driven market.
As we look at the U.S. market today, layoffs have added more job seekers than available job openings, and competition between highly talented candidates is stiff. Employers have a wider pool of candidates to choose from, and they are setting specific requirements and being much more selective in their hiring processes. While we have seen some highly specialized candidates juggle multiple offers, it’s more likely that a company has more candidates than they can manage. We’ve heard stories of companies that are using the swing back to an employer-driven market to their advantage by cutting salary ranges and ancillary benefits, bringing people back into the office, and dragging out interview processes. If you’re a candidate in the job market right now, you might be experiencing some of these challenges.
We know that it’s a tough, weird market out there right now, and SymphonicHCM is here to help! In our upcoming articles, we’ll talk in more depth about the employer-driven job market from both the candidate and employer perspective, and share our perspective on what each side can do to prepare for when the market shifts again. Because if we’ve learned anything in the last 4 years, it’s that the job market will change.
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