The state of the labor market is a significant factor in how companies determine their talent acquisition and retention strategies. However, recent conditions demonstrate the low unemployment rates have remained consistent, while concurrently, there is news of layoffs across major U.S. companies. This is an unusual set of circumstances since companies cutting jobs would logically result in higher unemployment numbers.
Learn more about the paradox of layoffs and low unemployment and its implications for employers:
The Labor Market Conditions Differ Significantly by Industry
As of February 2023, the unemployment rate is 3.6%, according to the Bureau of Labor Statistics. The overall labor market remains tight due to the massive layoffs reported being confined to just a few industries. Employers in the technology industry, in particular, have been making cutbacks to staffing, along with the finance, real estate, and media industries. On the other hand, employers in other industries, including leisure and hospitality, healthcare, government, and education, are experiencing shortages in labor. The impact on employers will therefore depend considerably on their field.
Competition is Steep for Top Talent
Recruitment continues to be a major challenge for employers due to the low unemployment rate. Recent data shows 10.8 million job openings and 6.4 million hires, according to a March 2023 report from the Bureau of Labor Statistics. The demand for workers is high, and employers are at a competitive disadvantage. This means if employers want to attract and retain top talent, they must be strategic and willing to compromise on requirements or put in the time to upskill new and existing employees. This also holds true for employers in the few industries that have been hit with layoffs and will need to focus on being efficient with fewer employees.
Prepare to Negotiate
The tight labor market means that workers can command a higher salary and other valuable benefits and perks. If employers are not willing to be flexible with their job offers, they will find themselves struggling with vacant positions or mediocre candidates. In the past year, average hourly pay increased by 4.4%, according to January 2023 findings from the Bureau of Labor Statistics; therefore, employers must adjust their pay ranges to reflect the current market conditions to even begin to compete. To further stand out and appeal to the limited talent pool, employers are increasingly offering more paid time off, schedule flexibility, remote work options, and other perks.
Employers Have to Move Quick to Hire
Layoffs and low unemployment can coexist due to a quick turnaround in which workers who lose their jobs are rapidly hired elsewhere. Two-thirds of unemployed people landed new work within approximately three months, according to February 2023 data from the Bureau of Labor Statistics. The hiring process must be streamlined so employers can recruit and make decisions in less time before candidates accept job offers elsewhere.
Land Top Talent for Your Team
Find qualified candidates by working with The Hire Firm for your recruitment needs. With nearly three decades of experience in recruitment and staffing in New Mexico, The Hire Firm will find top talent who will be a successful long-term fit. Contact us today to learn more about our employer services.