Despite recent headlines of high-profile staff cuts and a looming recession, the job market continues to be ‘burning hot’ for workers calling their own shots, says Julia Pollak, chief economist at the job-search site ZipRecruiter.
The labor market posted 11.4 million job openings in April, according to the Labor Department’s latest Job Openings and Labor Turnover Summary — almost twice as many as the number of unemployed job-seekers. And the Great Resignation is as strong as ever at the one-year mark, with 4.4 million people voluntarily quitting their job within the month.
Layoffs, meanwhile, reached a record-low of 1.2 million in April, whereas before the pandemic, employers let go of roughly 2 million workers each month.
Another way to show how employees are leveraging the market: In early 2020, roughly 40% of all separations were initiated by the employer. Now, that number sits at just 20%, and quitters are moving on to new jobs with better pay, perks and working conditions.
Overall, Pollak tells CNBC Make It, the job market remains “remarkably resilient” even as layoff, inflation and recession concerns make their rounds.
“The labor market is enormous, and you can always find exceptions to the rule,” Pollak says. “But the rule is that we’re in the tightest labor market on record.”
High-profile layoffs are the exception to the rule
In recent weeks, companies including Uber, Microsoft, Twitter, Wayfair, Snap and Facebook-parent Meta have announced hiring slowdowns or freezes, while other companies like Netflix, Peloton and Carvana pointed to lackluster consumer demand and high inflation to justify fresh layoffs.
However, Pollak says, layoffs and hiring freezes in small segments of the labor market aren’t showing up in aggregate numbers. The demand for tech workers remains high, and Pollak expects those laid off will be snatched up quickly by recruiters.
Recent tech layoffs are notable but don’t capture the bigger picture of consumer demand recovering from pandemic lows, Pollak adds.
“Away from Silicon Valley and Wall Street, Main Street is strong,” she says. “Restaurant dining, air travel and hotel stays are soaring. We’re seeing a return of business travel, large-scale events and concerts. Most of the country is trying to re-staff and hold onto workers to match that demand.”
Workers get more money, training
Workers are continuing to leverage their “enormous bargaining power” for better jobs in today’s market, Pollak says. According to a ZipRecruiter survey of people who started new jobs in the last six months, 41% gained more schedule flexibility and 14% gained ability to work remotely in their new roles.
Job-switchers generally see the highest wage growth, though Pollak says more people are getting raises in today’s market, including job-stayers, public-sector workers and unionized workers renegotiating their contracts.
According to ZipRecruiter’s May index measuring job-seekers’ confidence, half of all employed job-seekers say if they resign, they’re confident their current employer will make a counter offer with more money to get them to stay.
Some companies are being proactive about giving out raises to avoid those resignations in the first place. Google, Amazon and Microsoft and Apple recently announced pay increases in a bid to retain and attract talent.
Others are reducing their hiring requirements, like years of experience or educational background, in order to expand their talent pool, which Pollak says can benefit historically marginalized workers including women and people of color. “In these extremely tight labor markets, employers become less discriminatory as they’re desperate for talent, and they open their doors to candidates they may not have seen before,” Pollak says.
These employers are also likely to invest in more training, management development and mentorship.
Overall, employers are managing to fill just 58% of job openings in a given month. “Even when companies experience difficulties rising input prices, or hiccups in demand, they’re holding onto the employees they have for dear life, because they know how costly and how long it’ll take to replace them,” Pollak says.
Could a recession be looming?
A tight job market and high inflation, among other factors, have some people worried a recession could be on the way.
Pollak says the Federal Reserve has a tough job of figuring out a sustainable path forward “after an icy cold 2020 and a burning hot 2021” to bring down inflation and narrow the gap between supply and demand through monetary policy.
For now, she says, “the broad picture is one of a vibrant and dynamic labor market, where there are 63% more job openings compared to pre-pandemic levels.”
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