Even with the looming danger of a full-scale recession, as seen by record high mortgage rates and falling consumer spending, the job market’s strength has continued to act as a buffer. Despite massive layoffs in the tech sector, according to experts, there are employers planning to hire in the coming months as opposed to reductions in force.
Cody Harker, Head of Data Insights at Bayard Advertising – a full-service recruitment advertising agency that focuses on talent attraction, employer branding and recruitment – recently shared with HR Daily Advisor that employers are less worried about potential layoffs and more affected by the search for skilled workers.
In this Q&A, Harker discusses why Q1 remains the biggest time for hiring year-after-year, the state of modern hiring practices, and gives his predictions on the future of the labor market in a recession.
Here’s what he had to say.
When is the best time to hire new talent?
CH: Historically, the best time to hire is the month of January. While different industries and roles will see some variation, jobseeker interest can generally be expected to peak after the holidays as people buckle down again and resume their job search. Similarly, we also often see a somewhat more subdued uptick in job searches around September as many workers return from their summer vacations. But while the pandemic has forced employers to reconsider even basic assumptions around hiring practices, January remains the best time to acquire talent.
What are the advantages of hiring in Q1 vs Q4?
CH: Thanks in large part to consistent January surges in jobseeker activity, Q1 hiring campaigns will almost always be cheaper and more efficient than equivalent campaigns in Q4. Jobs posted in November and December tend to attract less attention simply because so many Americans pause or slow their job search for the holidays, only to pick back up in January. February and March also tend to be strong for job traffic, even as that motivation wanes. So, on balance, Q1 hiring is much more likely to yield not only a greater number of applicants overall but also lower application and hiring costs as well as reduced time to hire.
What are some best practices for filling a job vacancy?
CH: In 2023, the most effective strategies for filling job vacancies are, in many ways, the same as they were a decade ago. A combination of competitive pay and compelling core benefits are still the first things jobseekers want to see, especially given the turbulence that has defined the U.S. economy since the start of the pandemic. With an average of fewer than two workers available per job opening, offering better pay than competitors is paramount, even as this historically tight labor market begins to loosen.
Today’s job seeker is also particularly interested in flexibility. While fully remote work is still very much in demand (especially among women with childcare concerns and Baby Boomers, as well as workers with disabilities), younger workers appear increasingly motivated to spend more time in the office. With more and more employers finding a balance between fully remote roles and a return to the office, organized hybrid employment could offer the best of both worlds for companies and roles that can accommodate it.
Finally, today’s jobseekers value opportunities to develop their skills and careers. Whether that includes leadership development, career coaching, or access to pathways for advancement, featuring these growth opportunities in a job posting can tip the scales in an employer’s favor when wages and flexibility are also competitive.
Even with the recession and inflation looming, the job market remains strong. What are your predictions for how it will move through the rest of Q1 and 2023?
CH: While a still-robust labor market could soften the blow of a potential recession, economic headwinds are already slowly eroding its foundation. So far in 2023, we have seen the balance of power shift back somewhat into the hands of employers—a trend likely to continue until macroeconomic conditions improve. High demand for labor as the economy recovered from shocks in 2020 left workers in a position to negotiate better pay, but that demand is easing as companies shed workers and tighten their belts by imposing hiring freezes in anticipation of an economic downturn.
We expect labor demand to continue to slip through the rest of 2023 as employers shift their spending from hiring to optimizing and restructuring their organizations. Job switching, which has already chilled significantly since last year’s peak, will continue to decline as wages moderate and the unemployment rate likely creeps up.
Higher labor supply will improve hiring conditions and create opportunities for the many employers with vacancies to fill, but several jobs (particularly specialized roles) will continue to be very much in demand. Staying competitive in terms of pay, benefits, and job flexibility will give forward-thinking employers an edge both in the short-term as they seek to attract displaced talent as well as on the other side of a potential recession when they need to retain that talent and grow. If the economy does dip into a recession, it’s likely to be shallow, and employers may find themselves at a disadvantage if they shed too many workers or if their workers, feeling disenchanted, jump ship for better pay and working conditions when it’s over.