Since April 2020’s shock to the labor market when the private sector workforce shrank by 15 percent, levels of employment have been slowly recovering. But more than two years later, demand for workers far outpaces unemployed people looking for work. In May 2022 alone, there were roughly two open jobs for every unemployed worker.
According to the Bureau of Labor Statistics’ June jobs report, industries continuing to add the greatest number of jobs revolved around employers in professional and business services, concentrated in management roles, software development and office administrative services. These employers recorded 880,000 more jobs on their payrolls in June than in February 2020, the month before the pandemic. Jobs vulnerable to interest-rate increases and shifting construction habits, such as construction firms, transportation and warehousing also showed growth in June.
And while the talk of the Great Resignation has continued – the level of job quits this year is roughly double what it was a decade ago – many Americans are having second-thoughts about quitting according to a recent Bloomberg article. For those still on the sidelines, the sense of urgency to find work is ramping up with signs of inflation not slowing down and nearly half of job seekers anticipating the labor market to get worse before the end of the year.
42% of Americans who quit during the Great Resignation say the job they took since then hasn’t lived up to their expectations. This has led to what many are calling the Great Realignment, where workers come to grips with their relationship to work and employers respond with greater flexibility, benefits and pay.
The Competition for Talent
Finding talent has become like a chess match for employers struggling to fill their openings. According to ADP Research Institute recruiting data, overall job postings have surged and unique job postings for perks like remote positions more than doubled in 2021. ADP also found job posting word counts have been trending significantly upward in an effort to promote worker-friendly environments, while average years of experience required has declined from 5.8 years just prior to the pandemic to 4.3 years in March 2022.
Is Now a Good Time to Change Jobs?
The strong labor market stands in contrast to growing fears of a recession – a survey from MagnifyMoney reports 70% of Americans believe an economic downturn is on its way. Yet nearly all labor economists say it’s still a job-seeker’s market. While economists do caution workers not to quit their current job without another one lined up, Pew Research showed the average American who changed employers between April 2021 and March 2022 (a period of post-pandemic high quit rates) got a 9.7% bump in their real wages over a year earlier.
Should we go into a recession, the most likely immediate change in the job market is that workers will likely lose some negotiating power. The economists predicting a downturn in the economy in the coming year don’t expect unemployment to rise significantly, meaning workers still have the upper hand.
We continue to grow our pool of talent in the power, renewable energy and design/build markets. Contact us today to help ease the gap in your job openings.