Get Ready For a Bumpier Ride – What October Job Numbers Tell Us

Well: here it is. A likely preview of the types of labor reports we’ll be seeing over the coming months. Not so much the exact same numbers, per se, but really more something we should be used to by now. The once-antithetical becoming normal reality. And talent acquisition continues to confuse. Case in point: we’re still desperate to hire, even as we lay people off.

The Numbers

Here’s the raw data for September. According to the DOL’s September Jobs Report, the US economy added 261,000 jobs in October while the unemployment rate rose to 3.7%. That’s up a tic from September’s 3.5% – the lowest rate in 50 years – and still considered historically low. Economists had expected a smaller rise in the unemployment rate, to only 3.6%.

In recent months, job growth has downshifted from a robust average monthly pace of more than 400,000 for most of this year to about 290,000 the past three months. The unemployment rate has been kept low by persistent worker shortages. (That, and a recruitment market that often feels like a game of whack-a-mole, one where the moles can turn into ghosts the moment you make contact with them). This, in turn, has led companies to avoid layoffs on fears they won’t be able to fill openings when the economy bounces back.

That may be changing. New job creation is at the lowest in a year-and-a-half. Layoffs are starting to become hip again. And we’re hearing reports that interview processes are being deliberately slowed by hiring managers who, just a scant few months ago, were willing to accept “can fog a mirror with breath” as an acceptable minimum qualification.

This is where it gets a bit weird. While there are rumbles of slowing job creation, and a loosening labor market: we’re still dealing with historic numbers in both categories. Critical skill-shortages will continue to keep labor shortages in the news, side-by-side with layoff reports. Talent acquisition leaders will find themselves with whiplash.

into the storm

Consider Forrester’s Predictions 2023: Future of Work report. The research and advisory firm envisions a coming hurricane for talent professionals as we enter into what looks to be a  “a perplexing, talent-constrained recession” in 2023. Forrester VP and principal analyst Katy Tynan adds:

“The demographic changes that underpinned the “great resignation“ and the ongoing impact of COVID-19-related absenteeism will continue to constrain the talent market in a tight economy. The outcome is a bullwhip effect in the talent market: Actions that respond to a constraint create an overcorrection in the other direction, keeping the market out of balance. We are navigating uncharted waters. Some of the things that organizations would expect to do and get good results out of will actually have the opposite effect.”

What this means, team, is that we never got around to really addressing skills. Skills needed for roles that are mushrooming to address an economy that is radically different than the one we had just a few years ago – and part of that radical change is the ability to keep changing geometrically. Lacking a more nimble approach to how we find the skills we need when we need them, we find ourselves with some pretty damn dry talent pools. Ones where we’re all fighting each other for the remaining fish. It’s not sustainable – somebody has to starve for somebody else to eat.

To address this, employers, talent acquisition leaders, product firms, heck, the government have to start to move together in lockstep to discover solutions. Because we aren’t there yet – and that’s going to keep hurting us as this new weird economy moves along. If we don’t, we face a sort of near-term dystopia: one where a small group with the right skills continues to thrive, and a majority move into a limbo of gig work, unemployment, seasonal roles, etc to survive.

Employers dig talent with skills

Understandably, companies cannot be expected to function as charities – they will continue to need appropriate talent. That said, we do need to manage through the near-term. Labor unbalances, with people who find themselves

We recommend forward-leaning talent acquisition leaders across sectors connect into working groups with actionable items as outcomes. Work out the steps to take to move past the theoretical to the practical. Answering questions around how to manage skills transformations where possible, while understanding that some communities and locations simply cannot shift rapidly to new industries. How do we develop the former, while finding solutions that provide meaningful labor to the latter? What should our education system look like in the future? Is the current skills development model broken? And, what does a balanced labor force truly look like – how do we measure success?

For a long, long time, talent leaders have requested to have their voices heard – and now, we have much to say, and a little time to say it. 2023 looks to be wildly complex series of storms around talent and hiring. We will  need to manage to continue to keep our fleet afloat, concurrently steering our ships to new harbors in search of more navigable waters.

Authors

Martin Burns

Martin Burns is a former Managing Editor & Analyst for RecruitingDaily.com. Referred to as someone who’s “kind of done it all in recruiting”, Martin Burns is a talent acquisition practitioner as well as commentator. For the past three years, he has been reporting on and analyzing news that impacts the TA industry, first as founding Editor at Recruiting News Network, and now as Managing Editor of RecruitingDaily. Prior to this, his career has included leading, as well as consulting with, talent acquisition organizations for some of the world's most significant brands. He speaks at global conferences on talent acquisition, maintains an active presence in the global recruitment community, and generally has fun mucking around in the conversation the industry has in who it is, and where it’s going. His industry-leading Facebook group “Talent Product Plays” is considered a must-join by practitioners and vendors alike.