Despite the numerous layoffs witnessed in 2023, the current job market surpasses the number of cuts. In this week’s episode, we cover various topics surrounding the state of the job market, including how employers are gaining more leverage during the hiring process and the importance of hiring employees who care about the mission.
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Let's dive into this episode's key topics…
The State of the Job Market
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- Unemployment has risen. As of April this year, the unemployment rate stands at 3.4%. Whereas as of October, unemployment is now at 3.9% (Bureau of Labor Statistics).
- The tech industry across the globe has seen about 450,000 layoffs between 2022 and 2023 (Layoffs.fyi). However, there are about 519,000 open tech jobs in the US alone (CompTIA), a decrease from about one million at the beginning of the year but still more than the number of global layoffs over the past two years.
- For the US tech sector, 998,000 people have taken new jobs in the last 12 months (LinkedIn Talent Insights).
- Tech professionals and salespeople have average tenures of 1.6 and 1.4 years, respectively, due to market volatility – layoffs, booms, downturns (LinkedIn Talent Insights).
- Despite significant layoffs, there are still more open jobs. This leads to a hypothesis that companies are changing their hiring approach, possibly seeking different skill sets from the ones they used to, in light of the slowed economy, high inflation, and advancement in AI.
- Between 2020 and now, what Pavilion is looking for in candidates has tightened. We no longer prioritize hiring less-experienced individuals or those transitioning from unrelated careers. We are keen on hiring seasoned individuals who can effectively utilize automation and maintain an overseas workforce due to little scope for hands-on training in a fully remote setup.
- You must also be passionate or interested in our mission to keep an employee motivated. Pavilion’s matrix is you have to be interested in what we do, you have to be interested in what you do, and you have to want to be great at what you do.
"Here's a list of my demands" - Every new hire in 2022
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- When the job market is hot, employees tend to demand more benefits from their employers. However, these demands decrease during a downturn due to job insecurity and difficulty meeting targets.
- Good candidates have always been scarce relative to need, and that market abundance might have made companies a bit negligent in their hiring efforts.
- However, generational factors are not a key issue. Instead, companies need to adapt hiring approaches to the current market dynamics.
Flip it and reserve it. We're going back to the office.
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- There’s a need to examine whether the current drive to bring employees back to the office is focused on productivity or restoring employee engagement and connection to the company's mission.
- Despite the initial surge in productivity at the onset of remote work during the pandemic, companies are expressing concern over apparent drops in productivity now.
- The pervasiveness of technology has made focusing difficult, potentially affecting productivity.
- Data was presented showing that only 32% of employees feel actively engaged at work (Gallup), with 28-35% feeling a solid connection to their company’s mission (Axios), suggesting that this is a significant issue across all companies, regardless of their remote or hybrid work policies.
- However, reduced work and increased free time might be the purpose of incorporating more technology into our lives.