The Strength and Resiliency of the Job Market
The Executive Search industry is considered to be a leading economic indicator for the economy. That simply means that if we are busy, the economy should continue to be moving in a positive direction for the next 3 – 6 months.
We rely on more than our level of ‘busyness’ when people ask us about the market. Here are two numeric indicators we look at to give us insights into the job market:
- The Employment Trends Index® for July (reported by The Conference Board on August 7th) increased (see https://www.conference-board.org/topics/labor-shortages/press/Employment-Trends-Index-July-2023).
- The July 2023 job numbers were down a bit – the economy created 187,000 jobs. The U.S. unemployment rate, however, dropped to 3.5%. The unemployment rate for people 25 and older with a 4-year degree or higher stayed at 2.0% (see https://www.bls.gov/news.release/empsit.t04.htm).
There is talk (from the Federal Reserve, Economists, Bank Executives) of a recession – but not until sometime in early 2024. The talk of a recession in 2023 seems to have subsided. With that 2024 talk are comments about it being a shallow recession (if we have one) and that unemployment will not get above 4.2%.
Full employment, not precisely defined, was considered to be 3 – 5% unemployment by Walter Heller (JFK’s Economic Advisor) and was said to be 4 – 6% unemployment by people in the Obama administration.
So, what are we seeing?
Working in Executive Recruiting every day, we experience two views of the market – one from potential candidates we speak with and one from clients that want to use our services.
- Candidates: One of the very real job market indicators for us is what our candidates tell us. We commonly approach people who are gainfully, busily and happily employed. When we speak with them about a potential opportunity, they often tell us that they are involved in other new employment pursuits (they are active in the job market). The candidates see the market as active. And remember, they are usually happy where they are and do not need to explore the external market.
- Clients: We keep what we internally call a pipeline list . . . . . a list of our clients or prospective clients that have openings planned. They have called us because they will likely be considering our firm as a recruiting resource. The list is getting longer and new searches are starting. While not often happening overnight (companies are very planful right now), the openings are out there.
Why are clients coming to us?
Many of our clients have tried to fill their opening(s) on their own and have not had success. Other clients simply move directly to the Executive Search process to fill their open role. In many cases where employers have tried, they have not been able to generate candidates with the experience and cultural fit that they want. In other cases, they have made offers and were turned down. And in additional cases, they hired a person and that hire did not work out.
Our conclusion regarding the job market is . . . . .
Based on all the above information, we feel that the job market continues to be strong. Does that mean it is easy to find a new position? No. (If you are in transition, the unemployment rate is 100%.) Are there jobs out there? That is a definite yes.
The job market is resilient; our clients are continuing to grow in a planful manner. If you are active in the market, stay active. The openings and job growth are there.