Whatever you want to call it—the “Great Resignation,” the “Great Reshuffle,” the “Big Quit”—more than 50 million US workers have left their jobs over the last two years.
Such upheaval in the labor market comes on the heels of a once-in-a-lifetime pandemic that shook up nearly everything about modern life, particularly how and where we work. These days, recruiters can use AI and other time-saving digital tools to source talent, but the demands of the job are as high as ever.
From my perspective as Head of Talent Acquisition and People Partnership for Nasdaq in the Americas, there are always particular areas of the economy experiencing talent shortages like those we’re seeing today—often in “hot” industries seeking highly skilled workers. And even though recruiters are up against many challenges, this is the most important message: Keep calm and carry on. That lesson, and a few others from years past, can help all of us improve our recruiting efforts in the future.
Hiring in a Tight Labor Market: Everything Old Is New Again
Recruiting is cyclical. In some ways, we’re all like Bill Murray in the movie Groundhog Day. This isn’t the first time US employers and job seekers have been in a similar situation, even if the recruiter’s plight today may seem unique.
Back in the 1990s, there was also a worker shortage, as wages started to rise and technology changed the way both job hunting and recruiting were done, and job boards revolutionized the industry. Companies like Microsoft, SAP, IBM, as well as many companies that no longer exist, were hiring temp and permanent workers however they could.
In some industries today, it seems like there aren't enough workers to fill all the open jobs. Exhibiting impressive economic growth, there were upward of 10.1 million open jobs in the US at the end of August 2022, an increase from the 9.3 million open jobs in April 2021.
However, we have recently started to see reports of layoffs, similar to the 2000s, when the tech and housing bubbles burst, and the market rebalanced and then swung in the other direction, resulting in an ample talent pool. Today's layoffs are happening, at least in part, because some firms that overstaffed coming out of the height of the pandemic are course-correcting.
Generally, it still seems easier to find talent now than one year or even six months ago, and hints of a possible recession are giving job seekers reason to pause and evaluate if this is the right time to make a move. Wholesale quitting has (thankfully) started to slow down as well.
While voluntary attrition numbers have started to stabilize a bit, high-performing job seekers with sought-after skills will always be in demand. A material downturn in the economy, accompanied by a significant increase in the unemployment rate, would increase the available supply of labor. But absent a big negative market event like this, I expect the competition for talent to persist.
How the Labor Market Has Changed
In many ways, today’s situation is due to the merging of specific market dynamics. The pandemic effectively put a pause on candidate exploration of new opportunities as employees were dealing with the uncertainty of day-to-day life. While in a holding pattern, many of us contemplated our personal values and our own sense of purpose.
As the worst effects of the pandemic started to ease, the doors opened for candidates to explore roles that better aligned with their values. Combined with changing job market dynamics as a result of the labor shortage, this resulted in a perfect environment to entertain new career opportunities. We may still be in that exploratory or “reshuffling” phase as employees continue to seek roles that fit, particularly those with the flexibility to work remotely or in a hybrid capacity.
At the same time, I believe many people are just burned out. More people are advocating the benefits of work-life balance rather than the hustle culture that was the norm a few years ago.
Another factor affecting the current job openings rate is the dynamic of wages and inflation. Average hourly wages rose 5% from last year, at least partly because companies recognize that many of their employees feel cash-strapped and continue to look elsewhere in search of a bigger paycheck. But wages are not keeping pace with inflation, which has been running at a four-decade high in 2022. Its pace slowed somewhat between June and July, but it’s still uncomfortably elevated.
Best Practices For Sourcing Talent During Turmoil
Workers as a whole are placing less value on financial rewards and more value on balance and flexibility. But employees have always valued different things depending on where they are on their personal career journey and their industry. In finance, for instance, you will still find companies that are requiring employees to be in the office five days a week. If finance firms are willing to pay a premium for talent, they may effectively differentiate themselves in the market and attract those candidates who are motivated by higher pay. Alternatively, in the tech space, flexibility may be valued more, so firms will naturally align themselves to the market.
Despite the cyclical nature of the booms and busts of the last 30 years or so, recruiters have the same fundamental task: sourcing and hiring the best talent for their organization.
Update Your Tools and Train Departments on How to Use Them
The tools to identify talent of all types and backgrounds—as well as the norms surrounding job searching—have fundamentally changed over the years. In the 1970s, for example, it was common to list height and weight on a résumé and to smoke in interviews. And most job seekers found opportunities in the newspaper classified ads through the 1980s. Then in 1994, Monster.com went online as one of the first public job search websites, while CareerBuilder started inviting companies to list job postings on its website in 1995.
Today, for me, one tool stands out above all the rest: LinkedIn, which I consider the go-to source for talent. Never before has there existed such an exhaustive directory of job candidates. The fact that all the content is user-generated and generally accurate is something that would have been unfathomable to recruiters even 20 years ago.
Leverage Your Internal Analytics Team
At Nasdaq, we also use our internal analytics team to manage our talent acquisition performance dashboard, which includes measures like time to fill, time to hire, requisitions per recruiter, diversity hiring by business unit in the US, and female hiring globally. This data is pulled from Workday, our applicant tracking system. By doing so, we are able to measure our performance weekly. In addition, the dashboard helps us focus our future recruiting efforts and stay aligned to our objective of hiring diverse talent to ensure the organization is representative of the broader talent landscape.
But technology doesn’t do our jobs for us. Ultimately, talent acquisition partners must proactively engage in the market to identify candidates. The ability to leverage a LinkedIn recruiter license and conduct effective Boolean searches is a basic requirement of the job. Having a strong network is a plus.
Build a Talent Pipeline for the Future
Let’s be clear: Quitting remains on a lot of workers’ minds. With 40% of global workers considering leaving their jobs in 2021, there is talent to hire, but some workers will be looking to switch industries or go freelance while others may be jumping back into a full-time job. Others may have family responsibilities that will keep them out for good.
We are always contending with a unique set of factors affecting the talent market. As more baby boomers retire, it may take considerably longer to square talent demand with supply. But there were predictions many years ago that this shortage was coming, and it may take another significant recession to restore the balance.
An important way to confront the changing market is to be open to new sources of potential candidates. In the future, we may become more dependent on talent with nontraditional training (e.g., no four-year degree). And companies may look to expand their apprenticeship and developmental programs to train junior team members. In that case, we may see fundamental shifts in how companies engage talent, perhaps even moving away from a permanent employee relationship to a contract-based relationship.
Stay Resilient and Empower Your Hires
As my team and I look back at the last few years, resilience and adaptability have been the key to staying competitive despite all these changing market dynamics. Nasdaq has a strong culture of empowering its employees to take ownership of their roles and find creative solutions to problems. We’ve leaned heavily on these cultural attributes to manage through the challenges that we all had to face. A little humor goes a long way, too.
As we continue to confront a broadly challenging and rapidly evolving labor market, I find it comforting to remember an adage that keeps things in perspective: The more things change, the more they stay the same.