Your Hiring Pulse report for July 2022

Recession jitters and interest rate hikes are factors in decisions around payroll, of course, but what’s also happened is that June marks the end of the first half of the calendar year, and companies are recalibrating and implementing plans ahead of the second half according to Crunchbase.

Also worth noting is that layoffs and discharges according to U.S. Department of Labor data is not spiking across the spectrum – in fact, it’s remained at a stable pace month over month:

Plus, when you compare layoffs and discharges with previous years – and yes, “before times” – in the United States, you’ll find that the number is actually lower than the norm. Of course we’re still in highly unusual times. That crazy spike in March/April 2020 led to a pendulum swing in the opposite direction with a high number of hires soon afterwards.

And now, while layoffs are indeed happening in startups, those more established SMBs may have already optimized their worker base enough from the 2020 tempest that sudden changes aren’t as necessarily required two years later.

Meanwhile, the Great Resignation continues, especially in the United States, which has just seen its 12th consecutive month of upwards of four million job quits. Many of those quits have traditionally been at lower-level positions, but we’re now seeing the trend starting to happen at the managerial and directorial levels.

Anyway, let’s set layoffs and Big Quits aside for a moment and look at other potential fallouts from the gloomy projections of a recession ahead. Here’s this month’s Hiring Pulse, with a special and different look at SMB hiring trends in our deep dive.

How we’re looking at data

First, looking at SMB hiring data gives us an opportunity to look at benchmarks in the hiring landscape. But when the benchmark changes at unprecedented levels during these last two very weird years, it becomes an unreliable gauge.

So, it’s no longer helpful to look at the data YoY or even MoM. It makes more sense to look at rolling trends. Consequently, for the Hiring Pulse, we are looking at percentage increase or decrease compared with the average of the three trailing months. Want a more detailed methodology? Jump to the end and check it out.

As always, we look at the worldwide trends for three common SMB hiring metrics:

• Time to Fill (TTF)
• Total Job Openings
• Candidates per Hire (CPH)

Let’s start analyzing!

Table of Contents:

• Time to Fill
• Total Job Openings
• Candidates per Hire
• Deep dive – jobs filled data
  • Time to Fill
  • Total Job Fills
  • Candidates per Hire
• What’s going on here?
• The Hiring Pulse: Methodology

Main highlights

The three main highlights for this month’s Hiring Pulse are:

• New job postings are down
• Jobs being filled are also down – way down
• Candidates per hire is going up for jobs filled in May and June

1. Time to Fill

For this report, Workable defines “Time to Fill” as the number of days from when a new job is opened to when that job opening is filled. It’s important to understand that definition: if a job is opened in January this year or even as early as August last year, but isn’t filled until June 2022, it won’t count in this graph. If another job is opened on the same day last January or August but is filled on May 31, it does count in this graph.

So, we’re looking at the TTF trends only up to the end of May. Got that? Good. Let’s have a look:

Rather than simply call out the sharp drop in TTF in the most recent months, let’s do what we’ve done in previous months – compare this graph to the one in May, and to the one in April, and so on. In this graph, we see five consecutive months of significantly shorter TTF metrics, down to -18.2% in April and -25.3% in May.

In June’s Hiring Pulse, we saw only four consecutive months of significantly shorter TTFs – ending in -18.5% in March and -26% in April.

In May’s Hiring Pulse, it was – wait for it – just three (four, if you really want to count the miniscule -0.8% change at the start of the drop), ending with -19.2% and -27.4% in the two latest months.

Ditto for April’s Hiring Pulse, ending with -22.8% and -29.2%.

What does this tell us? Even with the clear variable of this data being measured forward from the time a job is opened, TTF is still dropping. If you want to see what the data looks like for jobs filled and going backwards from there instead, we now have that data and we’re going into it in the deep dive below.

2. Total Job Openings

Total job openings represent the total number of job openings activated across the entire Workable network.

So, let’s look at the raw job open numbers – which aren’t contingent on job open/close dates like TTF and Candidates per Hire.

These are just jobs opened in a given month. So, we can include June 2022 in this chart:

You know that old trope where a news editor comes running into the room and says, “Stop the printing press! Rip out the front page! We’ve got a story here!”

Well, we may have a story here in that strikingly negative -10.2% drop in the job opening trend for June.

To add context: a drop in new job openings is pretty normal – for the end of the year:

• -9.5% and -23.5% in Nov-Dec 2019
• -3.0% and -8.3% in Nov-Dec 2020
• -0.3% and -11.9% in Nov-Dec 2021

And of course, there’s the COVID-quake that hit us in the spring of 2020 where the job opening trend was a staggering -22.9% in March, an incomprehensible -51.6% in April, and -23.2% in May of 2020.

But this is June. It bears noting that we don’t see this kind of data in previous Junes:

• -8.1% in June 2019 (this being the only one closest to June 2022)
• 20.3% in June 2020 (an anomaly in the opposite direction, since businesses were very much rebounding from the COVID-quake)
• 6.8% in June 2021 (not much of a change from May 2021’s 6.9% or to July 2021’s 5.7%)

We’ve talked about fragile economic nerves and end-of-Q2 planning – maybe that’s what’s happening here as well. While layoffs and terminations aren’t hugely different from previous months, companies are definitely opening fewer jobs.

That’s interesting considering that the job quit numbers in the US remain at ruthlessly high levels. Normally, when someone leaves, that position will be backfilled. But maybe companies are seeing turnover as a blessing in disguise – rather than backfill, they see this as an opportunity to wait and see what the waters look like ahead without needing to resort to layoffs. Convenient business austerity at work, perhaps?

3. Candidates per Hire

Workable defines the number of candidates per hire (CPH) as, succinctly, the number of applicants for a job up to the point of that job being filled.

Let’s look at what’s going on here through May:

(NOTE: Again, as in the TTF chart, you’re probably wondering why we stopped the numbers in May. Again, as stated above, that’s because these data are based on the time the job was opened, not when it was filled. Moreover, even jobs that remain unfilled are included here.)

Again, interesting numbers here in this SMB hiring trend. In last month’s Pulse, we noted that the average candidates per hire for April, the most recent month of data last month, was -4.4% less than the monthly average in Q1.

This time, the most recent month of data, May, shows a much more dramatic -14.4% change from the previous three-month average. And April has changed from -4.4% in last month’s Pulse to 1.9% in this month’s report.

A clear takeaway from this is that applications to jobs opened in April grew significantly throughout June. With fewer jobs being posted in June, this suggests that there’s a spillover to older but unfilled job postings for today’s candidates.

In other words – the list of recent jobs is shorter now, so in scrolling through jobs in reverse chronological order, candidates will encounter those older job postings more frequently than in the past, driving up CPH for those earlier postings.

Maybe there’s an opportunity for SMB employers who are still trying to fill those older jobs: take a look at them, tinker with them so they’re more relevant to today, and resurface them so they’re at the top of the pile once again. Don’t make the candidate have to look backwards to find you. Be the first company they see at the top of the pile.

Deep dive – jobs filled data

The challenge with dissecting these data points is that the dataset involves all jobs that have been opened – not just the ones that have been filled.

Plus, we include jobs opened in May in this dataset – even with the luxury of one full month of extra data after that. Consider that the Time to Fill and Candidates per Hire will be much lower for a job opened just before midnight on May 31 than it would be for a job opened in March. This can create a weird variation in the data because all this falls into the same dataset regardless.

So, as we’ve mentioned umpteen times, the drop in CPH and TTF in recent months makes sense to a degree. We’ve attempted to circumnavigate that by comparing the most recent months between different reports which does lead to interesting insights.

One major reason we’ve done it this way up to now is because we get to analyze a much larger dataset – giving us the opportunity to segment the data based on industry, function, and location.

But you know what? We now have data based solely on jobs that have been filled. This gives us an opportunity to look at SMB hiring trends right up to the end of June. Let’s dive in!

1. Time to Fill

Let’s first look at the Time to Fill trend for jobs based on the date when they were filled:

What’s especially intriguing is that the TTF trend for jobs filled in January 2022 is a significantly higher 7.5% jump from the monthly average of Q4 2021. For “all” jobs whether filled or not, it’s -8%.

Other than that, the TTF trend still drops quite a bit in the months after that – coming up for air in May at 1.1% and June also at 1.1%. We’d like to sit and watch what the trend looks like for this going forward with stabilizing TTF in the two recent months – yes, that means this isn’t going to be the only time we look at jobs based on the fill date.

2. Total Job Fills

Now, let’s look at jobs themselves. This one’s a bit different from the Job Opening trend, because we’re now looking at the trend of jobs being filled in a given month:

Good news or bad news first? Let’s start with the good: Q1 2022 saw a lot of activity in job openings, with 17% in January, 14.2% in February, and 20.4% in March. For jobs filled, the trend is -1.1%, 8.9% and an eye-catching 30.8% for the same three months.

Since a job won’t usually be filled for some time after it’s opened, it makes sense that a higher trend of job openings in January and February would mean a spike in jobs filled for March. And that’s clear here.

Now, the bad: we pointed out the -10.2% for June in the Job Opening trend above – for data based on jobs filled, we see a more moderate -4.4% change in June compared with the trailing three-month average. While that doesn’t necessarily call for alarm, it’s something we should keep an eye on, because for the last two Junes, there’s a positive shift in jobs being filled:

• 17.7% for June 2020 (take that with a grain of salt – it was -12.4%, -55% and -36.9% for March, April and May 2020 respectively)
• 11.7% for June 2021 (very significant considering consistently positive trends of 17.2%, 52.5%, 22.2%, and 9.5% for February through May 2021 respectively)

Yet, this June sees a drop, on the heels of an insignificantly positive 0.2% trend for April and 3.2% for May this year. While we can explain away some of this as entrails of these crazy times, we still need to watch this space.

3. Candidates per Hire

Now, let’s look at the Candidates per Hire trend for jobs that are filled in a given month:

The CPH trend in the dataset based on the job-open date shows relatively steady decline in recent months – again, as in the TTF data, it’s because more recent job postings will not have had the time to collect candidates as older job postings.

But this time, we now get to see what the CPH landscape looks like for jobs that are already filled in a given month – and the difference is that jobs filled in May have collected more candidates than previous months, at 6.7% higher than the February-March-April average. But it goes back underwater with a 0.9% shift in June. Still, this is after negative trends in most months dating back to the start of 2021.

So, while the numbers look a little different here, it’s still true that employers hadn’t been seeing as many candidates per job as they had in the past – but the upturn in CPH for jobs filled in May combined with with the evidently unseasonable drop in jobs being filled in June is something to take note of.

What’s going on here?

Honestly, the changes in the most recent months all point to recession jitters. Companies see what’s going on in the market – the plummet of the stock market, the hike of the interest rate, the rise of inflation, etc. – and they will naturally turn to contingency measures to stay afloat and keep their bottom line out of the red zone.

We’re seeing this in the lower number of jobs being posted. This, in spite of the ongoing Great Resignation (which amounts to more than 51 million job quits in the United States over the last 12 months). You’d think more quits would equal more jobs posted as a result of backfills – but that’s not happening in recent months.

And on the candidate side, the throngs of people who have left their jobs for other pastures may be seeing the recession on the horizon and realizing that it may be a smart idea to lock in a more secure job and ride out the storm before pursuing their passion project any further. No, we haven’t grounded this in science – it’s just one potential explanation for the rise in candidates per hire along with more concentrated candidate pools across fewer job openings.

But, then, we have a new report from the US Department of Labor showing once-again strong job gains for June to the tune of 372,000 payroll additions, and those additions at higher wages to boot.

According to Reuters, Indeed economist Nick Bunker said: “If you’re looking at this report for signs we’re already in a recession, you’re likely to come up blank.”

These SMB hiring trends are not numerical soothsayers – they are merely indicators of what the road ahead may look like: first, fewer jobs are being posted; second, more candidates are applying for jobs; and third, there’s a huge drop in jobs being filled in June.

Like the holiday season, the summer months (for those in the northern hemisphere, at least) can be a relatively slow time for hiring. June is potentially just the start of that. Let’s see next month whether these changes are due to recession jitters, seasonal hiring habits, or a mixture of both (or neither).

Thoughts, comments, disagreements? Send them to [email protected], with “Hiring Pulse” in the subject heading. We’ll share the best feedback in an upcoming report. Watch for our next Hiring Pulse in August!

The Hiring Pulse: Methodology

To bring the best insights to small and medium businesses worldwide, here’s what we’re doing with our data: when looking at a specific month’s trend, we’re taking the numbers from that month and comparing it to the average of the three previous months – and showing as a percentage how that month looks in comparison.

For example, if July shows an average Time to Fill of 30 days for all jobs, and the monthly average for the three preceding months (April, May, June) is 25 days, we present the result for July as a 20% increase.

The majority of the data is sourced from small and medium businesses across the Workable network, making it a powerful resource for SMBs when planning their own hiring strategy.