In short: five-year plans and even full-year strategies are giving way to quarterly shifts in practice – and employers who are quick on the ball will succeed. Your SMB workforce management strategy needs to be just as nimble, just as quick, if not more so than other elements of business strategy.
Now, as we get into this month’s SMB hiring data deep dive, we’re going to share some ideas about the importance of standardizing your recruitment flow because of that same wild unpredictability. You want a system in place that continues to hum along smoothly during slower hiring times, but you also want a system that you can quickly kick to the fifth gear as job openings spike and candidates start to flow en masse.
But first, let’s crunch away!
How we’re looking at data
First – and we explain this every month to be sure that it’s understood – looking at data gives us a measuring stick so we can see what’s going on in the hiring landscape. But when that measuring stick regularly changes during this ‘Never Normal’ time, it becomes an unreliable gauge.
It’s no longer helpful to look at the data YoY or even MoM. Rolling trends make more sense because then you’re comparing data with what’s happening in recent months. So we’re looking at percentage increase or decrease when compared with the rolling 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)
In this Pulse, we take a look at these three core metrics, and then we’ll share some ideas on how to run your business so it somehow stays calm and carries on through pandemics, wars, and all of the rest of it.
Let’s start analyzing!
The three main highlights for this month’s Hiring Pulse are:
- Hiring is busy right now for SMBs – more than it has been since the first quarter of 2021
- Job metrics are stabilizing in the first quarter of 2022 – which potentially means a normalization of the hiring market
- Some sectors are seeing normalization more than others – and some not at all
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 October or even as early as April last year, but isn’t filled until March, it won’t count in this graph. If another job is opened on the same day in July or September but is filled on February 28, it does count in this graph.
We’ve pointed out previously that this does explain the recent downward trend in recent months to a degree at least – but it does not explain it fully. Let’s look:
Last month, we saw that the number of consecutive negative-trending months was at six straight months – that point of data has finally started to rectify itself with the recalibration of the TTF metric for September, October and November of 2021. Take a look at the previous month and note that the TTF trend was -2.3%, -5.0%, and -5.6% for those months respectively, and now they’ve changed to 0.0%, 0.6%, and 1.8%.
Read that first paragraph again about TTF only being included once a job is filled. What we’re seeing here is that many jobs opened in Sept-Oct-Nov 2021 were filled in February 2022. A job opened at the start of September and filled on February 28 would mean a TTF of 180 days. Even a job opened at the end of November and also filled on February 28 would be a TTF of 90 days.
This means that job openings that have been languishing in the ether for months on end are getting filled at last – much to the relief of many employers, we’re sure. It’s not so much an indication of a healthier economy or better recruitment marketing or more candidates – rather, it simply reaffirms the reality that the first quarter is always a busy hiring time. And ultimately, what initially appeared to be a plummeting TTF trend is now balancing out with these new developments.
We did note last month that a lot of jobs were opened in January and were filled in January – that still holds true. But we are now in April and the TTF trend looks like it’s stabilizing. In fact, you could call it normalizing.
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, so we can include March 2022 in this chart:
Whoa, what a fiercely busy quarter for hiring teams. Last month we pointed out that businesses are starting to hire again – this is continuing to happen. The job market is flourishing, with March seeing a huge 20.4% jump in the job opening trend when compared with the trailing three-month average. And that March number is even more impressive when you consider that January and February are already high on their own.
It’s no longer a rebound from Omicron, even with new variants surfacing. It’s also the job market surging after a traditionally slow December.
We’ve talked about it many times in previous Pulses, but we can’t ignore the Turnover Tsunami, The Crisis of Quits, The Talent Shuffle or whatever you want to call it. It is still dominating the workforce. February quit numbers in the United States according to the Department of Labor (DOL) were more than four million – again.
And March also saw plenty of new jobs in the US – not 678,000 as in February, but still more than 400,000. A huge chunk of that is in retail and hospitality – keep that in mind as you read on.
In short: there’s a lot of activity in the job market both in terms of new jobs and backfills, and that shows in our data.
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 February:
(NOTE: Again, as in the TTF chart, you’re probably wondering why we stopped the numbers in February. Again, as stated above, that’s because these data are based on the time the job was opened, not when it was filled.)
We discussed how the data can recalibrate based on recent filled jobs – which as mentioned above was happening at a steady clip through the first couple of months of 2022. This is happening here as well – and what’s different this time is the way the CPH trend is now mostly stabilized at just below zero through to the end of 2021.
This again is an indication that those jobs in the latter months of 2021 have been filled aplenty through January and February. And the big upward adjustment in the TTF metric above also means more candidates were being evaluated for those jobs.
We did say last month that we would revisit the January data to see how much it changes – it’s -11.3% now, compared with -18.6% last month.
Could it be that hiring teams simply waited until they found the right candidate, and sifted through as many as possible rather than jumping on the first one they could find? Perhaps.
What’s going on here?
Let’s quickly recap. The TTF trend is stabilizing. The job opening trend is going through the roof. And while the candidates per hire trend is still trending negative, it’s not nearly as dramatic as seen in previous Pulses. All of these things indicate a slow return to normal in the hiring world.
But we’re well aware of the vast discrepancies in hiring experiences across different industries, so we’re going to take a look at them.
The deep dive
We mentioned above the proportion of new jobs being in the retail and hospitality sectors. That’s an important reminder that not all sectors are the same.
These four sectors below were picked because they’re highly impacted by world developments and their fallouts:
- Education – because we know that education workers are in short supply due to burnout
- Health Care – because it’s one of the sectors that was and is hugely impacted by COVID-19
- Restaurants & Hospitality (our categorization) – because of higher-than-normal quit rates as part of the Great Resignation (more on that below)
- Transportation – because supply chains and transportation industries have been hit by what seems like a metric ton of different factors (more on that below).
So, let’s look at the four across all three hiring data trends.
Time to Fill
Let’s start with the Time to Fill trend:
What really stands out here is how much TTF in the Restaurants & Hospitality sector grew during the latter months of 2021, with a 15.4% positive trend in December on the heels of 5.4% in October and 6.7% in November.
This is expected – there’s more stress in this sector with increased public socialization and travel combined with holidays and colder weather. Bottlenecks in hiring are bound to happen as this area gets busier – which drives TTF up.
Meanwhile – Transportation saw a 20% positive trend in TTF in October, followed by just 2.2% in November, -12.5% in December, -25.7% in January – and finally, -27.9% in February. Supply chains worldwide have been disrupted significantly, with no signs of abatement for 2022 according to the New York Times. There’s a lot of external pressure in this area.
The transportation industry itself is also seeing wholesale developments through increased EV usage, MaaS (mobility as a service), and last-mile delivery which has grown hugely in the last two years as a result of increased online shopping.
And, of course, there’s a major shortage in trucker talent. Mass migration all around, and quick hiring to desperately fill spots to avoid the domino effect that a gap in the chain can trigger. All of this impacts TTF.
Now, let’s look at the job opening trends across these four sectors:
Again, Restaurants & Hospitality jumps out at us. It’s noted that the Big Quit is especially happening in this area – with twice the quit rate levels here compared with the overall US average according to the DOL. This leads to increased backfill, and more job openings as a result. We’re seeing that in our data, with a huge spike going into 2022 in the job opening trend here (36.6% in January and 63.8% in February).
Also worth noting that back in March 2021, there was a 121.1% increase in the trend – likely pandemic-driven as COVID cases cooled off and the world reopened in the springtime.
Meanwhile, the Transportation sector sees significant growth in job opens in January and February 2022 (16.6% and 14.2%) before finally coming down to relative earth levels for March 2022 (8.8%). It’s still far from what we saw in the three months of Q2 2022 – 27.1% in April, 27.9% in May, and 25.6% in June.
And Health Care? It’s spiking again in the first quarter of 2022 – topping out at 28.7% in March 2022. It’s not nearly as high as Q1 2021 (55.1% in January 2021, 66.2% in February 2021), but worth noting is that it’s very different from 2020 just before the onset of the pandemic – 9.3% in January 2020, 2.8% in February 2020, and 5.0% in March 2020.
The higher job opening trends in Q1 2021 likely was a response to the worst period of the pandemic, when we saw some 15,000 COVID-related deaths per day worldwide that January. And this time, we’re navigating Omicron and other new variants. Cue pressure on the health care system, prompting the need for more staff – hence, more job openings.
However, we’ll also wager that there are many backfills in health care. Workers in the health care sector are tired and overworked after more than two years of this COVID stuff, and opting out of the system. Same goes for Restaurants & Hospitality. Education can’t be ignored, either.
So… this Big Quit is very alive and very real in these areas.
Candidates per Hire
Finally, let’s look at Candidates per Hire across the sectors:
What stands out are two spikes – first, the CPH trend in Health Care jumped 28.3% in December 2021. Second, CPH in Restaurants & Hospitality grew 5.6% in January 2022.
Restaurants & Hospitality’s growth was after a slow November and December and the only one of the four to see a positive CPH trend in either January or February of 2022.
Education, meanwhile, sees a very interesting month-to-month shift in the CPH trend – with more candidates per job in September (13.8%), October (22.4%), and November (15.0%) followed by equally dramatic negative trends in December (-20.9%), January (-20.2%), and February (-38.7%).
So, more people are applying for jobs in Health Care and Restaurants & Hospitality, and fewer are applying for jobs in Education. We know books will be written about the impact of the pandemic on our society in the coming years – in fact, many have been published already – and this particular area deserves a deep study of its own.
For now, we will just point out that this combined with the higher job openings points to higher-than-normal turnover in these sectors.
We’ve got more than a few things happening here – COVID itself, the Big Quit, seasonality, the paradigm shifts stemming from the pandemic in social behavior, purchasing habits, life priorities, and all of the rest of it. We talked a lot the last couple of months about the importance of recruitment marketing and agility in the hiring process of SMBs – this time, we’re going to stress the importance of standardized recruitment using software.
Yes, we know we are a hiring software, and we know this sounds like a plug for Workable. But listen: SMB hiring teams do need a standardized hiring process that can navigate the sudden ebbs and flows of the job market. Having a largely automated system managed at the console by human hiring teams is much, much easier – and less costly in terms of finance and logistics – than adding to and subtracting from HR payroll, as well shifting longer-term business strategies.
As an SMB employer that needs to watch the bottom line closely, you want a system that operates just as smoothly in cruise control as in slower, deader times and in fast-paced, über-turbulent times. That system is, of course, the ATS.
Whether or not you’re in one of the four highlighted sectors above, standardization of hiring is crucial if you want your business strategy to execute smoothly.
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 May!
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.