Your Hiring Pulse report for February 2023
In January’s Hiring Pulse, we pointed out how the job market was getting flooded with candidates – and this was reflected in the surging candidates per hire (CPH) trend in recent months.
We also took a deep dive into the overall data for 2022 and compared that with the three previous calendar years of 2019, 2020 and 2021. There were some interesting insights in that as well, most notably that CPH was climbing at a rate unseen since the early days of the pandemic in 2020.
This time, with the first month of the new year behind us, we get a taste of what 2023 might look like. And we also take a deep dive into five industry groups in our dataset, because different cohorts are affected differently.
Let’s dive in!
How we’re looking at data
We’ve adopted two methodologies in how we look at the Hiring Pulse dataset. For Time to Fill and Candidates per Hire, we’re measuring each month using the average of 2019, the last “normal” year, as a baseline index of 100.
For job openings, we’re taking a different route – simply, the average number of job postings per company. This gives us the opportunity to gauge overall recruitment activity and whether that’s going up or down.
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 (JO)
- Candidates per Hire (CPH)
Let’s start analyzing!
The three main highlights for this month’s Hiring Pulse are:
- Candidates per Hire is still climbing, for the seventh straight month
- Job openings surged in January for companies with 200+ FTEs
- Job activity for the Hospital & Health Care industry group is much higher than other select industry groups
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: jobs that are still open as of the end of January are not included in this graph as they don’t yet have an “end date”. Only the jobs that are filled are included here.
Got that? Good. Let’s have a look at the monthly TTF trend throughout 2022 against the average of 2019, based on jobs that have been filled:
Something’s changed here. After a steady decline in the TTF trend for nearly every month throughout 2022, we see the TTF take a nice jump in January.
Now, let’s not get too excited by this. First things first, this is normal as can be. January normally sees the TTF jump quite a bit – from 88.8 in December 2020 to 96.2 in January 2021, and from 93.2 in December 2021 to 97.2 in January 2022.
And now, the trend grew from 86.4 in December 2022 to 90.6 in January 2023.
What *is* different, however, is that in the Q4 months, TTF increased month over month in 2020 and 2021, but declined month over month in 2022. But that’s the past – the main takeaway we have for this month is that TTF increased as expected in January.
2. Total Job Openings
Total job openings represent the total number of job openings activated across the entire Workable network.
As stated above, we’re displaying this as an average of job postings per company in the network. And because this is not contingent on job opened/filled dates like TTF and Candidates per Hire, we can simply look at the raw job open numbers up to the end of January.
Last month, we pointed out how the overall average jobs per company in the network dropped to 5.2 after a very stable six-month string where it didn’t go higher than 6.3 or lower than 6.1.
But now, it’s jumped to 6.6 job postings per company in January – the highest since 7.1 in March 2022.
Of course, that differs by company size. So let’s get into that.
A huge jump for larger companies
December saw a significant drop in job postings for enterprise-level companies (200+ FTEs) from previous months, which we’ll “blame” on slower holiday activity. But in January, that number rebounded to 18.5 job postings per company, an increase of 37% over the previous month.
That’s not something to be excited about, though. First, a rebound in job postings in January is very normal especially at the enterprise level – we’ve seen this in past years as well.
And second, past Januaries show the JO average to be at a higher point than most months in the year preceding it. That’s not the case this time – January’s JO activity would be the third-lowest in 2022 (and, it’s worth noting, the two months that were lower are the last two months of 2022).
Medium, not nearly as much
The jump from December to January is also seen in the medium-sized category (51-200 FTEs), growing from 4.7 to 5.4 job postings per company. That’s not as dramatic of a jump as the 200+ crowd, but it’s still a 15% bump.
That being said, there isn’t anything particularly eventful or surprising here. So, let’s move to small businesses.
Jobs are lively for small businesses
Now here’s where the real story lives – in the 1-50 FTE bracket. Let’s add context as to how this group differs from the others.
Small businesses were the only one of the three size categories to be relatively increasing in job postings per company in the latter half of 2022. And the December drop was not particularly dramatic as it was still higher than most months throughout 2022.
Now the story of the hour: at 4.3 job postings per company, small businesses were more active in January 2023 than at any other month dating back to the start of our dataset in January 2019. We repeat: that’s the highest in four entire years. It’s also only the second time in that time span where the JOs per business goes higher than 4.
We discussed last month how the greater agility and shorter planning tenures of small businesses mean that this category is consistently active regardless of holiday seasons and other seasonalities. That may ring true again here.
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 January:
Simply put: January sees the CPH trend climb again – from 125.8 to 128.4 – although that’s not nearly as dramatic of a jump as in the two previous months.
It’s still another month-over-month increase – for the seventh straight month since July 2022. When is this trend going to peak?
And is that happening across all industries? Well, no. That’s exactly what we’re looking at our deep dive this month. Let’s take a look.
Deep dive – how ‘normal’ was 2022?
Now, we will be transparent here – our data isn’t perfectly spread out across all industries, all countries, or all functions. I mean, we’re not a government statistical body.
That caveat aside, our dataset is comprehensive enough that we can objectively look at specific industries and get solid insights from them.
So, we’re taking a look at five major industry groups this month with a rough breakdown of what sectors are in each:
- Software & Services (IT security, software, etc.)
- Commercial & Professional Services (environmental, law, consulting, training, logistics/supply chain, research, etc.)
- Hospital & Health Care (exactly this)
- Diversified Financials (accounting, financing, investment, VCs, etc.)
- Capital Goods (engineering, aviation, defense/space, construction, machinery, etc.)
And a quick second point to make: in past Pulses, when deep-diving into specific categories, we used a category’s 2019 average as the index. But we thought about it and decided it’s better here to use the overall 2019 average as the index – that way, you’re able to see which groups are trending higher or lower than the overall baseline.
Got all that? Let’s get cracking.
Time to Fill
First, of course, Time to Fill:
What really stands out here is the Software & Services (S&S) group. Two main things to look at here:
- TTF was much shorter for S&S than any of the other categories for the first half of 2022 – 28.9 points lower than second-lowest Commercial & Professional Services (C&PS) in January of last year
- TTF then surges to 98.1 for January 2023, higher than any other group seen here
The other takeaway is that Capital Goods went the opposite direction – the TTF trend was much higher than any other group here to start 2022 (114.4 for January) before coming down to align with the others throughout the year.
Meanwhile, C&PS started with a higher TTF trend, bounced around a bit throughout the year, and then drops to 82.4 for January 2023.
Now, on to job openings. This one simply looks at average job postings per company in each group.
Let’s just call it for what it is. If you’re operating in the Hospital & Health Care (H&HC) group, you’re probably hiring. You may even be desperate to hire – more on that in the CPH section below.
In short – H&HC companies in our dataset posted a stunning 27.4 new jobs on average in January 2023, effectively doubling in a six-month span dating back to August 2022’s 13.5.
What’s going on? A few factors – first, jobs in health care have been projected to be on the rise and this data just proves it. According to the US Bureau of Labor Statistics, employment in healthcare is predicted to grow 13% between 2021 and 2031 – adding more than two million jobs throughout the decade and at a much higher rate than jobs overall.
And second, perhaps unsurprisingly, job quits in healthcare are higher than the norm due to the stress on the sector throughout the pandemic leading to burnout. Retirement is another significant factor here.
Candidates per Hire
Finally, let’s look at candidates per hire for each of the industry groups:
This, again, is unsurprising due to all the layoffs in the tech sector in the latter part of 2022 and now. The CPH trend for S&S is much, much higher than any of the other groups at 190.4, and has been in the clear number-one spot for every month since June 2022. When you take out the anomaly that is May 2022 for the H&HC group, S&S is the runaway leader in terms of CPH throughout.
Let’s not let that overshadow our second takeaway from the CPH deep dive: Diversified Financials also saw a consistent climb in the CPH trend for the latter half of 2022. Not nearly as dramatic as S&S, but it’s still there.
And because we called so much attention to the job opens for H&HC above, it’s worth noting that CPH for that group is much lower than any other except for Capital Goods.
What’s going on here?
The data is clear (and was obvious anyway): not all industries are built the same, nor do they operate the same. And likewise, they’re not affected by the undulations of the economy in the same way. The differences between S&S, enterprise-level companies, and other cohorts are convincing.
So, if you’re reading this and struggling to understand why you keep seeing news about all of the following at once, you’re not just seeing things:
- surging layoff numbers (84,414 employees let go in January in the US)
- high numbers of new jobs added (517,000 new jobs in January in the US)
- job quits continue at high levels (50.5 million quits in 2022 in the US)
- candidate attraction struggles
- *and* an almost unmanageable deluge of candidates in response to job postings.
These don’t seem to align logically, do they? But alas, they are. We like to think of it as a restabilization of the system. The last three years have been certifiably tumultuous throwing the system off balance, with strong reactions that forced imbalances in other directions in an attempt to bring it all back under control.
Consider this analogy: imagine you’re carrying a wide, shallow dish filled with water across the room. It’s heavy and it sloshes back and forth with every movement you make (i.e. COVID, Great Resignation, what have you), and every action you take has the direct opposite effect rather than a calming of the waters. That’s what’s going on here.
Will the waters settle? Yes, of course. Not to the way it was before; that much is agreed on. But when? And how? Those are the interesting questions worth thinking about when we deep-dive into how the job data differs across company sizes, regions, industries, and so on.
Till next month…
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 February!
The Hiring Pulse: Methodology
Because one of the three metrics (Job Openings) is different from the other two metrics (Time to Fill and Candidates per Hire), we’re adopting two very distinct methodologies.
To bring the best insights to small and medium (and enterprise-level) businesses worldwide, here’s what we’re doing with the Job Openings metric: we’re taking the number of job openings in a given month and dividing that by the number of active companies in our dataset, and posting that as an average. For example, if July 2022 shows the average Job Openings per company as 7.7, that simply means each company posted an average of 7.7 jobs that month.
For the Time to Fill and Candidates per Hire metrics, we’re comparing a specific month’s trend against the full average of 2019, and we show the result using that 2019 average as a baseline index of 100. For example, if July 2022 shows an average Time to Fill of 30 days for all jobs, and the monthly average for all of 2019 is 28, we present the result for July 2022 as 107.1 – in other words, 7.1% higher than the average of 2019.
And we chose 2019 as the baseline because, frankly, that’s the last normal year before the pandemic started to present challenges to data analysis among other things.
The majority of the data is sourced from businesses across the Workable network, making it a powerful resource for SMBs when planning their own hiring strategy.