Your Hiring Pulse report for October 2022
In September’s Hiring Pulse, the data started to show that there were more candidates out there in the talent market than previously, and that the time to fill open roles was on the decline. We also took a deep dive into the UK and Ireland.
Now, this month, we’re taking the plunge into SMB hiring metrics as per usual, but with an update in how we look at the dataset. Let’s get right to it:
How we’re looking at data
In past Hiring Pulses from the very beginning, we had a dilemma: how do you look at data when the economic – and therefore hiring – landscape is so tumultuous from one month to the next? The big concern was that it’s hard to establish solid benchmarks when the goalposts keep moving all the time.
So, in the beginning, instead of simply establishing historical benchmarks from years of data, we chose to look at data based on a trailing three-month average. For instance, we would compare August’s Time to Fill against the rolling average of the three previous months – in this case, May, June, and July.
Now, we’ve established two new methodologies. 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
- Candidates per Hire (CPH)
Let’s start analyzing!
Table of Contents:
- Time to Fill
- Total Job Openings
- Candidates per Hire
- What’s going on here?
- The Hiring Pulse: Methodology
The three main highlights for this month’s Hiring Pulse are:
- TTF is coming down (again) after a jump in TTF for May, June and July
- Job openings are very busy for companies with 200+ FTEs – but not so much for mid-sized businesses (51-200 FTEs)
- Candidates per Hire numbers are going through the roof in the last two months
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 September 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 against the average of 2019, based on jobs that have been filled from the start of 2019 through to the end of September 2022:
In the most recent Hiring Pulses, we noted that the Time to Fill trend has been dropping over time. This isn’t different with the new approach to the dataset. For instance, the average Time to Fill for August is just 91.5% of the 2019 average.
It’s worth noting the small uptick in TTF for September – but that’s an increase of just .9 of a point. Also worth noting is how May, June and July saw a slight bump upwards in TTF, and there’s of course January with an above-average time to fill a role.
We speculated last month about how recession jitters, greater bandwidth in hiring teams due to business slowdowns in August, and the “rush to fill” urgent gaps in the workforce are all potential factors contributing to the drop in the Time to Fill metric in August.
However, our recently published survey report on the New World of Work for 2022 finds that depleted resources in hiring teams is a growing challenge in hiring – with nearly double the respondents citing this as a challenge compared with two years ago (27.5% vs. 14.9%).
So, that might cancel out the “greater bandwidth in hiring teams” theory. It’s gotta be recession jitters and the rush to fill jobs. And it may not even be those issues, with TTF coming up a bit in September.
What else might be going on?
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 – and they’re a great indicator of the health of the economy.
You’ll notice right off the bat that we’re breaking the data down into three separate buckets – companies with 1-50 full-time employees (small businesses), companies with 51-200 FTEs (mid-sized businesses), and companies with 200 or more FTEs. And for comparison’s sake, we’ve also added a line showing the average across all businesses regardless of size.
Naturally, the larger businesses hire more frequently – there’s more occurrences of turnover, backfill, stopgaps, and business growth/adjustments, meaning more job postings in general.
So don’t compare sizes – that’s never a good result.
Instead, look at how the wavelengths for each FTE bucket differs. Let’s look at earlier in the year first where two notable trends stand out:
- The 200+ category shows a dramatic jump in job postings at the start of the year, from 13.8 job postings in January to 14.5 in February, a .8 jump compared with a negative .5 for the 51-200 group (8.3 to 7.8) and a milder, even inconsequential -.1 for the 1-50 club (3.7 to 3.6)
- Meanwhile, April to May shows a more dramatic drop for the 51-200 group (-.3) compared with just -.1 for 200+ and a flatline for 1-50
And now, some dramatic fluctuations between the company sizes reveal themselves in the three most recent months of the dataset:
- The two larger buckets both saw a -.4 change in the average job postings per company from May to June, compared with the exact opposite for the 1-50 category
- After that drop, the largest companies in the dataset (200+ FTEs) saw a significant rebound of .9 more job postings on average in July compared with June, while the smallest companies (1-50 FTEs) saw a -.4 shift in their own job posting average
- And then, finally, while the largest and smallest companies saw more job posting activity in September compared with August, mid-sized companies (51-200 FTEs) saw the opposite trend, dropping .4 points
Speculation about the mid-sized companies is that many of them are in tech, and we know how hard SaaS companies are being hit by recession fears right now. This may be what we’re seeing here – and we know you’re likely an SMB that’s come here for insights.
So, let’s take an optimistic approach to this if we can: fewer job openings for your company size means there’s less competition with other employers when you’re opening a new job during this time. Does that mean we’ll also see more candidates now with a less diluted talent pool? Well, let’s find out.
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 September:
Just as we expected. The last two months see a pretty huge jump in the Candidate per Hire metric, ricocheting from a below-baseline 91.1 up to 106.6 in August and 106.8 in September.
That’s a staggering uptick – a swing of 15.5 and 15.7 percentage points. If you were getting 91 candidates in a job a couple of months ago, you’d be seeing 106 or 107 candidates just last month. And that’s just the average.
We talked last month about jobseekers becoming a surplus – this trend is continuing to happen, and that, again, may be a good sign for SMBs looking to hire right now.
What’s going on here?
It’s a bit of a no-brainer. The job market is slowing down a little bit – and consequently, candidates are becoming more available. We’re seeing this happening in our data, and in the data out there.
But what’s important is that the job market isn’t slowing down for everyone – it’s the opposite for enterprise-level companies. It’s worth noting that recessions have a disproportionate impact on smaller companies due to their lack of scalability and relatively inconsistent revenue stream, and that’s reflected in our dataset.
However, in the hiring landscape, we’ve noted that SMBs such as yourselves can take a cautiously optimistic approach to this – this developing climate actually may make it easier for healthy SMBs, in the short-term at least.
Then-CFO of Expedia Eric Hart would agree, telling investors in an August earnings call: “Not that I wish ill on any people out there from a layoff perspective or whatever else, but I think there could be an opportunity for us to ramp some of that hiring over the coming months.”
We also talked last month about how a recession would impact certain sectors, and not all of them at once. But we also talked about why we’re not really seeing a recession coming yet. We’re going to be a bit of a wet blanket and tell you that there may (will?) be a considerable setback in the global economy in 2023 according to many internationally recognized economists (including the head of the World Trade Organization) – and that the US Federal Reserve’s aggressive hikes in the inflation rate may be at the very core of it. Here’s an article outlining what’s going on.
And that’s not just in the US. That’s worldwide. Plan accordingly, including in your hiring.
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 November!
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.