On paper, the job market
now looks solid. Unemployment hit a 54
year low at 3.4% back in January of 2023, and U.S. employers added 2.7
million people to the payroll in 2023 alone. The January jobs report
also showed the 2024 labor market was off to a solid
start. When we look at the hard
data, it seems to suggest that the labor market has
been fairly strong and in fact, surprisingly
resilient, especially after 2023 where we had
headlines about layoffs and forecasts of
recession. But when you look at the soft data,
Americans tend to be a little bit less
optimistic about how the economy is doing and in
particular about the job market. Politicians just talking
about how the economy is so great. I just want to
scream from the rooftops. But then how come no one
can find a job? Recently, unemployed full
time workers applied to an average of 30 jobs only
to receive an average of four callbacks or
responses. If you look at the job
vacancies, they're down a little bit, but not down
enormously. But if you ask, you know, how hard
are you working to fill them? The answer seems to
be not very right now. So why does it feel so
hard to get a job right now? And is the U.S. labor market as strong as
it seems? Hi. My name is Jenna
Jackson. I'm from Ardmore,
Pennsylvania, in suburbs of Philadelphia. This job market is like
the craziest that I have ever seen. I was frustrated just
with how my job search process has been going. I haven't quantified how
many applications I've applied to. It would be a
little depressing, I feel at this point to quantify
it. But it was definitely in
the hundreds, at least. 55% of unemployed adults
said they were burnt out from searching for a new
job. Younger generations were
impacted the most, with 66% complaining of
burnout stemming from job search. Looking for a job can be a
full time job. There's a lot that goes
into it. Filling out applications
online can be tedious and can be time consuming and
can be really stressful. Every day, it just feels
like Groundhog Day or waking up doing the same
thing. When I looked at the data,
if you just applied to a job through a job board,
the odds of you getting hired were about 3%. So you got to apply to a
lot of different jobs in order to have a chance to
get them. And you're going to get
lots and lots of just no responses. And it's
exhausting if you do that. A 2023 study from
Glassdoor revealed that mentions of applicants
being ghosted by their prospective employers
grew substantially since before the Covid 19
pandemic. We often hear from job
seekers that they send out tons and tons of
applications, and they don't even hear back, and
that that can be very emotionally and mentally
taxing. It's unprofessional as
well. It's like, especially if
you're going to take the time to do an interview
with them, you could at least let them know. I think it's because of
technology. It's easy to put up a job
and so many people can see that job. So when you get
such an overwhelming response, it's often very
difficult to get back to every single solitary
candidate. Certainly during the
Great Resignation, when the market was at a fever
pitch, companies were being ghosted by
candidates, which is something that hadn't
happened as much in the past. So we've seen it
happen on both sides of the fence. And I think a
lot of it is caused by just sheer volume. The time it takes for a
company to hire an employee also hit an all
time high at an average of 44 days during the first
quarter of 2023, with some industries like the
energy and defense sector taking more than 67 days
for hire. Application process has
been getting longer and longer with going through
multiple rounds and doing assessments. My worst
experience so far was with a large financial
institution where I had a phone screen with them,
and I also had a zoom interview with one of the
team members. After that, I had a case
study where I was given very vague instructions. They got back to me and
said that the team didn't feel like there was
enough, that they gave me another attempt. In the end, I just ended
up just going back to the recruiter and saying
like, you know, 'I'm sorry, I don't think this
is the best fit.' Because even if I did move
forward and they were okay with my revision, there
still would have been three more interviews. A lot of employers think
that doing more interviews is a good thing. And it's not a good
thing. Most job interviews are
not doing anything important. They don't
know that the questions they're asking are going
to reveal anything about whether you are a good
candidate or not. They don't know when they
ask the question what the right answer is. And this is a development
that's been going on for a while. It's not a good
thing for anybody. And even if the labor
market was stronger, you would still be seeing
some of this. There are generally two
terms economists use to describe the state of the
job market tight and loose. Usually when economists
talk about a tight labor market, they mean hot,
essentially. Mostly what that means is
it is difficult for employers to find
workers. And so in that context,
employers tend to be more hesitant to lay off
workers. They tend to try to be
more aggressive about how they hire, whether that
means offering bonuses or offering on-the-job
training. By contrast, a loose labor market or
cold labor market is one where there might be
layoffs, it might be hiring freezes. It might
be difficult to find a job for workers who are
either already in the workforce or workers who
are trying to enter the workforce for the first
time. The American labor market
has remained extremely tight following the end
of the pandemic. So many companies had to
scale back during the pandemic, and then all at
once, companies were able to hire again as their
businesses started to move. So you had so many
job openings happening all at the same time. Job openings surged to
historic highs while the country continued to
struggle from a devastating labor
shortage. With so many plentiful job prospects,
even working Americans quit their jobs at a
record pace for new jobs, in a trend that came to
be known as the Great Resignation. But the job
market is beginning to show signs of cooling. There's less of a frenzy
on the part of the employers. If you're
somebody who wants a job, you would like a frenzy
on the part of the employers because you
would like to have lots of people trying to hire
you. I think one interesting
thing about the job market right now is that it is
strong, but the hiring rate is low, and
similarly the layoff rate is actually very low. The layoff and discharge
rate in the U.S. has been hovering near
historic lows, despite the barrage of layoffs
reported specifically within the more visible
tech and media sectors. So I think what might be
going on here is that employers are hesitant to
lay off workers. They're hesitant to push
workers out because of their recent experience
with labor shortages. But on the flip side,
that also means that a lot of workers are sitting
tight. They're not quitting, they're not
being laid off. And so there aren't as
many of those opportunities you would
normally expect from attrition for folks who
are trying to break into those roles. Meanwhile, research from
LinkedIn found that job seekers search intensity
in the U.S. grew by 27% in 2023
compared to the year before. In 2022, there
was one open job for every active applicant on the
LinkedIn platform. By 2023, the ratio turned
to one job for every two active applicants. Right now in the
marketplace, what we're seeing is both employers
and employees being a little bit more
selective. Everybody's taking a little bit more
of a measured approach right now, being a little
bit more selective in their choices. And that's
why we've seen a little bit of a cooling in the
marketplace. However, experts reassure
that the cooling labor market is no reason for
concern yet. It is important to have a
perspective that's a little more historical on
this. You know, if you're
hunting for a job right now and you can't find
one, it looks like a lousy job market to you. But
compared to your parents experience, it's a great
job market. I think that sentiment is
outcomes minus expectations. So in 2021,
2022, there were labor shortages. Companies were
hiring very aggressively. And so even if 2024 is
shaping up to be a relatively healthy labor
market by recent comparison, it doesn't
feel quite as strong. A cooldown in the labor
market was also what the Federal Reserve had
intended with its series of interest rate hikes. If you are the Federal
Reserve and you want to slow the economy down,
that means you want to slow the markets down a
bit. The biggest market is the
labor market. If you look at what
employers do, where their budget is, it's mainly
going to labor. So you can't easily cool
the economy down unless you cool the labor market
down. Experts also noted that
the health of the labor market will largely rely
on where the economy is headed next. If the economy does slow
down more significantly in 2024, if we see a
recession in 2024, the labor market can be
somewhat resilient, but it can't fully buck the
broader economic trends. And so that's definitely
something we want to watch out for in 2024. It's not a guarantee that
the job market is going to remain as strong. Broadly speaking, we
might have some optimism about the economy. That doesn't necessarily
mean that the job search is an easy process. I guess the big thing I
would say is it's not you. It's not you. It's
happening to thousands of other, hundreds of
thousands of people at the same time. And it has to do with
what's going on in the bigger economy. It has to
do with uncertainty, but it also has to do with a
lot of quirkiness inside employers about how they
handle hiring these days. It's definitely, um,
difficult out there. But I just encourage you
not to give up and still keep diving into your
into your network and stay tight with family and
friends, just to give you the emotional support
that you might be lacking at the moment and to give
you that confidence that you can do it.
