Examining the Unusual State of the U.S. Job Market in 2021

In a recent episode of Talent Talks, Jenn Terry (VP of Strategic Initiatives, Joveo), and Dan Sapir (General Manager Americas, Joveo), discuss how employers in the U.S. job market are coping with the increasing gap between candidate supply and demand in 2021, following large-scale easing of lockdowns and overall economic recovery. They explore how the lucrative stimulus checks issued by the U.S. government have left candidates hesitant to return to their jobs. They also talk about how these macro trends have impacted hiring in the gig industry.

Watch the video or check out some of the highlights in the transcript below!

The Gap between Candidate Supply and Demand 

Jenn: Today I want to discuss the state of today’s job market. Dan, not too long ago, you spoke about how things were shifting this year for the recruitment industry. From what I see on social media lately, there’s a lot of people who are posting for job vacancies. However, not many people want to work. Can you give us a little bit about your perspective on that?

Dan: Since the government started providing stimulus checks to citizens last year, people observed that it was more lucrative for them to not have a job. Before COVID-19 hit, there were 6.5 million open jobs, on average, at any given point. However, the job market plummeted to less than half of the number since the pandemic began. Post the stimulus checks, everyone felt comfortable enough to wait out the pandemic and not go to work. After the lockdowns eased, people began showing up to interviews, but with the arrival of the second round of stimulus checks, the supply dipped lower than ever.

This past month, there were over 9 million open jobs in the market. There’s more demand than usual, but fewer job seekers getting hired across industries. There’s a massive gap between demand and supply, and it’s the first time that we have ever had to witness this.

Jenn: So I’ve usually been on the other side of the fence. As a talent acquisition professional, I was always looking to hire candidates to fill various job positions. It seems like regardless of location, some industries are hit harder than others, but there’s also this general apathy of job seekers, right? I remember reading somewhere that the average number of clicks per job has reduced by 40% in the last six months. Why’s that?

Dan: I think it’s also because, in my opinion, not a lot of the jobs that are open right now are the most interesting or exciting jobs to the average job seeker. Companies that are hiring in massive numbers at the moment tend to be in operations or logistics, or along those lines. Those jobs might not pay well, or might be physically taxing for an individual to take up. Because of the general thought that it might be a better idea to stay at home than make a few more bucks working, there is a lot of apathy for getting a new job.

Even in jobs with a high barrier to entry, there has been a subtle shift, and increased competition for the same job seeker, whether it is in the blue collared industry or the white-collared industry. Due to work-from-home policies, geographical location is not an issue anymore, and relevant candidates have been facing an increased demand all across the country.

Getting Candidates Back To Work

Jenn: What would make people come back to work? As in, what should employers do to get people back to work? Do we pay them more? I remember that being a technology recruiter in the 90s meant that I could name my price. This situation feels a lot like history repeating itself. Thoughts on that?

Dan: I agree with that. These cyclical trends tend to repeat over and over again. The only difference here is that, in terms of naming your prices, it’s not just one sector- it’s everything.

Jenn: Yes, and this puts entry-level workers in a position where they can bargain, and demand better wages, benefits, and so on. This leads to subtle unionization of entry-level jobs and it’s risky. The pandemic also showed people how indispensable they are to the economy, and allowed them to demand better wages.

Dan: I struggle with that as a concept. I feel like certain companies are now facing the heat and adding benefits, while the others are just dealing with the churn. So in the end, it all boils down to how the company decides to deal with the issue.

Jenn: This leads us to generate more candidates, which means that for companies like Joveo, there is an added opportunity to serve our clients better. But the reality is that the price you were paying to get a candidate last year was much lesser than the price we are paying now. How much higher is the average CPA this year than it was at this time last year?

Dan: With certain sectors doubling and some a third larger, CPA is all over the place at the moment. It certainly isn’t cheap now.

How Programmatic Technology Can Help

Jenn: If you were talking to a TA leader, what would be your snippet to give to them on why it’s harder to find talent, why it costs more, and how to face those challenges?

Dan: I would ideally invest in the employer brand as much as possible. I would also take steps to ensure that I deal with reducing churn wherever I can. You also just have to bid into the marketplace and share the statistics with the top management – saying, “look, it’s not just us.”

Everyone in the industry is seeing this massive increase in their Cost per Apply in downstream hires and so on. I would look for whatever part of that funnel I could control, which is, employer brand.

Jenn: Right. So one of the best things about working for a company like Joveo is that it allows you to put money in programmatic advertising. That is, it allows you to put the money that you need and the positions that you need it and where you were talking about controlling the funnel. The other thing that I would just share with my TA brethren is that the funnel needs to be efficient and your employment brand health at every conversion step, right? You’re going to lose far more to funnel attrition than you’re going to do to elimination.

Dan: Yes, and we deal with this all the time. You know, we see certain people that have longer application processes and their click to apply rate is a percentage or two.

But, you have other applicant tracking systems where they’re competitors, where it’s like you’re 20, 30, 40% click to apply rates. If you can make that part of the funnel better, you’re going to see a significant return on investment on that, right?

You talked about the change to programmatic job advertising. At the beginning of COVID where there were layoffs and staff reductions – all of a sudden it’s a one-person show dealing with the whole talent acquisition organization. You can’t deal with a hundred vendors yourself. You definitely can’t go figure out where the best ROI is on each one of these individually. And so we see certain people on certain sites end up paying a few bucks a click, three or five bucks a click more on certain campaigns, compared to if they just diversified across other publishers. This can reduce that cost sometimes by 3x.

The Impact on Hiring Gig Workers

Jenn: That brings me to the next question in this big continuum. We now have a lot of people that aren’t taking on the traditional job paths. They’re getting some stimulus checks, which are going to wind down and maybe they’ll start getting lesser and lesser. How do you think the gig economy is going to play into all of this?

Dan: We’ve seen certain parts of the gig economy halt, like ride-sharing. People are not doing that the same way they used to. In fact, even when I’m on Uber and I’m looking for a ride, I see fewer drivers out there. It used to cost me $7 to go down the street, but now I’m seeing $12 or $20 sometimes without surge pricing. So there’s an imbalance there, but in other parts of the industry, like food delivery – I think a lot of people have been flocking to that because they can go shop and not really be in contact with anyone.

I think it’s really an important piece of the overall economy. The other interesting thing is job sites are figuring out how gigs fit into their overall ecosystem. When I used to run a job site a few years ago, we’d run explicit email campaigns for certain promotional gig economy jobs. We knew they’d give us a lot per click or per apply downstream. But if you think about that from a job seeker standpoint, they see the same offer so many times and they get really annoyed by it. They start hitting your spam button and then you’d stop getting such good inboxing.

An interesting thing that’s happened recently is that Indeed has built a separate ecosystem for their gig jobs. As a result, it has made it a lot harder for good companies to get the same traffic from Indeed that they’re used to, and this has been another reason that good companies have started flocking to us in a number of different capacities.

Jenn: True, the broad distribution not only helps from an alternative to the traditional posting, but it also allows you to control your cost appropriately depending on the number of candidates.

Dan: Companies have a repetitive need for a certain amount of candidates. Of course they’re opening up new markets all the time. Especially in new markets, they wonder how they can get people as fast as possible. So programmatic is great at that because instead of sending your job to one website and hoping that everything works out, it helps you with getting that fast start, in every place you’re guaranteed a fast start. A lot of people rely on us for that type of tactic as well.

Jenn: It’s super important, right? Because if you look at the overall picture, the need for drivers is going up. So the cost to get those drivers is up around 200%. The number of people willing to do that job has probably gone down. So now, it isn’t just about qualification, it’s about interests.

Thank you, Dan! It has been a pleasure as always. I’m sure I will have you back again to talk about something else. Great information about the job market and gig hiring!