Job seeker sentiment cooled in August, according to the ZipRecruiter Job Seeker Confidence Index, but it may be influenced by headlines about layoffs and hiring freezes more than by the facts on the ground. As of the end of July, U.S. businesses still had 11.2 million job openings to fill (60% more than before the pandemic) and they were hiring 6% more new staff each month than before the pandemic, according to the JOLTS Report from the U.S. Bureau of Labor Statistics. The result is vastly expanded opportunities for job seekers, and far greater job security than before the pandemic.
Here are some highlights from the report:
- Layoffs and firings hit a new record low in accommodation and food services. Just 88k employees were discharged in July, down from 144k in pre-pandemic February 2020. Hospitality companies tell us that what was once a “one strike, you’re out” rule for employees who failed to show up at work without notice is now more like a “ten strikes, you’re out” rule. They cannot afford to fire workers because they cannot afford to replace them. The decline in terminations in industries like hospitality have been so large, they have more than offset the increase in layoffs in the tech sector (totalling 74k positions all year).
- Layoffs aren’t just low in hospitality, but in small businesses more generally. July saw a record-low layoff rate (0.7%) in small businesses with 10 to 49 employees, where layoffs and terminations have been unusually low for months. In an extremely tight labor market where businesses are struggling to attract candidates, employers are holding onto the workers they’ve got, despite rising recession risks and business uncertainty.
- With 321k job openings, enterprises recorded the highest number of vacancies in July. Job openings in enterprises increased by 18% over the month, accounting for almost half of the overall increase in job openings. The spike is big enough to compensate for last month’s slowdown in vacancies and bring the trend back to where it would be without any cooling. The number of vacancies is 3.6 times the pre-pandemic average right now. And if trend continues, we would see the number of job openings to hit 4 times the pre-pandemic levels within months.
- Despite a hiccup in hiring last month, large businesses resumed their hiring plans in July. Hires in large businesses with 1,000 to 4,999 employees bounced back strongly in July, increasing 24% over the month. Despite a spike in hiring in large businesses, the total number of new hires in the private sector decreased slightly due to a slowdown in mid-size businesses. It looks like recession planning is off the table for large businesses.