UHY- Early Labor Market Data Indicates Shift to the ‘Big Stay’
Over the last few years, the labor market has been unlike anything we have seen. The influx of remote work due to COVID-19 and an increased emphasis on flexibility and work-life balance sparked a mass exodus of employees seeking more favorable employment arrangements that came to be known as The Great Resignation. Recruiting and talent retention were at the top of every business’s priority list, and companies needed help to keep their top talent, constantly fearing losing them to the next highest bidder.
For as long as we can remember, there were many more open positions than there were people to fill them. So when they came to the negotiation table, employees and job seekers held leverage over employers and could keep high expectations for their next role. Recruiting teams and leadership have been scrambling to address recruiting strategies and talent retention programs to become more creative to show appreciation to current employees and fill new roles.
Since then, there have been sustained interest rate increases by the Federal Reserve in the ongoing battle against inflation, a short-term banking crisis, and the continued deterioration of financial market conditions on a national and global scale in some regards. And even despite those factors, the labor market remained relatively resilient, and some believe that a strong labor market keeps us from entering a recession. The tide is turning, and employers are beginning to regain leverage in the recruiting war.
Data shows fewer quitters and fewer job openings
According to the Bureau of Labor Statistics, both the rate of job openings and people leaving their jobs have declined since Q4 2022. Year over year, although a small sample size for 2023, the quits rate is down considerably from nearly three percent to much closer to two. Another key statistic that could be a factor in the decreasing quit rate is that the percentage of salary increases for job changes is at its lowest rate since the start of The Great Resignation in 2021.
Variable conditions between industry, sector
While The Great Resignation seems to be ending for remote, white-collar jobs in many sectors, opportunities still exist in blue-collar jobs and other sectors. For example, the quit rates for finance, information, and insurance were all well below the average of 2.5%. At the same time, sectors like food service, leisure and hospitality, trade, transportation and utility, and professional and business services were all higher than 2.5% and, in some cases, closer to 4%.
The numbers also vary by geographic location; in the Northeast, the quit rate was 1.9% in March, the Midwest and West were much closer at 2.4% and 2.3%, respectively, and the South was a whopping 3%. Many factors and variables must be considered, but business leaders must keep an eye on the market because we have seen how quickly it can turn.
Demand for skilled accountants and finance positions remains high despite hiring slowdown
Credentialed professionals from various accounting and finance areas are one niche where our team still sees significant demand and open positions. The nature of these positions and the technical expertise required continues to be a challenging area for companies to address, even as there is a pronounced slowdown in hiring.
Awareness and agility key to navigating dynamic market
Experts warn that while employers are regaining leverage, they must be cautious and adjust recruiting and talent retention strategies accordingly to avoid facing the same issues that came with The Great Resignation. Even though the quit rates are down from what we have been experiencing, they remain above pre-pandemic levels, leading some to opt for the term “The Great Rebalancing” over “The Big Stay.”
No matter what term you choose to categorize the latest trends in the jobs market, employers in certain sectors can breathe a temporary sigh of relief that they won’t be dealing with extreme turnover and rejected offers from prospective candidates, at least in the short-term.