The Bureau of Labor Statistics released the November 2022 jobs report last Friday — and the results were largely unexpected. Last month, 263,000 jobs were added to the labor market, about 32% higher than experts anticipated at 200,000; additionally, the private sector added 221,000 jobs. The unemployment rate, on the other hand, remained relatively stable at 3.7%, which was both predicted by experts and unchanged from October 2022.
The labor force participation rate, which measures the percentage of eligible employees who are working or actively seeking work, dropped to 62.1% in November. In conjunction with this dip, the Household Survey showed a loss of 138,000 jobs for the second month in a row. Despite these market constraints, Hireology customers have managed to remain at the top of their hiring game. In November, our customers opened a cumulative 18,583 jobs, received 459,394 applications, and added 12,234 new employees to their staff. Additionally, our customers were able to decrease their average time-to-hire to just 20.94 days.
In November, leisure and hospitality led job creation in the private sector with 88,000 added jobs. Healthcare was second in job creation with 45,000 added; notably, 10,000 of those specifically in nursing and residential care facilities. Unfortunately, there were noticeable job losses in the retail trade industry (-30,000) and transportation and warehousing (-15,000), continuing their downward trends. Since August, the retail industry has fallen by 62,000 jobs; the transportation and warehousing has dropped 38,000 since July.
Another important metric to take note of from the November jobs report is the diffusion index, which is used by BLS as an economic barometer by measuring the span of employment changes across the economy. In November, this index was 63.5, down from 63.9 in October and 74.8 in November of last year.
What does all of this mean? Simply put: there are fewer industries hiring and a significant amount more actively reducing staff.
Part of the reason this trend is the balance between increased wages to offset inflation. Month over month, hourly earnings have increased dramatically at 0.6% ($0.18); year over year, that’s a 5.1% growth to $32.82. Production and nonsupervisory employees saw similar increases at 5.8% year over year to $28.10.
For business owners and hiring managers, this report is a bit of a mixed bag. While the good news is that there will be less competition on the hiring front, you’ll likely have higher payroll expenses to compensate for the inflation your employees experience in their day-to-day lives. On top of that, the labor market itself is contracting as laborers seek work outside of traditional employment opportunities (i.e., the gig economy).
For the last month of 2022, then, the focus will be on profitability and driving ROI through whatever means possible. In order to do this, business owners and operators will need to make the best impression possible for those workers who are looking for a job, as there are considerably less of them on the market. Taking a good hiring process into account, the next step will be to get new hires started on the right foot as quickly as possible so that they are not only productive faster, but that the employee can start to experience the reassurance that a reliable role provides this holiday season (and a paycheck, of course). Read on for our advice on how your business can position itself as the next right move for the right candidate.
Make a good first impression
In person, you determine your first impression of someone within 7 seconds. But what about job seekers who use the Internet to look for their next role?
In this case, job seekers rely on the information they can find about your business easily — which is why it’s so important to make it a point to regularly monitor and update your online presence. If you don’t have a dedicated career site yet, it’s time to create one; this space is your domain to advertise all of the awesome benefits that come with a career at your company, alongside all of your open roles.
You should also leverage your presence on social media platforms like Facebook and LinkedIn to your advantage. These are free platforms that you can use to your advantage by demonstrating your company culture, the benefits and perks that come with a role at your company, and anything else that can help persuade a potential candidate to submit their application. With the number of workers that have been let go or exited industries on their own volition, this would be an uphill battle — but it doesn’t have to be if you use your online presence correctly.
Get new hires through the door faster
The workers who are in the labor force want to work, plain and simple. For business owners, this means that the faster you can get a new hire onboarded, the better for you and for them. Your goal should be to get your new employee to productivity faster — and that all starts with digital onboarding.
With digital onboarding, you eliminate the need for new hires to waste their first day(s) of employment at your establishment filling out paperwork when you could have collected everything you need before they walked through the door. The process begins simply with an offer letter; once you have your newest team member’s signature in agreement to your terms, you can then send subsequent messages for document collection, references, and more. Instead of wasting their time (and your hiring manager’s), everything is digitized so you don’t have to go scrambling for physical copies of important paperwork.
Redefine shift work
The definition of work has been completely revamped over the past few years. Everything from how we work to when has been affected — and it truly showed in November’s jobs report.
Gen Z — those born between 1996 and 2012 — are dramatically altering the status quo in the labor market. These shifts have left many businesses unable to connect with potential candidates in a meaningful way that helps alleviate staffing shortages.
For Gen Z, for example, there’s no sense of work/life balance; instead, their adult lives have been a kaleidoscope of their personal life and work. With this in mind, it makes sense in a way that they would be less interested in flexibility than other generations. Think of this way: they’ll only apply for a position if it fits in their schedules.
To attract this population of workers, you need to redefine what a shift means at your company to let them work when they can and want to. Based on data from the November jobs report, this is already happening on a large scale. For private nonfarm payroll, the average work week decreased 0.1 hour to a total of 34.4 hours; production and nonsupervisory employees also decreased 0.1 hour to 33.9 hours. All this is to say: now is the perfect time to experiment with flexible schedules. Whether that looks like giving employees more power in deciding what their schedules look like week-to-week or offering shorter shifts to a great number of employees is entirely up to you!
Recruit smarter to manage spend
With the rising wages, your business needs to be intentional about where your dollars go. By that same train of thought, the new hires you bring on your team need to be of a higher caliber if you’re going to invest your time and money.
Odds are, the applicant tracking system you use has some form of insights and analytics that you can use to your advantage here. You can drive ROI at your company by optimizing your job syndication to make impactful hiring decisions. You need to know, dollar for dollar, which candidate pools are worth using to source applicants. For some businesses, niche job boards are where they see the best ROI, while others find more success with general ones. By monitoring the effectiveness of each over a period, you’ll be able to make smart recruiting decisions backed by data.
November saw more jobs created than experts predicted — but there is a noticeable constraint currently on the labor market. There are simply less industries hiring than are letting employees go.
With this shift, there will be more workers in the labor market looking for work, but they’ll be seeking wages that can help them survive the current levels of inflation. Thankfully, there are ways that businesses like yours can competitively hire while saving your bottom line. It all starts with making a good first impression in the digital space, getting new hires to productivity as fast as possible, rethinking shift work, and managing spending through smarter recruiting.