Dear SHRM HR Directory members,
We hope this update finds you well and thriving in your respective endeavors. If you’re wondering what’s up with the picture above, it’s an AI-generated rendering of how my team and I feel after filling a difficult search. The best part? Our loyal customer base gives us free refills! [If you haven’t yet worked with our team and want to explore a fractional recruitment arrangement, send us an inquiry here.]
In addition to our mid-year labor market insights, we have some exciting news to share with you. Let's dive in:
Labor Market Report - June 2023
The economy demonstrated its resilience by adding a solid 209,000 jobs in June, albeit just below economists' expectations of 225,000. This indicates a robust labor market that continues to thrive, although it has cooled down from the record-breaking highs witnessed in 2022. Employers are displaying confidence in expanding their workforce, both by creating new positions and backfilling open roles. With the June job gains, the total for 2023 has reached an impressive 1.7 million for the first half of the year, surpassing the projections of many economists.
As we witness a normalization of job gains, the June figure aligns closely with the pre-pandemic average of 200,000 jobs added per month. It's worth noting that since December 2020, monthly job gains have consistently stayed above 200,000.
However, job gains for April and May were revised downward by a total of 110,000, suggesting that the labor market cooled off slightly during those two months compared to the initial estimates.
Demand for Workers Starting to Slow
The labor market remains historically tight, posing a significant challenge for businesses seeking top talent. Although job gains have returned to pre-pandemic levels, the number of job openings has shown a slight decline, standing at 9.8 million in May compared to the peak of just over 11 million per month last year. Nevertheless, the current figure is significantly higher than the 2015 to 2019 average of 6.4 million monthly job openings.
As demand for workers begins to moderate, there is an expectation that record wage growth will ease. However, the latest report shows that 12-month wage growth has slightly ticked up to 4.4%. This sustained wage growth indicates that employees are enjoying better compensation despite the adjustments in the labor market.
Layoffs Hold Steady as Unemployment Ticks Down Slightly
The hiring landscape continues to thrive, with layoffs holding steady at 1.6 million in May, below the pre-pandemic average of 1.9 million per month. Moreover, the unemployment rate has ticked down to 3.6%, just above pre-pandemic lows. With nearly 10 million job openings and approximately 6 million unemployed workers, there are 1.6 open jobs for each job-seeker.
The labor market has demonstrated remarkable strength during the first half of 2023, outperforming many expectations despite certain challenges, including tech-related layoffs and rising interest rates making headlines. As we look ahead to the second half of the year, we predict a continued moderation towards historic norms. Nevertheless, with a labor force growing at a slower pace than demand and unemployment rates remaining historically low, the labor market is set to remain fiercely competitive.
Upcoming Speaking Engagements
We are thrilled to announce that two industry experts from Source and Recruit will be gracing major HR conferences in September. Mike Rasmussen, SHRM-CP will be speaking at SourceCon in Minnesota, and Matthew Burzon, SHRM-SCP will be speaking on the subject of Chat-GPT’s use in recruitment at the SHRM Vermont State Conference. These events are perfect opportunities to learn from and network with thought leaders who are shaping the future of talent sourcing and HR practices. Mark your calendars and don't miss out on these insightful sessions.
As always, we encourage you to keep a close eye on labor market trends and compensation patterns to stay ahead of the competition and remain a magnet for top talent.
Thank you for being a part of our vibrant community at The Source and Recruit Company. We value your trust and look forward to sharing more updates and insights with you.
Matthew Burzon, SHRM-SCP, Founder/Principal