Are Companies Hiring Right Now?

how is the job market right now

Lately, our clients have been asking the us same question: Are companies hiring right now?

We understand why there might be some confusion around the job landscape in this country. For the past two years or so, we’ve been bombarded with conflicting headlines around U.S. employment.  

For example, tech giants like Meta, Twitter, and Microsoft are laying off tens of thousands of people. Meanwhile, employers in other industries are frustrated by a labor shortage even as wages rise.

Adding to the confusion are recent reports from the Bureau of Labor Statistics stating that joblessness is hovering around 3.5%, which is the lowest rate in decades.

Let’s sift through the noise and see if we can answer the question: Are companies hiring right now?

Hiring Slowdown in the Tech Industry

how is the job market right now

The tech industry was booming in recent years as the Covid-19 pandemic forced us all to stay home and rely more on technology to keep us connected. Some of the recent layoffs and hiring freezes are due to the natural correction of this bubble, but there’s more to it than just that.

Another less-talked-about reason for the hiring slowdown in tech is because of elevated scrutiny and regulations put in place by governments worldwide. Tech companies are under pressure from lawmakers to answer for recent data breaches and the spread of false information.

And regulators aren’t just asking questions; they’re taking action. Tech companies are facing lawsuits. Defending against these legal actions is time-consuming and expensive – even for tech giants. They’re keeping a closer eye on what they spend money on, which means less hiring.

Another reason for the hiring slowdown is the fact that the tech industry has been successful in delivering on their promises. As stated earlier, the pandemic forced many employers to rely on technology to continue to do business as their entire staff was remote. Suddenly everyone was relying on Zoom, Slack, and countless other tech products to get work done.

After an initial phase of panic, many firms realized they were actually more productive than ever while their employees worked from home. In short, they could do more with less people. As a result, the vast majority of employers have decided to move to a permanent or at least hybrid work-from-home model. Employees love the flexibility as well, which leads to stronger employee retention and less hiring.

Higher Interest Rates Dampen Hiring Trends

how is the job market right now

Another reason hiring may be slowing down is that interest rates have been on the rise.

When interest rates are low, it’s cheaper for businesses to borrow money. That gives businesses an incentive to borrow money needed to hire new workers.

When interest rates are high, however, businesses are much less likely to borrow money. That means, they have less money to hire new workers. Employers often institute hiring freezes in high-interest-rate environments.

It’s worth mentioning, however that we’re seeing a bit of an economic anomaly right now. There’s been a flurry of interest rate hikes in recent months, which has slowed hiring, but not to the extent expected. Meanwhile, the Federal Reserve Bank doesn’t just want to keep raising the interest rates.

We’re not sure how this will eventually play out, but we are keeping an eye on it for sure.

The Rise of AI is a Real Concern 

Artificial Intelligence is the elephant in the room. It’s here. It’s powerful. And many of us may expect this new technology to impact our lives, we just don’t know by how much.

Well, as for now, the robots aren’t coming to replace you. However, some companies are deciding not to hire new workers for jobs they believe AI could handle.

For example, IBM has paused hiring on certain HR roles and is using AI instead. The company imagines that 26,000 HR roles could be automated by 2028. That’s 30% of their total workforce!

To be clear, this does not mean they are firing people and replacing them with AI. However, that 26,000 roles that won’t be on the job market anymore.

This type of experimentation with AI is happening in all sectors and will definitely have an impact on companies’ hiring practices.

The Noise Around Quiet Hiring

how is the job market right now

Many of us might be familiar with quiet quitting. That’s when an employee does the exact job that they are expected to do. They don’t work late, take on “stretch” assignments, or check emails over the weekend.

The counterpart to that is quiet hiring, which is something different. 

Quiet hiring is when employers give additional responsibilities or increased workload to existing employees without a corresponding increase in pay. In that way, companies are getting the work done, but not needing to spend the money to hire a new person.

For example, imagine that there are four people on a team in a company. There may come a time where it makes sense to hire a fifth worker.

Instead of hiring that person, the team’s manager may increase each person’s workload by 25%. In essence, the work effort of a fifth person has been added to the team, but without actually hiring anyone.

What’s the Bottom Line? 

For all of the reasons described above, there does seem to be a slow-down in hiring in the United States at this time. But that doesn’t mean hiring has come to a complete halt, so there’s no need to give up your job search.

Consider refreshing your approach to your job search. You may need to expand your network, learn a new skill, consider new career options, or revamp your professional resume.

If you need guidance in how to enhance your job search, reach out to Empire Resume. We’re here to help you land your dream job. 

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