After Covid-19 restrictions were lifted and the economy reopened, the job market became hot. Businesses couldn’t find—and continue to not be able to find—enough talent to meet their needs. If you’re searching for a new job, you have an abundance of choices. However, the United States is starting to experience events that may cause the job market to slow down. Sadly, the good times cannot—and will not—last forever.
What Is Spooking The Job Market?
Within the past year, the labor market has seen a robust recovery. On Friday, the U.S. Department of Labor reported that 428,000 jobs were added in April, with the unemployment rate remaining steady at 3.6%.
Last month, the New York Times reported, “The economy has recovered more than 90% of the 22 million jobs lost at the peak of the pandemic’s lockdowns in the spring of 2020—a far swifter rebound than forecasters initially expected.”
The stock market was also soaring and setting record highs regularly. However, in the last few weeks, stocks have plummeted. The reasons behind the sudden and swift decline include inflation driving up costs, fear of the U.S. getting involved with the Russia and Ukraine war, domestic political tensions and concerns over a recession on the horizon. Consequently, there have been several companies that have either paused hiring or commenced layoffs.
Why Companies Are Looking To Layoff Workers
Corporate executives crave certainty. They want to know that the future looks bright. If management feels that the economy and events align so that their business will make money and prosper, they’ll aggressively invest in hiring more staff. When there is a high demand for their products and services, smart leaders will add headcount to keep stoking the growth.
Conversely, when the C-suite is concerned about the future and worried that things may take a turn for the worse, they’ll reign in expenditures. This includes cutting back on hiring and culling the workforce to cut costs. Executives will say that once the situation improves, they’ll start hiring again. Until then, management will hunker down, conserve resources and wait out the bad times.
The Companies Putting On Hiring Freezes And Laying Off Workers
Layoffs.fyi Tracker, as the name suggests, is a site that compiles a list of downsizings in the tech and startup space. It began during the early days of the pandemic when companies were aggressively firing and furloughing workers. Once the economy reopened, the number of pink slips subsided. Now, there is a concerningly large number of businesses in the tech sector laying off personnel.
Over the weekend, Dara Khosrowshahi, CEO of Uber, informed employees through email that the ridesharing app company would start to treat hiring like “a privilege.” The chief executive said Uber’s decision to pump the breaks on hiring is due to the “seismic shift” in the market.
Last week, Meta stated that it would reduce hiring for most mid-level and senior roles at the company. A spokesperson said in an email to CNBC, “We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly.”
Mortgage startup Better.com, best known for the CEO who fired people via a oneway Zoom video and called employees “dumb dolphins,” laid off approximately 4,000 people.
At the end of April, in a blog post, online trading platform Robinhood announced it would be trimming 9% of its workforce, citing “duplicate roles and job functions.” The company previously grew its headcount from around 700 employees in 2019 to 3,800 by the end of 2021. CEO Vlad Tenev wrote, “While the decision to undertake this action wasn’t easy, it is a deliberate step to ensure we are able to continue delivering on our strategic goals and furthering our mission to democratize finance.”
On April 28, Netflix laid off staff from its Tudum fan-focused site, which launched in December. The layoffs took place after the streaming giant lost $54.4 billion in market capitalization overnight. It was the “largest, single-day decline in its history.” The stock began plummeting after it lost 200,000 subscribers last quarter.
Peloton, Cameo, Wells Fargo, Noom, On Deck, Workrise, and others have also announced layoffs or temporary freezes.
In a faltering job market, you don’t want to be the one fired. It will be hard to find a new job when a large number of companies in your industry are also laying off people. You must ensure that you are not replaceable. To do this, you have to prove to your bosses that they need you more than anyone else on the team.
The first thing is to show up at the office, even if you’re a remote worker. There is a known proximity bias. If you show face time, it curries favor with the managers, compared to the folks at home who can become out of sight and out of mind.
Volunteer for assignments. Take on tasks no one else wants. Find out what you can do to help your boss look good. Then, take action. Make sure that important people know that you are working hard and delivering every day. Keep track of your accomplishments and share the data with your supervisor.
Have a good positive attitude. Don’t complain, gossip, or criticize. It's called playing the game. The object is to win by keeping your job or at least hanging on until you can find something else outside of the company.
3 Myths You’ve Heard About Skills-Based Hiring
GRADS OF LIFEThe U.S. labor market continues to recalibrate in 2022. A survey of more than 2,300 senior managers found that 65% hope to add new permanent positions in the first half of the year. Another 33% are vying to fill vacancies, with over 10.8 million job openings across the U.S. currently. As a consultancy working at the forefront of inclusive employment, one thing is clear to us from our client engagements: Traditional hiring practices are not a viable means of meeting workforce demands. Companies must modernize their approach to stay competitive. That means embracing skills-based hiring.
Skills-based hiring emphasizes candidates’ technical skills and core competencies over degrees or credentials as the most determinant factors of job success. The practice calls on hiring teams to define the required and preferred skills for a role and to objectively evaluate those skills as a way to minimize bias in the hiring process.
Leading companies are increasingly making the shift to skills-based hiring, including many involved with OneTen, the Business Roundtable’s Multiple Pathways Initiative, Markle Foundation’s Rework America Alliance, and more.
But the movement is not without misinformation. Below we discuss some of the biggest myths around adopting a skills-based approach – and how you can address them to drive a culture shift at your company and beyond.
1. Skills-based hiring is unfair to college graduates.
Skills-based hiring is not about eliminating college graduates from consideration or lowering the bar for entry. It’s about articulating the specific skills the degree is intended to serve as a proxy for. In this way, degree-holders and candidates skilled through alternative means can both be considered for the role. This helps democratize economic opportunity for all and expands the talent pool companies can access.
Degree inflation – the demand for four-year degrees in positions that previously did not require such credentials – has fueled a prestige economy that is costing employers. Under this paradigm, many jobs that were once upwardly mobile have become inaccessible to all but those who can afford the mounting cost of higher education. This has disproportionately excluded talent from lower-income communities, especially people of color. Skills-based hiring offers a practical means of addressing this inequity and restoring candidacy to the 66% of Americans who do not have bachelor’s degrees, including more than 75% of Black people and more than 80% of Latinos.
2. Skills-based hiring leads to bad hires and hurts business.
Taking a skills-based approach can lead to more effective candidate screening and hiring. Hiring based on skills is five times more predictive of future performance than hiring for education and 2.5 times more predictive than hiring for work experience. Moreover, many employers report that employees without degrees are equally as productive or, in some cases, more productive than college graduates.
Additional advantages of skills-based hiring include decreased time to hire, increased employee engagement, and lower levels of attrition.
3. Skills-based hiring isn’t a realistic talent acquisition strategy for our geography.
Perhaps it wasn’t in the past. Historically, hiring teams have taken a hyper-local lens to recruitment efforts. With the rise of remote work, employers can launch wider candidate searches and find people that match the skills demands of their market.
On a grand scale, this might look like building partnerships with workforce development organizations in under-resourced areas to establish pipelines of skilled diverse candidates to fill remote roles. Through these partnerships, companies can simultaneously drive business outcomes and economic equity.
While designing and launching skills-based hiring takes time and requires intentional learning and unlearning, your company, employees, and community will ultimately benefit. Investing in skills-based hiring now will prepare businesses for the skills-driven future of work, and create an economy where all Americans can meaningfully participate in that future.