ZipRecruiter recently released an analysis about current dynamics of labor supply and demand in the economy. The conclusion was that for the first time, the U.S. economy had exhausted its supply of workers.
“2022 was the first year on record where the demand of labor fully caught up to the supply,” said Julia Pollak, chief economist at ZipRecruiter.
She said that before the pandemic, on average, there were 2.4 unemployed workers for every job opening. That has moved to about 0.5 unemployed workers for every job opening.
ZipRecruiter is an employment marketplace founded to actively connect job seekers with employers, and vice versa, using sophisticated and state-of-the-art artificial intelligence. This process has improved the overall job search experience for millions of people and has helped businesses of all sizes find and hire the right candidates in a timely manner.
“Unlike traditional online job sites, ZipRecruiter acts as a matchmaker, curating job opportunities for job seekers and curating candidates for employers,” Pollak said. “Since our founding, we have connected more than 3 million businesses and more than 100 million job seekers.”
As chief economist, Pollak combines higher-level data from the Bureau of Labor Statistics with the data from the ZipRecruiter database to measure the health of the labor market. She then identifies and communicates hiring trends and insights to outside sources, such as media, and to job seekers and employers, allowing them to make accurate predictions and base future processes on these predictions.
Through the recent analysis, Pollak has noticed several hiring trends since the start of the COVID-19 pandemic. She noted that, on average, companies are seeing a 20% increase in the number of employees quitting each month. In addition to that, companies have increased hiring efforts by 15% each month. And because of the large shift across all industries toward remote work, more applicants are expressing this as one of their desires in a job. Only 12% of job postings actually offer remote work, she added.
“If every job in the economy that could be remote were remote, that would still only be 37%,” Pollak said. “In increasing numbers, workers are holding out for a job that gives them more flexibility regarding where and when they work.”
The report also said the trucking industry in particular is imbalanced when it comes to labor supply and demand, with a major increase in vacancies in truck driving and warehouse jobs. Pollak mentioned three factors that she believes influenced this the most: the pandemic-induced acceleration of e-commerce, the pandemic-induced destruction of small retail businesses and the acceleration of remote work.
But despite the troubles of the labor market today, Pollak encourages employers to keep digging into the data.
“You really need to know what’s happening around you and what people are talking about in order to overcome these staffing challenges,” she said.
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