We are living in interesting times. The job market is shifting from a job seeker market to one where employers have the upper hand.
In May 2023, the number of jobless persons increased by 179,000 to 858,000, while
the number of long-term unemployed remained unchanged at 1.2 million,
accounting for 19.8% of the total unemployed.
The U.S. employment market showed resilience despite a slowing economy, with nonfarm payroll employment growing by 339,000,
exceeding analyst estimates and maintaining a pattern of steady job growth.
However, the unemployment rate rose to 3.7%, a jump from 3.4% in April, which
ranked near 50-year lows.
In a competitive/tough job market that favors skilled and educated workers, about
25,000 people enter the job market each month.
Jobseeker complaints have been mounting in this market, to be sure.
But on the flip side, how has this economy impacted the recruitment industry?
Recent data suggest a rosier picture for those on the employer side of the hiring desk. An article on 2023 hiring trends said, “Employ data reveals that 45% of talent teams plan to add new recruiting team roles in 2023 ”.
According to the National Association of Colleges and Employers’ Job Outlook 2023 Spring Update, employers are planning to hire 3.9% more graduates from the Class of 2023 than they did from the Class of 2022. And then there is this article from SHRM which speaks the prevailing wisdom among economists that “…the labor market theme of the year will be a return to normal." Here is a deeper commentary on that from the same article.
"A few things will weigh on the labor market this year, starting with inflation controls," said Jay Denton, chief analytics officer at LaborIQ, a compensation and labor market analytics software company based in Dallas. "Higher interest rates, the lack of available talent and the shift to pre-pandemic behaviors will all impact the labor market."
Hiring should start to moderate, Denton said. "There are simply not enough people in the available talent pool. The labor force is at least 2 million people below where we had expected to be by now without the pandemic happening."
Hiring may slow, but hiring activity will still be elevated, Taska said. "We will still see a lot of hiring, because companies still have a lot of roles to fill," he said.
As the market gradually stabilizes, companies still must hire, and that may be what is driving recent data projections on the recruitment industry.
It's good to be in RPO
The market for Recruitment Process Outsourcing (RPO) is expected to grow significantly in the coming years according to several sources. Here are some highlights from various research data.
- The global RPO market size was valued at USD 6098.9 million in 2021 and is expected to expand at a CAGR of 6.62% to reach USD 6502.65 million by 2030.
- The global RPO market is expected to grow at a compound annual growth rate of 18.5% from 2020 to 2027 to reach USD 20.77 billion by 2027.
- The recruitment process outsourcing market worldwide is projected to expand with a CAGR of 13.9% during the forecast period from 2022 to 2030.
- The RPO market CAGR is expected to be 22.3% during the forecast period and the market size is expected to reach nearly US$ 41.02 Bn. by 2029.
The growth of the RPO market can be attributed to several factors, including increased investments by international corporations across numerous sectors, the increasing labor markets in regions such as India and China, and the need for companies to stay competitive in the market. The on-demand segment is expected to hold its dominant position in the market during the forecast period. North America led the RPO market globally, followed by APAC and European regions.
Executive Search is growing in a competitive space
The market for executive search is a $12 billion industry globally. The Executive Search (Headhunting) Market size was valued at USD 17303.35 Million in 2021 and is projected to reach USD 30,318.35 Million by 2030, growing at a CAGR of 6.4% from 2022 to 2030. This projection cites a reversal from the previous five years where the market size of the Executive Search Recruiters industry in the US had declined 0.3% per year on average between 2017 and 2022.
Temp agencies are growing in a more competitive space
The market for temp agencies in the US has grown on average 2.4% per year between 2017 and 2022. The global staffing agency software market is projected to grow from $418.3 million in 2022 to $772.8 million by 2029, at a CAGR of 9.2% in the forecast period. And yet, there are staffing agencies for sale, which could indicate that some agencies are struggling in the market.
The current market may not feel as thriving as it once did a year ago . Yet, there are still opportunities abounding. Companies are still receiving new funding, expanding their workforce and appointing new leadership which all translates into new business potential for recruitment businesses. All this means that there is still room for success or more specifically, room enough for you to achieve it.
ABOUT THE WRITER:
With over a decade of experience in recruitment and sourcing, Jim Stroud has consulted for companies such as Microsoft, Google, Siemens, and a host of startup companies. During his tenure with Randstad Sourceright, he alleviated the sourcing and recruiting headaches of Randstad clients worldwide as its Global Head of Sourcing and Recruiting Strategy. Quite recently, he served as VP, Marketing for Proactive Talent – the most recognized and respected name in talent attraction, hiring, and retention. Presently, he publishes “The Recruiting Life”, a newsletter and comic strip about the world of work. Subscribe now.