Not since the Great Depression has the U.S. witnessed unemployment rates as high as those seen over the last 12 months. The COVID-19 pandemic disrupted almost every industry during this period, triggering vast layoffs and an avalanche of corporate downsizings.
The Congressional Research Service recently reported that in April 2020, during the peak of the first wave of the pandemic, the unemployment rate was as high as 14.8%. A year on, in April 2021, it was at 6.1% – still significantly higher than pre-pandemic levels.
In the last few months, however, the labor market has benefited from a strong period of recovery, following the large-scale rollout of vaccines, better health conditions for workers, and a renewed sense of economic optimism (the projected GDP for this year stands at 6.4%).
As a result, there has been a dramatic resurgence in the number of jobs in the market. The U.S. Bureau of Labor Statistics reported that the number of job openings reached 8.1 million at the end of March 2021, in comparison to 5.8 million in March 2020. This increase was driven by industries as varied as accommodation and food services, education, as well as arts, entertainment, and recreation industries.
However, the climb back up for employers will be far from easy. Businesses looking to rehire their workforces are realizing that finding the right people is proving to be a formidable challenge.
Where have all the unemployed workers gone?
Soon after the first wave of the pandemic, the U.S. government rolled out stimulus packages in response to the rising unemployment. These included one-time stimulus payments up to $1,400 per dependent, $3,600 for each child under age 6, $3,000 for children aged 6 or older, as well as additional federal and state unemployment benefits. Put together, the relief programs were so attractive that in some cases, low-wage workers ended up making more money not working than they did while being employed at their old jobs.
Consequently, many job seekers have been hesitant to get back to work. We’re now looking at a rather ironic situation in which we have jobs opening up like never before, but few takers for them.
Case in point: a McDonald’s franchise in Florida ended up offering people $50 just to turn up for a job interview, and it still could not attract many applicants!
At Joveo, we dug into the data we’ve amassed by powering millions of job ads across hundreds of job categories and found evidence of reduced interest among job seekers in the U.S.
Over the past six months, we’ve observed that the average number of clicks per job has reduced by a whopping 40%. We saw a similar trend being reported by other programmatic recruitment advertising providers as well. Unemployed workers just aren’t clicking on or applying for jobs as much as they used to.
We’ve also observed that the rising demand for jobs coupled with dwindling interest from job seekers has created a congested market in which employers are spending and bidding aggressively on job ads like never before to attract high-quality candidates from within a shrinking talent pool.
Let’s consider, for example, hiring in the gig industry, which has seen a huge upsurge since the pandemic began. We recently analyzed the performance of job ads for delivery drivers – a major job category in the gig industry.
Our data reveals that the average CPC in April was at its highest since before the pandemic, and 136% higher compared to October 2020, i.e. employers now need to bid very aggressively for applicants due to increased demand.
On the other hand, click-to-apply (CTA) rates have been steadily declining and are presently at their lowest level – 25% lower than in October 2020 – indicating fewer job seekers are applying for jobs even after clicking on job ads.
As a consequence of this double whammy, employers looking to hire delivery drivers are finding it harder and more expensive than ever to acquire applicants. The average CPA in April 2021 was 214% higher than in October 2020.
So what should employers do?
Gone are the days when recruitment advertisers could do their jobs with not much to guide them apart from a healthy dose of gut instinct. The ground realities of yesterday have now evolved. It’s time for us to evolve too, to look at our data a little more closely. While the key success metrics for our industry haven’t really changed, the market forces impacting their performance definitely have. The game is still the same, but the playing field has transformed.
For truly effective recruitment advertising in this new era, a performance-based, outcome-driven approach is essential.
Programmatic job advertising can get you there by enabling you to leverage the power of data to not just set the right goals, but also manage and optimize your campaigns based on market insights and your desired outcomes on an ongoing basis. The technology automatically feeds its learnings into your media sourcing strategy and uses them to inform subsequent media buying and management decisions that yield the best outcomes based on changing market dynamics.
As an employer, relying on just a handful of reputed or well-known online talent sources will expose you to uncertainty in the volume and quality of traffic you receive for your jobs. Instead, programmatic technology provides instant access to dozens of high-performance sources for your jobs along with the flexibility you need to redirect your spends when the need arises.
For example, if there’s a sudden dip in traffic with a few job sites, for certain roles, or in a few locations, the technology recognizes such events and refocuses your media budget at sources, roles, and locations that attract more and better quality traffic.
It also enables you to track your candidates right across the recruitment marketing funnel, so you can measure your campaign performance on the only outcome you truly care about – hires.
The “new normal,” triggered by COVID-19, has made it apparent that the dynamics of candidate demand and supply will not always behave the way you expect it to. Are you equipped with what you need to deal with it?