US employers added approximately 390,000 jobs in May – the slowest month in the post-pandemic recovery era. The slowdown in hiring comes amid fears of a larger economic downturn. With inflation at its highest level in 40 years, the ongoing war in Ukraine, and global supply chain disruptions, the labor market may end its recent run sooner than expected.
Even the tech sector, which boomed during the pandemic, is showing signs of contraction. Based on recent media reports, Facebook parent company Meta has paused hiring and is scaling down recruitment plans. Similarly, in a recent earnings call, Amazon’s CFO stated that its warehouses are overstaffed, following a large hiring spree during the lockdown.
And they are not alone:
- Retail brokerage Robinhood recently reduced 9% of its headcount to rationalize overlapping job functions after a hiring spree.
- Peloton also said that it would reduce its corporate workforce by about 20% as a part of cost restructuring.
- Start-up crypto exchange app Coinbase recently announced a round of layoffs amounting to 18% of its staff.
These reports contrast with the larger labor market, where candidates wield significant influence and employers contend with increasing wages amid inflation and a wave of resignations. In April for instance, job growth in leisure and hospitality increased by 78,000, signaling demand in certain industries.
While some of this post-pandemic volatility could be attributed to macroeconomic trends, many economists believe that the tight labor market may be here for a while, thanks to an aging US population and other factors.
Data-driven talent sourcing amid inflation and volatility
In today’s business world, many leaders have never dealt with persistent inflation. This presents a unique opportunity for human resources (HR) and talent acquisition (TA) leaders to transform their planning and decision-making activities.
During times of economic boom, HR, like other business units, is liberal with spending. This may take the guise of massive outsourcing followed by overstaffing. During a downturn, HR (among other functions) is viewed as a cost center, and is often pushed to justify spends.
Workforce and people analytics solutions do a great job of providing this data. They help answer important questions: What roles are high-priority for the business? What does the attrition rate look like? How productive are our employees? However, when it comes to talent acquisition, businesses need a forward-looking strategy to address costs and optimize spend.
Here’s where a programmatic solution makes sense.
Since the last recession, there’s been a fundamental shift in the way employers view talent marketplaces. Traditionally, most job boards offered pay-per-post services, which are difficult to assess. When Indeed broke into the market with a pay-for-performance model, it became much simpler for talent teams to measure the performance of their hiring strategy.
Today, programmatic solutions make it even easier for TA teams to identify and measure the efficiency of sources, optimize spend, and ultimately hire better. An intelligent programmatic solution can help talent leaders cut out the noise and zero in on those which are relevant for the role, job-fit, and budget.
How programmatic helps recruiters become more data driven
- Allocate spend: A programmatic solution helps TA teams allocate their budget to the most efficient sources, attracting qualified talent. For example, when recruiters set out to post jobs themselves, they risk wasting resources on job boards that do not reach the right candidates or may charge for every advertised post. A programmatic platform leverages large networks of publishers and job boards that are likely to have more relevant candidates. Solutions offer a pay-for-performance model that helps you make the most of your advertising budget.
- Improve recruiter productivity: Manual time and effort spent on sourcing candidates is a huge drain on business resources. With a programmatic solution that automates sourcing, recruiters can spend more time on improving the hiring process and solving bottlenecks. For instance, data from their programmatic solution (like click-through rates) can help recruiters identify reasons for candidate drop-off when overlapped with ATS data.
- Choose the right metrics: With more accurate data coming in, recruiters can, for example, calculate recruiting yield ratios to understand how many applicants come through the system and result in hires. This also provides a strong foundation to begin linking hiring metrics to broader business outcomes – which is crucial during times of economic volatility. Key metrics to consider include:
- Quality of hire
- Cost per hire
- Time to hire
- Source of hire
- Candidate experience scores
- Offer acceptance rate
With organizations facing challenges on multiple fronts, talent leaders can play a decisive role in addressing these challenges, including how they affect an organization’s broader strategy. If the finance team, for instance, forecasts that a price increase in services could ultimately erode profit margins by 10%, should recruiting investments be reduced by a similar amount? Or should a different lever or combination of levers be pulled?
Making these strategic decisions requires talent leaders and their teams lean on their data in order to adapt to volatile economic swings, while maintaining the organization’s overall strategy.
Joveo’s source-agnostic approach helps employers get the most out of their advertising spend using a data-driven approach. We’d love to demo our programmatic solution for you. And follow us on Twitter and LinkedIn, where we’re always working to help you get the most out of your recruitment advertising.