Employers are being ‘a little bit slow to kick off holiday hiring,’ economist says

ZipRecruiter Chief Economist Julia Pollak joins Yahoo Finance Live to discuss holiday hiring trends, the state of the labor market, the most in-demand jobs, and the outlook for the U.S. labor force.

Video Transcript

- Amazon, Walmart, and Target have already released their holiday hiring plans. But the news may point to signs of weakness in the labor market. Julia Pollak, ZipRecruiter chief economist, joins me now as part of our Career Control series sponsored by Straight Talk Wireless. Julia, good to have you back on the show. So as we look at some of the trends that we've been seeing-- so as we look at some of the trends that we've been seeing in hiring leading up to the holidays, what does that tell us, though, as we take a look back, as we take a step back and look at the overall market right now?

JULIA POLLAK: This is about the toughest environment that employers can be in for holiday hiring. So on the one hand, you have a situation where employers really don't want to be caught flat footed. They don't want to risk under hiring when there's going to be a surge of demand. But they also are very concerned about the future outlook and the possibility of a downturn. And so they don't want to over hire. And so they've been a bit cautious and a little bit slow to kick off holiday hiring.

- And even as we look at the market, a solid, but supply constrained labor market is how ZipRecruiter described it. Jobless claims rising 9,000 to 228,000. What is your reaction to this job claims data and what this means for where we really are in the labor market?

JULIA POLLAK: So layoffs and firings remain very, very low. And that jobless claims number is incredibly low by historical standards. So there aren't yet too many layoffs taking place. In the most recent jobs report, we saw that job gains remain incredibly broad based. Over the past 12 months, they've been sort of broader than ever before.

And yet, there are some industries that are disproportionately affected by rising interest rates, by high inflation, by a strong dollar. And we are seeing some pain there. So, for example, consumers are getting a little bit more wary about big-ticket purchases. They can't dip into their house and use it as a piggy bank quite as easily anymore. And so car dealerships have shed jobs in the last month. And so have building supply stores. It's not so easy to pay for your renovation by refinancing your house.

- And, obviously, as we talk a lot about things like hiring freezes, job losses, we are seeing it in some sectors more than others as we talk about the tech sector off and on here. But we're also seeing a lot more strategic hiring. So what are some of the more in-demand positions and some of the really prime candidates that some of these companies are targeting right now?

JULIA POLLAK: So this has been a very exciting time where because of the labor market is so supply constrained, companies have had to streamline and centralize their hiring processes and revamp them quite dramatically. So companies are doing things like speeding up the time to hire. They're also increasingly posting jobs remotely and advertising them in multiple environments so that they can increase diversity and speed. Those are the two things that many companies are going for now.

They're learning to hire for skills, not degrees and experience, and to try to figure out who is going to be a good fit even if they don't fit the traditional mold. And they're having some success. These experiments are paying off. And I think we're going to see innovations in hiring that improve the candidate experience and employee experience for generations to come.

- So talk about some of those innovations because, on the one hand, you have quiet quitting. You have a lot of people who could be last in, first out when they look at who perhaps could be most at risk. When you look at who's most at risk and where you see the future of work heading with innovation, what is that telling you?

JULIA POLLAK: So this is a labor market where there is still an increase in remote work in parts of the economy where there's tremendous potential. That increase has huge implications for the geography of work in America. We're seeing people increasingly open to moving in our monthly ZipRecruiter job seeker surveys. They are also being pushed by inflation in rent prices to consider opportunities more broadly across the country.

Employers are also looking at candidates and increasingly hiring regardless of location. So that's one exciting move, where people are sort of moving around for opportunity. And then we're also seeing an increase in the extent to which employers are having to behave in their HR departments like sales teams and like advertising and marketing teams. They are being more proactive. They are finding candidates, passive talent often, people before they even apply and actively reaching out to them.

In our most recent survey, 37% of Americans hired in the last six months said that they had been reached out to. They had been recruited by someone at the company. So the job found them. They didn't have to find it.

- Now, I also want to get your reaction. Obviously, the Labor Department proposing this shift in gig workers being classified potentially as employees. And you also have boomers being sort of left out of this resurgence of people coming back into the workforce and how that could impact the economy. How do you see some of these potential changes impacting what we see in the labor force, say, in the next year or so?

JULIA POLLAK: So gig work we see in all the research that has been done is very valuable for workers because of its flexibility. And converting those jobs into permanent payroll positions, while it would improve benefits and have many benefits, would also reduce that flexibility. And so there are trade offs. And I think those will become sort of abundantly clear as we go down that path.

When it comes to labor force participation, prime-age workers, even women, encouragingly, have mostly recovered, almost fully recovered. We've seen younger workers actually see a boost in their employment opportunities. And we've seen participation rise among teenagers and among workers with disabilities. So some people have been given better opportunities before because employers are expanding their recruiting efforts and because jobs have become more inclusive with the rise of remote work.

That said, older workers have left this economy in much larger numbers than in any prior recession. They were displaced in enormous numbers. They face the largest barriers to returning. And it seems as though they are no longer coming back in large numbers. So they will leave a permanent gap and make this labor market sort of permanently supply constrained unless we find other sources of labor, perhaps by raising immigration caps or by improving our education and training programs.

- A lot of demographic shifts to keep an eye on there. Thank you for breaking that down for us, Julia Pollock. Have a good afternoon.

JULIA POLLAK: Thank you very much.