Why are Job Openings Increasing, but Hiring Decreasing?

By Zac Shaw

The first half of 2023 has certainly been an interesting one when it comes to looking for a new job.  We’ve all heard about the numerous layoffs across many industries. Looking at that alone may cause you to think that there just aren’t many available jobs right now. However, according to the U.S. Bureau of Labor Statistics, there were 10.1 million job openings at the end of April 2023, up 358,000 from the end of March. At the same time, new hires fell by 37,000 over the same timeframe. Those are some odd statistics! 

At ALTA, we have noticed some strange things within the market as well. Hiring seems to have slowed, but job openings for great IT people are still very high. In talking with these professionals who would seem to have plenty of opportunities, they are also noticing several issues in securing their next job. To do a little digging as to why, we decided to ask our LinkedIn followers what they believe the biggest issue to be. We provided four options that our team thought was most likely to cause people to have trouble securing their next opportunity. Here’s what we learned.

Slow Hiring Process – 44%

44% of our poll participants believe that an exceptionally slow hiring process is the largest factor contributing to them not securing their next job. We’ve also seen this happening with some of our clients. The jobs are open, candidates are screened and submitted, but then nothing happens for days.  In 2021 and 2022, this was incredibly rare because talent was so hard to come by. With all the news about layoffs, some employers likely believe that talent is now easy to come by, or they are concerned with the uncertainty in the economy. Either way, there is no doubt that the hiring process seems to be dragging on right now.

Increased Competition – 24%

The second highest vote-getter was Increased Competition at 24%. I think there are a couple of factors that have led to this challenge.  The first is directly tied to a slow hiring process. If jobs are not moving forward to hire in a timely manner, then candidates are applying to many jobs as they await feedback and an offer. Companies then have an increased number of resumes to review for their job postings, leading to a slowdown in hiring.  A second reason is the fact that layoffs are real.  When they happen, competition increases. An additional possibility (which also leads to our third challenge) is remote work. If candidates aren’t restricted by location, then they can apply for roles across the country.

Location Flexibility – 18%

In our poll, 18% of responders said that Location Flexibility was the biggest challenge in finding a new job. Let’s face it, many of us became accustomed to remote work when COVID hit in March 2020. Since then, a lot of workers decided that commuting to the office daily was not going to work for them any longer. It seems that nearly one in five of our voters are just looking for remote or hybrid work.  Companies may be reluctant to do this for any number of reasons (i.e., existing office space, management ease, team building, work visibility, etc.). The jobs that do offer remote work are then inundated with applicants, leading to increased competition as well.

Compensation – 14%

Interestingly, Compensation was only the biggest issue in finding a new job for 14% of our responders.  Pay rates, especially within IT, are still high. Even with the challenges that candidates are experiencing, companies are still paying well for good technical professionals. So, what might make someone say that compensation is the biggest issue? Over the last three years, we’ve seen some organizations completely open their checkbooks for certain skillsets. Exceptional people, who knew how to negotiate, were being paid a premium. While IT pros are still paid well, companies are more likely to negotiate a fair rate rather than pay any amount asked for.

Conclusion

We’ve highlighted four of the challenges in finding a new job in the current market. While there are certainly others, I like to look at the positive side as well. Ultimately, job openings are increasing, and, at some point, organizations will need to start filling them. ALTA has many great clients in both the Government and Commercial sectors. Check out our jobs at ALTA careers.