Down, but not out

Sure, hiring has slowed down. But many companies are still staffing up.

In late July, Gartner asked more than 270 HR executives about their recent hiring practices and outlook. And although 1 in 3 said their organizations had slowed hiring in response to a volatile economy, 47% said they’d seen higher hiring volume in the last month than in the previous three.

“If the labor market is usually going at 50 mph, we’d sped up to 100 mph — and now we’re maybe back to, like, 90 mph,” said Brian Kropp, distinguished VP of research at Gartner. “The labor market is not contracting as much as we would have expected.”

Despite all the layoffs and hiring freezes in the news, many HR execs expect hiring to continue to be challenging.

• Half of respondents told Gartner that they expect the market for talent to get more competitive in the next six months, up from 41% who said the same in June.
• Even though hiring is slowing down at many companies, most don’t think it’s going to get any easier to lure candidates. Fewer than 1 in 4 execs said they’re expecting the labor market to get less competitive in the next six months.
• “That’s the disconnect that’s happening, and the thing that people aren't quite getting about what’s going on in the labor market,” Kropp said.

Why aren’t employees staying? HR execs said they were hard-pressed to meet worker expectations for career progression (65.1%), pay (32.5%) or flexibility (30.8%).

• Employees are picking up big raises by job-hopping, Kropp said.
• Even with inflation in mind, 69% of HR leaders said they’re still only reviewing salaries once a year, while 14% said they plan to look at pay twice a year. 12% said they planned to review salaries on an ad hoc basis.
• “Employees who stay in their job, because of inflation, are taking a real wage cut,” Kropp said.

Of course, hiring volume and outlook varied among different sectors. Companies sensitive to interest rates, crypto-related companies and companies that bet their business models on a fully remote future — the Pelotons of the world — are having to slow down the most, Kropp said.

“That belief that they had that we’re going to 100% remote is just not playing out,” Kropp said. “There’s still a huge desire for people to be in the office, at least some of the time.”