ADP’s job numbers for August are out, and—spoiler alert—they ain’t that rosy. We’re talking 177,000 new jobs, which is a miss if you’re looking at the 195,000 folks were expecting and significantly lower than July’s upwardly revised figure of 371,000.
The slowdown is primarily attributed to a drop in leisure and hospitality hiring, with particular geographical shifts in job gains and losses. Additionally, pay growth for both job stayers and changers has slowed down. According to ADP Chief Economist Nella Richardson, the market is now moving towards more sustainable growth. That’s corporate talk for “don’t expect fireworks.”
This report holds specific implications for HRTech vendors and those involved in B2B marketing and sales.
The Slow Dance of Job Growth
So, job growth is slowing down. For you HRTech vendors out there, it’s a mixed bag.
Forget Your Hiring Spree Tools: A competitive job market generally requires fewer recruitment and onboarding tools, as companies aren’t rapidly expanding their workforces.
Increased Need for Employee Retention Solutions: Slower growth means companies want to cling onto the talent they’ve got. So, if you’re selling stuff that makes employees feel all warm and fuzzy inside, you’re on the right track.
Leisure and hospitality took a nosedive. What’s that mean?
The sharp decline in hiring in the leisure and hospitality sector could signify a shift in industry demands.
Diversify or Die: HRTech vendors specializing in hospitality recruitment might need to diversify their service offerings or target other sectors that are growing.
New Skills, Who Dis?: Vendors offering training solutions could seize this as an opportunity to re-skill workers for growing sectors, like technology and healthcare.
Look at the map and you’ll see jobs vanishing from the Northeast and a subsequent increase in hiring in the South.
Localized Marketing Strategies: HRTech vendors may need to adapt their marketing and sales strategies to be more localized, reflecting regional job market demands.
Remote Work Technologies: With this migratory job pattern, demand may rise for solutions that facilitate remote work, enabling companies to tap into talent regardless of location. Anything that helps folks work from anywhere is the cat’s pajamas. Don’t sleep on it.
Slowing Pay Growth
Wage growth is chilling out, so companies are gonna lean into perks over paychecks.
Benefit Administration Solutions: Vendors offering benefit management and flexible compensation options (that don’t cost an arm and a leg) could find a more receptive market.
Data Nerds Unite: It’s analytics time, baby. Wage & compensation analytics tools could become more critical as companies look for data-driven approaches to employee retention without significantly raising pay.
JOLTS data also showed a decline in the ratio of job openings per unemployed person, and the rate of quits eased. This situation could encourage:
Sophisticated Matching Algorithms: With fewer job openings per unemployed person, the role of sophisticated applicant tracking systems (ATS) and matching algorithms becomes crucial. Time to push those fancy algorithms that pair companies and candidates like a reality show romance.
Internal Mobility Solutions: Since folks aren’t hopping jobs, solutions facilitating internal mobility can become more important. Make the case for tech that helps them move up the ladder without jumping ship.
The key takeaway for HRTech vendors and B2B marketers is adaptability. As the job market trends toward stabilization and slower growth, the demand will also shift from rapid recruitment to employee retention, skill development, and more localized solutions. Understanding these trends and aligning offerings accordingly will be critical for succeeding in this changing landscape.
The ball’s in your court, HRTech peeps.
Roll with it.