ZipRecruiter Co-Founder and CEO Ian Siegel breaks down the state of the U.S. labor market amid wide-scale tech layoffs, trends in job openings, the value of remote work options in the current workforce, and new pay transparency laws.
DAVE BRIGGS: Big tech saw record setting growth during the pandemic, but now the industry is experiencing a major turn. Meta, Twitter, Lyft, Redfin, Stripe, Zillow just a few of the tech companies to announce layoffs recently. So far in 2022, workers in the industry have gone from holding the power to hoping they can hold on to their jobs.
Ian Siegel, ZipRecruiter's co-founder and CEO, here with us with more on that. Good to see you, sir. Do you expect that this is just the beginning? Is the Fed going to get their way? Are mass layoffs going to continue?
IAN SIEGEL: Well, the Fed's been hard at work trying to drive up unemployment. And it looks like they're having some success. So for the second quarter in a row, we've seen employer demand ease off. That means there's fewer open jobs, more competition for those jobs that are open, and employers' quality standards have started to move up.
This is a rebalancing of the labor market, so you're going to see job seekers take longer to find new jobs, have a harder time finding work. And it'll be really interesting to see where many of those changes that we saw during the post-COVID period, particularly around themes like remote work or hybrid work, what's going to happen over the next 12 months.
RACHELLE AKUFFO: And Ian, I know that the tech company layoffs tend to get most of the headlines, but what are we seeing across all sectors?
IAN SIEGEL: Yeah, I mean, I think that there was definitely a surge in demand from employers who effectively didn't just reopen, but had to staff back up in a post-COVID reopening of the economy. So you look at things like restaurants and hotels that were hiring in the six figures every quarter for the last several quarters. And then suddenly, they're down to only around 30,000 new jobs last month. And that tells us that we've effectively come to the end of the staffing backup.
And then you look at the overarching macroeconomic themes, which is, there's a lot of indicators that we're heading into a recession. And certainly, a lot of businesses are preparing as though that is going to be the reality. So you're seeing layoffs. You're seeing hiring freezes. You're seeing a lot of companies slow down the pace of their hiring. So even for their open jobs, they're being more deliberate and more selective about the candidates that they are choosing to bring on board.
So I think in general, what you're seeing is a cooling off. Now, let's just be clear. You're still at under 4% unemployment. You still have a record number of jobs that are open relative to a pre-COVID period. So we haven't fully seen the labor market cool off yet. We're just in the process of sort of a gradual rundown right now.
JARED BLIKRE: Ian are we getting some inklings of where we might see unemployment shoot up-- not necessarily shoot up, but at least move first? And I'm talking about demographically based on gender. Any trends you're seeing, even geographically within the US?
IAN SIEGEL: Well, right now, it tends to be really category specific. And some of the companies making headlines in the tech sector are sort of the tip of the spear as to what we're seeing, where you saw this abundance of money infused into the system. And one of the truths of that was the biggest winners in that period looks like companies in the financial services industries.
So whether you were helping people buy homes and facilitate home loans, or whether you were a tech company that was selling advertising at a period of time where so many people were effectively locked into their homes, and spending so much time on their computers, you found yourself with a surplus of staff. Well, now, it turns out it's time to pay the piper, and a lot of those industries are the first to suffer. And those are the ones where we're seeing the early layoffs and the hiring freezes.
DAVE BRIGGS: Those who are looking for jobs, what is the most important factor for them right now?
IAN SIEGEL: I mean, it's really interesting because as I think we talked about last time, there was this grand social experiment during COVID, where everybody effectively went remote. And still, to this day, over 60% of job seekers in survey after survey say they prefer either fully remote work or hybrid work.
On ZipRecruiter today, if you post a job and say you're willing to let that job be done remotely, you get 2.7 times more interest than you do if you say that's going to be an in-office job. So when we look at trends like that, it's a very interesting question as to whether or not remote is going to be here to stay or not in 2023. Many companies are trying to compel their staff to come back.
Job seekers are so far voting with their attention that they put on job ads and their applications, but it will remain to be seen how long they can hold out because certainly, they're burning through savings. And the urgency that they feel to find new work is increasing.
RACHELLE AKUFFO: And Ian, in terms of what else might make a job attractive, we know New York City recently joined Colorado, Washington State, and Rhode Island in having some form of pay transparency. Obviously, some people pulling jobs. Some making these crazy, wide sort of ranges. How much does that change the hiring picture?
IAN SIEGEL: The number one piece of advice that we give to employers of all sizes is to include salary information in your job listing. Why? Because jobs that list salary literally get twice as many applicants as jobs that have chosen to obscure salary. So while it does feel like something that's being done to them, in many cases, pay transparency is actually something being done for the employers.
It also gives us really good data so that you're able to benchmark yourself against your competition, both in terms of your pay rates and also the response to your ads. I mean, I think a big part of the reason why ZipRecruiter has been so successful in this quarter was because in spite of the fact that the labor market was cooling, for both sides of our marketplace, whether you're employers or whether you're a job seeker, we are showing information that traditionally was not available to you.
So you're able to say, for example, as a job seeker, I know how much I'm worth. I know how much competition I face. I know how many employers are hiring. And that context, that ability to see the forest, instead of just the trees, has led to real success in driving both engagement with our job seekers, as well as long-term relationships. And that's why we were able to beat, I think, on both the bottom line in the top line last quarter, and raise guidance for the next quarter.
JARED BLIKRE: Always a pleasure talking to you, and thank you for your insights. Ian Siegel, ZipRecruiter co-founder and CEO.