We’re talking about wages again, with things looking better for the economy. The number of vacant job openings fell by 496,000 in May, the Labor Department said, suggesting a cooling of demand for workers. But the same report showed that the number of workers voluntarily quitting their jobs rose by 250,000 — a sign that they still feel empowered. Meanwhile, the number of people hired was up (by 107,000), and the number laid off down slightly (35,000).
The unemployment rate dropped to 3.6% in June. Four million people quit their jobs in May, down from the “Great Resignation” peak but still historically high. The monthly number of layoffs and discharges, at 1.6 million in May, remains low.
CompTIA analysis of that data shows Tech sector companies increased headcount by 5,348 jobs last month, and the unemployment rate for tech occupations edged up to 2.3%,
Also, Thursday morning, payroll processor ADP said the private sector added a stunning 497,000 jobs in June.
A disproportionate percentage of the tech workers laid off since last fall appear to be women. From October 2022 to June 2023, women made up 45% of laid-off tech employees, according to an analysis of 3,404 workers by Layoffs.fyi. About 55% of laid-off workers were male, the research shows. But most industry statistics put the share of male employees in tech at a much higher level, said Roger Lee, the founder of Layoffs.fyi. One reason – many layoffs weren’t tech but HR, recruiting, and marketing.
I want to highlight something I spotted in an Atlantic piece. Let’s quote this paragraph:
The most recent economic data make clear that the unemployment rate was significantly undercounting the pool of available workers. Even as the official number remains pinned to historic lows, 4 million workers have jobs over the past year. The labor market was in better shape than many experts thought. Inflation and wage growth have both been slowing down. This did not require a multiyear span of high unemployment, as Summers suggested; to the contrary, the economy keeps adding jobs.
And I also want to draw on some analysis from the New York Times related to the ending of the Great Resignation.
The great resignation was often portrayed as a phenomenon of people quitting work altogether, but the data tells a different story. Most of them quit to take other, typically better-paying jobs — or, like Ms. Moya, to start businesses. And while turnover increased in virtually all industries, it was concentrated in low-wage services, where workers have generally had little leverage.
Why do we care?
For IT Services companies, it’s a tale of two situations.
Internally, IT companies should be aware that the market remains very tight. Technical resources are scarce and in demand, and “big tech layoffs” mostly mean non-technical resources. You’re in luck if you need HR, recruiting, and marketing, yet otherwise should not consider a shift. You also have an opportunity to recruit with a broader lens.
Yet for customers, it’s industry powered. You’ll want to do your own analysis for your customers and understand their needs, but expect that, in most cases, outsourced or consultative help will be welcome in a tighter labor market. That could be because of wage pressure in lower-paying roles where automation is welcome or in higher-paying roles where people are scarce.
And do not be dismissive of the new business surge that was created. Those are potential customers.
The good news is that it’s good news – let’s brush aside any economic hangover, as the US market appears pretty healthy.