It’s April 2024, and I’m not gonna lie, the job market is pretty lousy. I’m in California, which is experiencing the slowest rate of job growth in 30 years. This is the first time since 1994 that California has ranked dead last in job growth across all 50 states. Just for reference, the unemployment rate for the whole U.S. is 3.9%. California’s unemployment in February was 5.3%, up from 4.5% in February 2023 (https://www.bls.gov/web/laus/laumstrk.htm). So, what happened?
I have several thoughts on why California’s job market is in the tank.
- 2023 kicked off with a banking crisis. Silicon Valley Bank and Signature Bank folded in the first quarter of the year, and First Republic Bank fell apart by the end of the year. Customers of these banks were sent scrambling to make sure they could cover payroll, pay their bills, and maintain the initiatives they were investing in. Confidence in spending plummeted, and many companies that had planned to hire put many of those positions on hold.
- Major tech company layoffs started in late 2022 and continued through 2023 (actually, they’re still a weekly occurrence in 2024). Not only did mega companies like Google, Apple, and Meta make the news with layoff announcements, but mid-size and emerging growth companies also saw reductions in force (RIF). Many companies attributed the layoffs to lower-than-expected earnings or “right-sizing” after a surge in hiring during the pandemic. However, their messaging often told a different story centered around realignment of strategic initiatives or a belief that layoffs would lead to more cohesive and collaborative teams. (https://californiaglobe.com/fr/bay-
area-tech-layoffs-continue-into-february-as-several-firms-let-hundreds-more-let-go/) - In January 2023, California, along with nine other states (Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island, and Washington) implemented new pay transparency laws that, depending on the state, required companies to disclose base salaries or total compensation on job postings, during or after a first interview, or upon request (https://www.govdocs.com/pay-transparency-laws/). In my interactions with hiring executives, I’ve learned that many companies decided to scale back on posting job openings out of concern that disclosing compensation would agitate current employees who might realize a new hire could be paid more than someone already on the company’s payroll.
- Job seekers have shown remarkable resilience despite the challenging job market conditions. We’ve seen a significant change in public job postings. In years past, we’d often see 50+% of all open jobs posted on company career pages and a variety of job sites. By late 2023, we saw that drop to somewhere in the 30-40% range. We’ve also heard from many sources that companies are posting positions that may not be real positions or are positions where the top candidate has already been identified. This is where we see the greatest frustrations for job seekers. At this point, job applicants know they need to tailor their resume for each job they apply to, so they spend copious hours customizing their resume for positions that may or may not be viable. I wish we had a solution for this, but it’s a hard situation to suss out. My recommendations are to A) verify the position is posted on the company’s website because it’s more likely to be a valid role if it’s posted there, and B) try to connect with someone in the company who can verify it’s a legitimate role.
- Companies are leveraging strategic networks, personal referrals and recommendations, LinkedIn searches, and direct recruiting to fill positions. Interestingly, the adage, “It’s not what you know, but who you know” is still the biggest driver to landing a new job. Statistically, 85% of jobs come from networking and referrals (https://www.linkedin.com/pulse/85-people-land-job-through-networking-strategies-tips-searching-/), and according to a study published by LinkedIn, over 70% of all jobs obtained from LinkedIn came from 2nd and 3rd -degree connections, aka “weak ties” (https://news.mit.edu/2022/weak-ties-linkedin-employment-0915). The message here is, to spend more time connecting and collaborating within your business networks, and leveraging sites like LinkedIn to be found by recruiters who are filling positions by searching for candidates rather than posting positions.
This leaves us with the burning question, “When will the job market turn around?” I wish I knew. I know companies are hiring. Every week, I coach dozens of clients on how to interview. We cover everything from interview questions they could be asked to interview questions they should be asking to how to properly research and prep for an interview. And I’ll coach them on how and when to discuss compensation and negotiate salary and benefits. So, I know companies are interviewing, and I know they’re hiring. I see it every week. But it’s not at the pace I’d like to see, and I think we’re probably looking at 2025 before we start to see a turnaround.
Julia Holian
Julia Holian is a Career Strategist and Gallup-Certified Strengths Coach. She helps experienced professionals pinpoint where they want to go in their career, then communicate and showcase their talents in order to move up in their chosen field or manage a job transition. Julia leverages her extensive leadership experience in executive management, professional development, interviewing strategies and recruiting to help her clients navigate the nuances of asking for new projects or a promotion, networking, interviewing, creating a job search plan, negotiating compensation, and successfully assimilating into a new role.