Despite glowing reports of low unemployment rates, many job seekers struggle to find roles. The disconnect raises a critical question.
Why are so many people struggling to find work in what appears to be a robust job market?
This article reviews the complexities of the employment scene in America and uncovers the hidden challenges plaguing job seekers and employers.
Frustrated job seekers and employers
According to reports from the U.S. Bureau of Labor Statistics, the job market appears to be thriving. There are 8.1 million jobs for the taking, and the unemployment rate is hovering around 3.9%. The statistics paint a picture of a growing employment sector with plenty of available opportunities.
However, American workers beg to differ.
In a recent survey, two-thirds of job seekers said it was more challenging to land a job now than it was for their last job.
Within the last four months, many of them have flocked to Reddit to validate their observations against what they’re being told in reports. One Redditor reported submitting at least 100 applications and going through a few interviews only to be ghosted or rejected. Another Reddit user was recently laid off and struggles to gain traction with potential employment.
Uncertainty in the job market right now
While the numbers suggest a flourishing job economy, several underlying factors are combining to create this more complex reality. This results in a scenario where finding a suitable role is just as challenging as hiring the right candidate.
So why do job seekers report such a painful lack of opportunity?
Growth miscalculation
American companies experienced rapidly increasing demand during and after the pandemic, and they projected that the growth would continue. To keep up with demand, employers hired aggressively to expand their organizations.
However, the projections fell short, and businesses found themselves with excess workers they no longer needed or couldn’t afford to keep on board. The overhiring led to layoffs and hiring freezes that we still see today, exacerbating job insecurity and cultivating a more competitive job market.
Economic uncertainty
Inflation, geopolitical tensions, and shifts in consumer behavior are making 90% of American executives financially cautious. They’re delaying expansion plans, reducing headcount, and reevaluating their hiring needs.
Unfortunately, this cautiousness translates to fewer job opportunities and a more stringent hiring process to ensure they have the right person.
Focusing on intentional hiring
For most employers, the days of hiring in bulk simply to meet demand are gone. Now that the dust has settled after the pandemic and the Great Reshuffle, companies are becoming more deliberate in their hiring, focusing on the specific skills their organization needs through skills-based hiring. Indeed, last year, 73% of employers used skills-based hiring, up from 56% in 2022.
This approach can potentially limit the number of opportunities for job seekers whose skill sets may not align, as it also encourages companies to prioritize internal candidates first.
Shrinking labor force: The employer perspective
As Newton’s law stipulates: There’s an equal or opposite reaction for every action. In this case, job seekers struggling to find work complicates hiring for employers.
Rather than endlessly applying for jobs without success, approximately 44 million Americans have quit their jobs since 2023, with 26% planning not to return to the workforce. Younger workers aged 25-34 are choosing to invest in their personal growth over the frustration of finding a job right now.
On the other hand, 17% of Americans chose to retire, and 19% transitioned into homemaker roles. America’s labor force is dwindling each year, creating talent shortages in multiple industries, with IT and technology having the highest talent shortages (78%).
The manufacturing industry projects that 2.1 million jobs will go unfilled by 2030. Even sectors like banking and hospitality are experiencing significant labor shortages.
Companies struggling to hire are looking for a viable solution.
Going global solves talent pool limitations
To navigate the perplexing labor market, American employers may find that the solution to the talent crunch lies just beyond their borders. There is a wealth of qualified talent in other countries with the skills and expertise they need.
By expanding their recruitment internationally, companies can tap into diverse talent pools. They’ll not only address the talent shortage, but they’ll also add fresh perspectives and a variety of thought processes to their organizations.
However, the difficulty of keeping up with compliance, paying employees in their currency, and the overall cost of global hiring have historically made this option only available to the largest companies.
An Employer of Record (EOR) software like Multiplier simplifies global hiring by handling compliance, payroll, onboarding, and many other core HR functions. Gain access to potential employees with the qualities and skills organizations need to thrive.
Don’t restrict yourself to a limited source of premium talent. Discover how Multiplier can streamline your global hiring process and connect you with top international talent.
