311K jobs added, exceeding predictions, with tech being a major contributor at 45k job additions.
Another 311k jobs were added and unemployment edged up to 3.6% in February's Bureau of Labor Statistics Jobs Report. Professional and Business services, the sector that includes professional, scientific and tech services, added 45k jobs and was a top contributor to overall gains. It's another big month for job gains exceeding the expectations of analysts. The entire jobs report is confirming the Federal Reserve's concern that the red-hot labor market will continue to stoke inflation pressures.
Key Tech Jobs Report Insights
Jobs Added: +19,500 in Professional, Technical and Scientific Services
Unemployment Rate: 2.8% which is up from 2.2% in January
YOY Gains: +458k which averages ~+38k per month
What's Next for Hiring?
Regarding the rise in unemployment, many analysts are citing the recent tech industry (mainly non tech worker) layoffs as the contributor. So, what does this mean for hiring? The talent pool has grown, more workers are now available. With the recent layoffs, we saw an uptick in high-skilled labor hitting the market. This coupled with the increased fears of a "looming" recession means there is now an eased pressure on wages, which explains the slow-down in wage increase last month. Basically, more talent + more people fearing the recession is coming = less importance is being placed on salary/pay by job seekers. Great news for those looking to fill crucial positions in their workforce.
Despite downward pressure, we still saw a .7% increase in real wages, which is a slower increase compared to previous months. This actually bodes well for wages in general when looking at inflation. For hiring managers, this current ease in wage pressure signals that now is a great time to expedite hiring processes.
Bold Tech Hiring Predictions from Our Experts
As we finish out Q1 and head into Q2, we're taking a look at what could be next for tech hiring. Our team weighed in with their bold predictions for tech hiring:
- With the market becoming more job driven, we'll see the normalization of rates and potentially, on-site working. Essentially, organizations will have more power to demand hybrid work models.
- We expect our customers to start selecting candidates based on maximizing ROI. Candidates with more than one skill normally do well in this type of market, such as software developers who can also test, analyze or deploy etc. vs just writing Java or Kotlin etc.
- We will be seeing a market correction in wages (rates and salary), and while this will take time for the workforce to adjust to, it's a necessity. Wage increases are already starting their slow down, so we'll be keeping a close eye on this in coming months.
- Organizations and hiring managers will shift their labor strategies to focus on investment in the absolute requirements and scale back on the nice to haves.
- Big hiring sectors will include CRM/DevOps/Mobile, where we’ll see a decrease in investment in Marketing Technologies and AI.
As always, we're keeping an eye on the labor market and are here to offer insights that make hiring and job searching easier. Connect with us today if you'd like to see how we can help you expand your tech workforce or level-up your tech career.