February Market Update
As we transitioned into this year, we had some uncertainty about the activity level we’d see in January. Fortunately, we were pleasantly surprised by the busy pace, with a noticeable uptick in companies actively hiring and candidates displaying a greater openness to exploring new opportunities.
Most of our business increase has been in mid-level support roles with our enterprise clients and project support with our construction and development clients. Remote or hybrid work is still the preferred work arrangement for candidates. However, we are seeing more candidates open to 100% in-office roles.
Our conversations with clients and our observations of today’s job market have brought a few key topics to the forefront, from nationwide economic trends to updates in local regulations. Here’s what we’re noticing:
Stabilization and Confidence Improve Outlook
Today’s economic benchmarks reflect a movement towards more normalcy and stability, rather than unpredictability and fluctuations. The January jobs report from the Bureau of Labor Statistics reported 353,000 new non-farm payroll jobs added, with particular growth seen in professional and business services, health care, retail trade, and social assistance sectors. The unemployment rate remained at 3.7% — the first time since the 1960s that the rate has been below 4% for two years straight.
This growth, combined with cooling inflation, has produced another positive result: growth in consumer confidence. In January, the Conference Board Consumer Confidence Index hit its highest level since December 2021. Although respondents still report some level of concern about rising prices, they also rated their income and personal finance outlook favorably over the next six months, and the perceived likelihood of a recession continued to ease as well.
A sense of stability and confidence is good news for businesses and individuals alike. We’ll likely still see some level of competition for hiring top talent (though not at the extreme levels seen in the recent past), and increased consumer confidence opens more doors for growing sales and profits. A middle-of-the-road approach, and a less stressful one for everyone involved, seems the smartest bet as 2024 kicks into gear.
Updated Cannabis Regulations Impact Washington Hiring
Beginning in January 2024, employers in Washington state must comply with an updated version of the state’s laws surrounding cannabis use and employment. The law now states that “It is unlawful for an employer to discriminate against a person in the initial hiring for employment if the discrimination is based upon the person’s use of cannabis off the job and away from the workplace; or an employer-required drug screening test that has found the person to have non-psychoactive cannabis metabolites in their biological specimens.
This means that an applicant’s personal (past or current) use of cannabis cannot be a reason for employers to reject their application. It does not, however, prevent employers from rejecting candidates based on other types of drug tests, from maintaining a drug-free workplace, or from screening employees after an accident or suspicion of being under the influence at work. Certain types of jobs are exempted from this law, including those requiring a federal background check or security clearance, those in first-responder, corrections, or aerospace roles, those under federal contracts that require cannabis testing, and those in pre-identified safety-sensitive roles.
Employers will need to update their hiring guidelines, including clear identification of roles that still require cannabis testing, in order to comply with the new law and ensure everyone is on the same page from the start.
Record Number of Part-Time Employees
USA Today reports that, in December 2023, an all-time high of 22 million Americans (or 13.9% of workers) were working part-time. This includes workers who are working part-time for companies, as well as those who are gig workers, contractors, or business owners. While the holiday season always sees a spike in part-time work as companies hire more to handle holiday rushes, this sharp increase is more than just seasonal.
The reasons for this boom in part-time employment are varied. Some workers are dealing with cut hours or only able to find part-time work as companies look to trim costs and the job market gets more competitive for candidates again; others are teenagers or retirees looking for extra cash; still others are former full-time employees trying to recover from burnout. Also in this group are stay-at-home parents (especially mothers) who were able to work part-time from home while navigating COVID-caused childcare shortages.
For now, at least, part-time work seems to be a win-win for many employers and employees: it’s a flexible “perk” that allows employers to continue accessing talent and allows employees to maintain some balance in their lives. It’s worth keeping an eye on how part-time work may help organizations meet their changing labor needs as the year progresses.
The Outlook This Month
Stability and moderation are the name of the game right now. The job market hasn’t cooled as much as expected, but it’s not experiencing runaway competition, either. Likewise, consumer spending and confidence are steadily gaining ground, which in turn can lead to a more promising outlook for profits. As a result, more companies have the breathing room to evaluate their talent strategy, determine where their focus needs to be to meet key goals and chart a cautiously optimistic course for the next few months.