Wondering how to navigate the hiring landscape over the coming months? Factor in tight labour markets, no matter where you are in the world. Demographic trends around the globe, such as aging populations, low birth rates and limited immigration, add up to a labour shortage that affects employers everywhere.
On top of that, regional factors are creating unique hiring challenges in different countries. Understanding the differences between labour markets, and how to navigate them, is critical to developing the right hiring strategies for the year ahead.
Indeed Hiring Lab, Indeed’s economic research arm, studies trends in the global labour market by analyzing millions of data points across Indeed’s site, including job postings, resumes and user behaviour. Hiring Lab economists based in key job markets around the world publish analyses and reports on global labour market conditions, including hiring and salary trends, in-demand skills and popular employer benefits.
We tapped six Hiring Lab economists to break down what’s happening in their region and what it means for employers.
In the UK: inclusive hiring is essential
Jack Kennedy is an economist at Indeed Hiring Lab who focuses on the U.K./Ireland labour market. Kennedy has worked in the financial services industry on macroeconomic analysis and labour market developments.
The situation: one of the key factors behind labour shortages in the U.K. has been the withdrawal of older workers. Early retirements have certainly been a factor, due in part to the pandemic, as well as pension reforms that made it easier for people to draw down pensions earlier. At the same time, there are substantial pressures on the National Health Service, with record-breaking waiting lists for surgeries and treatments. In many cases, this affects people with chronic conditions from being able to work. So we’ve had more people exiting the workforce and fewer people able to rejoin. There’s also the impact of Brexit, which ended the free movement of workers. That’s been hurting lower-paid sectors the most, the same sectors that have been seeing very rapid job vacancy growth in the post-pandemic rebound.
The takeaway: it’s particularly important now to be diverse and inclusive in hiring policies. There’s a lot more that employers can do to review their culture and eliminate bias in their hiring practices, such as addressing wording in job descriptions that can potentially have ageist connotations.
In the US: the labour market remains resilient
Nick Bunker is the economic research director for North America at Indeed Hiring Lab and focuses on the U.S. labour market.
The situation: concerns about an economic downturn are abundant these days, despite a still-low unemployment rate and robust job growth. The most recent data shows the market cooling, with job openings declining and wage growth slowing. A wave of layoffs in the tech and media sectors is a symptom of tight times for those industries. We’re also starting to see the percentage of job postings that advertise benefits like health insurance and retirement plans level off after a post-pandemic increase.
The takeaway: while the labour market is cooling, it’s important to remember that the market was unusually hot as we began to emerge from the pandemic. The market now remains resilient. Wage growth is high by historical standards, and there is still an elevated demand for workers. And although layoffs have had a big impact in some sectors, layoffs overall are down, with monthly rates around 16% below the pre-pandemic average. Rather than fearing these changes, employers should see this as a smooth transition to a more normal state for the labour market that looks, for now, to be largely sustainable and healthy.
In Germany: women are a valuable source of untapped talent
Annina Hering is an economist at Indeed Hiring Lab with a focus on the German labour market. Previously, she worked as a postdoctoral researcher at the Max Planck Institute for the Study of Societies.
The situation: we have huge demand for labour in Germany, and part of the issue is that we definitely do not have enough immigration. There are a lot of restrictions on immigration in Germany, and the language barrier is a big challenge, so it’s less attractive than other countries. Employers also have to be very creative in finding potential new sources of labour, and one underutilized labour pool is women: Female labour force participation in Germany has grown, but it’s still lower than that of men. For the most part, women in Germany work part time, often in retail. The main reason is a shortage of high-quality childcare, which makes it difficult for mothers to return to work, and there are limited opportunities for women to develop a career through part-time work.
The takeaway: employers should consider offering more part-time jobs, more flexible hours or the ability to work from home to attract more women. Some companies are also offering perks like subsidized childcare, free bikes for transit and discounts on products.
In France: savvy recruiters focus on skills over schools
Alexandre Judes is an economist at Indeed Hiring Lab with a focus on France. He has worked on policy issues including French competitiveness, labour market reform and European integration.
The situation: the current unemployment rate in France is 7.2%, much higher than in the U.S. the U.K. and Germany, and the labour market here is rigid. Hiring mistakes can be costly due to high labour costs and intricate employment laws. Nearly 90% of the salaried workforce is hired on unlimited term contracts. After a probation period of two to eight months, it’s difficult to fire those employees, layoffs must be comprehensively justified. And unemployment benefits are substantial, amounting to more than half of pre-tax salaries for 18 to 27 months. As a result, French recruiters tend to be very conservative, prioritizing the kinds of degrees candidates have and the universities they attended, making it difficult for job seekers to change industries. However, the tight labour market is pushing recruiters to broaden their search criteria and look beyond where they would normally look to make hires.
The takeaway: the main recommendation we give employers is to test people on the job. Use the probation period if necessary, and do not hesitate to consider candidates from diverse industries, or those who have faced barriers to employment. Most of the time, these hires are just as successful as their counterparts.
In Canada: Competitive Compensation is Key
Brendon Bernard is an economist at Indeed Hiring Lab, focusing on the Canadian labour market. His research interests include analyzing how detailed trends in the job market fit in with broader developments in the Canadian economy.
The situation: in Canada, 2021 was a boom year for hiring, with substantial increases in job postings across regions and different areas of the economy. With this surge in hiring, we saw Canadians move away from lower-paying areas of the employment market and take a step up the job ladder, especially people who might have been underemployed or who hadn’t had their skills fully utilized before the pandemic. But, unlike in the U.S., there wasn’t a wave of quitting and job hopping, the so-called “Great Resignation”, and Canadians didn’t see the same quick pick-up in wage growth. Now, however, wages are increasing at a solid pace, in the range of 5% year-over-year during the past six months or so, and pay is probably the most important factor for attracting new hires.
The takeaway: along with competitive compensation, training and opportunities for advancement are also key for job seekers. In addition, employers should think about investing in upskilling and expanding candidate searches by considering job seekers with less experience than they would have previously required.
In Japan: better wages and benefits will set employers apart
Yusuke Aoki is an economist at Indeed Hiring Lab with a focus on the Japanese labour market. Aoki has provided economic consulting to the government, judicial bodies and private sectors.
The situation: Japan is experiencing different hiring trends than the U.S. and Europe. In human resources, marketing and legal professions, we’re seeing a downward hiring trend; but in mechanical engineering and software engineering, the job market is tight. We’re not seeing hiring freezes and layoffs in tech, in part because of structural differences in the workforce. Although most employees in Japan are full time, a larger portion of the workforce is employed through outsourcing and freelancing than in other countries, particularly for software engineering jobs. Across industries, layoffs are unusual here, because the work culture in Japan emphasizes long-term, or even lifetime, employment. However, this restricts wage growth because companies are more apt to avoid layoffs and retain employees than raise pay. As a result, the hot topic in Japan now is wages. With nominal wage growth at 1.1% and inflation at about 3.3%, the Japanese government has intervened and asked companies to raise pay. Some large companies can raise wages above inflation this year, but small and medium companies find increasing wages difficult because they’re not able to pass on the additional expense to customers.
The takeaway: if employers are unable to raise wages, they should focus on creating a better working environment. For example, our data shows that employers are becoming more likely to mention parental leave in job postings*. Other benefits like hiring bonuses and no overtime will also make a post more attractive.
The top takeaway: think globally, act locally
These viewpoints from around the world leave no question that employers will need to continually evolve hiring strategies to succeed in a persistently tough labour market. But the economists agree that knowledge is power: understand the factors that underlie hiring challenges, at home and around the world, and you’ll uncover important insights into how you can attract talent no matter what obstacles arise.
*Article in japanese
