The Current Job Market Is Complicated. Here’s What Small-Business Leaders Need to Know

Despite the news this week that Amazon is laying off thousands of workers, the jobs picture remained stronger than expected in February–contributing mixed signals to the overall jobs picture.

U.S. employers added 311,000 jobs in February. Those gains spanned leisure and hospitality, healthcare, retail trade, and government, according to the latest Bureau of Labor Statistics’ jobs report. The unemployment rate, which ticked back up slightly in February from a decades-low point in January, remains notably low.

“The labor market is still being resilient,” says Rachel Sederberg, a senior economist at Lightcast, an information services company providing labor market analytics based in Boston and Moscow, Idaho.

The picture looks different across industries. Tech layoffs are continuing at big companies, while service-sector companies can’t hire fast enough–and women are starting to fill in the gaps. Here are three tips for small business leaders navigating the current hiring climate:

1. Recruit tech talent strategically.

For weeks, tech layoffs have come in waves at big companies like Google and Salesforce, and they aren’t slowing down. Amazon said in a memo this week it is planning to lay off another 9,000 employees in divisions like advertising operations and cloud computing, which are among its most profitable. On March 14, founder Mark Zuckerberg announced plans to lay off 10,000 employees at Meta, as he warned employees, in a memo, about “the possibility that this new economic reality will continue for many years.”

For employers, snapping up this tech talent remains tricky–but not impossible. Strategic recruiting may be key for companies hoping to scoop up top talent, which according to a recent survey from Gartner will remain heated until at least 2026. Marketing your company creatively and upskilling talent from other tech categories are just two ways to stay competitive despite the talent crunch.

2. Try to retain workers when possible.

The wage-price pressure remains elevated. While hourly earnings increased by just 0.2 percent, or 8 cents, in February, wages are still 4.6 percent higher than they were last year. “Wage pressure is still very much there…and that’s going to be a challenge for especially small business owners who are operating on a tighter budget,” Sederberg says.

In addition, quit rates continue to prove a challenge. The Job Openings and Labor Turnover report for February showed that quit rates haven’t budged much from January, now at 2.5 percent. Still, they remain historically high. Sederberg says job switchers are “still expecting a decent amount of money going into new jobs–maybe not the bonuses and the benefits that we were seeing six months ago, but there’s still pressure there.” The stakes are high, and once you shed workers you might have a tougher time getting them back. Recognizing employee power in the market remains crucial for naviagating the current job market and deciding what pay and benefits to offer.

3. Women are reentering the workforce. Adapt to them.

After leaving the workforce in droves during the pandemic, women are returning and filling jobs in areas like the service sector, where hiring has bounced back. The Wall Street Journal recently reported that hospitality and healthcare industries made up almost half of of the private sector worker gains in January. Now, women are helping to fuel this sector and could even help provide relief for worker shortages, the Journal reported, as they made up 38 percent of all private-sector job gains in the six months ending in January.

But keeping women in the workforce means cultivating a work environment that addresses the reasons many women left in the first place. Child care remains a barrier for many women, in particular, but higher pay, flexible and remote work, and other offerings could help bring them to open jobs. Evaluating your company’s current policies and strengthening those offerings could help your company reach this sidelined group of workers.


Leave a Comment