In true August form, the hiring market slowed down, cooled off and took a much-needed break. Job gains slowed, with 315,000 being added by month's end, while the unemployment rate rose to 3.7 percent. It was enough for participants from the most recent Federal Reserve meeting to declare "tentative signs of a softening outlook for the labor market," citing increases in "weekly initial unemployment claims, reductions in quit rates and vacancies, slower growth in payrolls and reports of hiring cutbacks."

Still though, in such a diverse economy, broad strokes never tell the whole story. So let's break down where hiring activity is heating up, where it's cooling off, and what employers can do to find the right hiring and retention strategy to match.

certain labor markets stay strong

With busy season right around the corner, it's no surprise that the manufacturing labor market has remained strong. A monthly analysis of our own internal data revealed job orders in the sector increased 6.4 percent over last month. Applies were up 12.5 percent too and a jaw-dropping 122 percent overall compared to this same time last year.

It's this relative resilience, in fact, that may be helping to stave off a recession. According to Treasury Secretary Janet Yellen, “When you look at the economy, job creation is continuing, household finances remain strong, consumers are spending, and businesses are growing." Indeed, despite current economic uncertainty, the job market has successfully recovered 98 percent of all jobs lost during the pandemic, and unemployment has remained at historic lows throughout 2022 — characteristics, according to economists, not present in past recessions. This fact highlights the ongoing need for employers to focus on competitive compensation to attract and retain the talent they need. After all, the economy may be uncertain at the moment, but with consumer confidence high and workers showing that they’re more than willing to switch jobs for better pay and benefits, offering at- or above-market compensation may prove to be a price that’s well worth paying in the long run.

a flexible definition of flexibility

When we think about workplace flexibility, remote work and flex scheduling are the first thoughts that come to mind, depending on your industry — and for good reason. Forty-two percent of workers said they wouldn't accept a job offer if it didn't offer flexible work hours. But as more employers begin offering remote and hybrid working options to lure talent, focusing on location, another key component to flexibility, could give you an edge. It’s even possible that working in the metaverse may soon become a reality. How workers may feel about that option remains unclear, but it may prove wise to keep it on the table as the technology matures. 

For industries where remote work is feasible, consider widening your talent search outside your immediate geography. Seventy-one percent of workers said flexibility in terms of location — not just working hours — is important to them. Hiring remote talent can help you widen your talent pool, and make your company a more attractive digital destination for job seekers. Furthermore, this flexibility can be applied to your current workforce, too, as workers will have the freedom to relocate when needed while still keeping their jobs.

think differently about development

Despite signs of the hiring market slowing down, top talent remains hard to find, making upskilling, reskilling and overall career development that much more important.

No matter your industry, this concept applies. Whether it's a newfound willingness to engage with a career coach, or on-the-job skills training and development, employees have made their preferences clear. A full 88 percent of workers told us they would be interested in learning and development opportunities if their employers offered them. With this powerful retention benefit on the rise, how you deliver development will become just as important as delivering it itself.

Randstad, for example, has embraced the use of AI to develop customized career development tracks for employees. Tech-forward solutions like this can help streamline the process and identify learning opportunities that otherwise might have gone missed. Through the use of AI, employees receive a recommended series of development activities based on their tenure, background, role and personal goals. The introduction of new technologies into employee training and development is well underway and only expected to grow going forward.

the bottom line

Even though the pendulum may be swinging slightly back in employers' favor, job seeker selectivity is here to stay. Without an updated approach to hiring and retention, employers may soon find themselves out of the running for top talent. Fortunately, the strategies and best practices to deploy are clear. Providing location flexibility, when feasible, alongside schedule flexibility can help improve hiring outcomes, and taking a forward-thinking approach to career development and training can help plug skills gaps and increase retention.

For more on the latest strategies and actionable insights into hiring, training, retention and more, visit Randstad's Business Insights page.