Could it be? After months of fervent job creation despite a dearth of job seekers to fill them, the labor market may be showing signs of rebalancing.

Is this the start of a larger trend, or simply an outlying month? We'll analyze the latest labor market indicators to see what's changed, where we might be headed and what employers can do to attract and retain talent throughout it all.

a welcome slowdown

The economy added 390,000 jobs in May, that's slightly down from April, but still a healthy rate all things considered. In fact, this slight pullback could be just what the overheated job market needs to recalibrate. With inflation at a 40-year high, and nearly two job opportunities for every unemployed person, reducing the supply of new jobs provides an opening for employers to catch up and address their long lists of vacancies.

In fact, that rebalancing may already be underway, or at least trending in the right direction. During the same time that job gains were slowing, the labor force participation rate increased to 62.3 percent. That translates to an additional 330,000 people either working or actively looking for work.

Wages, for their part, continue to rise, albeit at a slightly slower pace. Still, we've noticed several industries that have seen higher-than-average wage growth compared to their 2019, pre-pandemic levels:

  • health services (+22.8%)
  • security/commodity brokers (+32.5%)
  • wholesale trade (+29.2%)
  • transportation and warehousing (+28.7%)
  • health services (+22.8%)
  • business services (+16.5%)

reexamining the great resignation

We can blame a lot of things on COVID-19, but it turns out, the Great Resignation may no longer be one of them.

In May, our own internal models revealed that the amount of workers quitting their jobs had been actually trending upward since all the way back in 2010. Month over month, year over year, that number increased uninterruptedly until it paused momentarily as a result of the outlying events of March 2020. While it's true the employee quits rate didn't reach its historic high until last year, the trend itself had been entrenched long before lockdowns.

Since then, the quits rate has remained high, with flashes of slowing appearing intermittently. However, employers aren't out of the woods yet. Seventy-three percent of respondents said they're considering quitting their jobs in 2022, and many who did still haven't returned. This is particularly true among women, who experienced disproportionate job losses as a result of the pandemic, and have still yet to recoup 1.4 million of the jobs they lost. Employers, then, must remain vigilant to ensure they're providing the right pay, perks and benefits to bring workers back and prevent additional resignations.

3 employee preferences to address

So which areas should employers prioritize? Our 2022 Workmonitor report revealed three key themes today's employees want to see reflected in their workplaces:

1. purpose

Forty-three percent of American workers overall wouldn’t accept a job with a business that doesn’t align with their values on social issues. This belief is held so strongly in fact, that 41 percent even said they wouldn’t mind earning less money if they felt that their job was positively contributing to society.

2. belonging

A workplace culture where everyone feels like they belong and are valued is increasingly important. Forty-one percent of U.S. workers told us they would not accept a job if the organization wasn’t making a proactive effort to improve diversity and equity in the workplace.

3. flexibility

People want to have flexibility around where and when they work. In particular, 83 percent of all respondents would like flexible working hours, and almost three-quarters think that flexibility in terms of location is important. This preference is expressed most explicitly by younger generations of workers, with 56 percent of those under the age of 24 saying they wouldn’t accept a job if they thought it would negatively affect their work-life balance.

the bottom line

For once this month, employers can take a bit of a breath. Job creation is slowing while workforce participation is speeding up. This could be the start of a long-overdue rebalancing on the job market, however we'll need more time to determine whether this is truly a major momentum shift or a mere blip on the radar.

For now, the fact remains that there are still almost double the amount of opportunities than there are job seekers, so it's important for employers to maintain their commitments to preventing turnover and attracting talent. Focus on cultivating purposeful, inclusive and flexible working environments for employees and job seekers to stay competitive for talent as we head into summer.

Looking for more hiring and retention insights to win the war for talent? Head on over to Randstad's Business Insights page to stay up to date with the latest.