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Laid-Off Workers Are in Demand Among Employers

THOMAS R. LECHLEITER/THE WALL STREET JOURNAL

Welcome back. This week's column is authored by Stephanie Forshee, a New York-based freelance writer.

(Correction: A previous version of this newsletter incorrectly said that Stephanie Forshee had been laid off.)

Stephanie Forshee

When used-car website Carvana Co. laid off 2,500 employees in May, the general manager of a New York car dealership turned to social media, soliciting those affected to apply for roles at his company. “Let’s turn this difficult time into a time of opportunity,” wrote Brian Benstock, general manager and vice president of Paragon Acura and Paragon Honda in Queens, N.Y., in a post on LinkedIn.

Since then, Mr. Benstock has extended at least one job offer to an ex-Carvana employee. He has heard from nearly 100 others, and roughly a third of them are worth vetting further, he said. Carvana’s layoffs offered Mr. Benstock a chance to find experienced workers for his own business plans, while providing a landing space for the displaced employees.

So far this year, there have been several rounds of mass layoffs, especially among technology companies. When Peloton Interactive Inc. in February parted ways with 2,800 workers, a former employee of the stationary bike maker created a spreadsheet to help displaced workers connect with new gigs—a system that has been replicated with other high-profile layoffs. Nearly 52,000 workers globally have been laid off among technology workers since the start of the year, according to tracking website Layoffs.fyi.

The layoffs come as employers still grapple with a historic number of job openings without enough workers to fill the roles. Some of the tens of thousands of laid-off tech workers at companies such as fintech company Klarna Bank AB, online retailer Stitch Fix and cryptocurrency-exchange operator Coinbase Global Inc. in recent months are targets of the recruiters’ outreach. While recruiting from a pool of laid-off workers is a tactic that more hiring managers are turning to, the execution must be handled skillfully, according to accounts from several recruiters.

Sara Du, co-founder and chief executive of integration and automation platform Alloy Automation, posted on LinkedIn about checkout payments startup Bolt Financial’s planned layoffs that affected technical workers, and invited them to consider her company in the future.

“We’re heading into tough times but we’re in this together, especially the DTC/ecomm SaaS community,” she wrote. 

Ms. Du said she had conversations with former Bolt and Klarna employees, hoping to add more people to Alloy’s hiring pipeline. She didn’t extend any offers of employment.

“As an employer, these layoffs are a really good opportunity to get chats in with people. But typically, we get to know people over the course of three to six months before hiring,” Ms. Du said. “It opens the door. Even if they join another company right now, that relationship has been established.”

Ms. Du said hundreds of companies had contacted some of the job candidates she spoke with about opportunities at Alloy, so it’s important to get them excited and up to speed on what your company does quickly. Alloy, for example, highlights its diversity and having a young female CEO and relies on brand recognition.

Mary Evans, human-resources director of marketing agency Marvel Marketers, has seen layoffs firsthand in previous roles during her 20 years as a HR professional—both as the employer and as a laid-off worker.

“The first thing that happens when you hear the word ‘layoff’ when you’re that person being affected is that you get this anxiety of ‘Oh my gosh, what am I going to do next?’” Ms. Evans said. That is part of why she decided, on behalf of her company, to reach out to candidates and let them know, “We’re really sorry for what you’re going through,” “be very empathetic” and also use that time to make them aware of opportunities available at Marvel Marketers.

The 100-employee global agency is fast-growing. Ms. Evans expects to onboard another 50 to 60 employees by the end of the year.

Ms. Evans has connected displaced workers with people in her network who might be a good fit. She said she and her talent acquisition manager are there to be a “sounding board and just advocate for them in their next journey and try to take some of that anxiety away from them.”

Continued Below: Jobs Report Spotlight; Five Signs Workers Still Have Power in This Job Market

 
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The Jobs Report Spotlight: U.S. Added 372,000 Jobs in June

A job fair in Florida last month. Average hourly earnings grew 5.1% in June from a year earlier. PHOTO: JOE RAEDLE/GETTY IMAGES

Employers continued to snap up workers in June—though at a slower pace than earlier in the year—in an economy that is otherwise cooling rapidly under the weight of high inflation and rising interest rates.

Here are some highlights from the latest U.S. Department of Labor report:

  • The U.S. economy added 372,000 jobs in June. Hiring gains last month held near the previous three months, when companies added an average of nearly 400,000 workers, but slipped from higher totals early in the year.
  • The unemployment rate last month, at 3.6%, was a touch above the half-century low reached before the pandemic hit in early 2020. The jobless rate has held at that level for four consecutive months, a sign worker shortages are easing slightly.
  • Average hourly earnings grew 5.1% in June from a year earlier, a step down from earlier levels.
  • Job growth continued, although fewer people were looking for work. The number of people in the labor force fell by 353,000 in June.
  • The labor-force participation rate—or the share of adults working or seeking a job—ticked down to 62.2% in June from 62.3% a month earlier. Participation dropped broadly last month, with declines among women, men, workers in their prime ages of 25 to 54 and baby boomers.

Access the full report.

11.3 Million

The number of jobs employers had open in May, according to the U.S. Bureau of Labor Statistics.

 
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Five Signs Workers Still Have Power in This Job Market

Economists predicting a downturn in the coming year don’t expect unemployment to rise significantly. PHOTO: ANGELA WEISS/AGENCE FRANCE-PRESSE/GETTY IMAGES

The demand for talent is strong and many employers are contending with significant staffing challenges. Economists predicting a downturn in the coming year don’t expect unemployment to rise significantly. Workers have the upper hand, according to these five data points from June.

  • About 10% of job ads mention remote work: Nearly half of 1,700 workers polled in June by the Society for Human Resource Management said they would seek a remote role for their next job. For workers looking to work remotely, 9.1%, of job postings on Indeed.com advertised remote work in June, the latest month available, compared with under 3% in 2019.
  • New job-posting growth has plateaued: Growth in the number of jobs advertised on platforms such as Indeed.com and LinkedIn is starting to drift down. But this is a plateau, not a plunge, according to Nick Bunker, an economist at Indeed. Job postings are 53.8% higher than they were in February 2020, during a strong labor market before the pandemic took hold.
  • Workers are quitting their jobs to change industries: Fewer workers are handing in resignations than in November 2021, when the percentage of people quitting jobs hit a record high. But employees continue to job-hop with vigor: 4.3 million workers quit their jobs in May.
  • Job cuts are low but show signs of rising: Job cuts remain relatively low, but concerns are growing. More than three-quarters of U.S. workers fear losing their jobs if there is a recession, according to a survey of more than 1,000 employees conducted in June by staffing firm Insight Global. The layoff rate as measured by federal data was 0.9% in May.
  • The number of open jobs exceeds the unemployed: There are currently 11.3 million open jobs in the U.S., according to federal data—almost two open jobs for every person who is unemployed and looking for work. Even as some sectors pull back on hiring, industries like leisure and hospitality are struggling to staff up.
 

Many Workers Are Enjoying a Summer of Pay Increases

PricewaterhouseCoopers raised pay 5% in January.

🎧 LISTEN: More employers are giving out companywide pay raises and issuing special bonuses to retain workers and help them deal with high inflation. WSJ workplace and management reporter Chip Cutter joins WSJ Money Briefing podcast host J.R. Whalen to discuss what this means for the balance of power between workers and their bosses. Listen here.

 

What Else We Are Reading

  • So, What’s a Good Raise Right Now? (WSJ)
     
  • Are Widespread Layoffs Coming? How the Pandemic Has Changed Employers’ Recession Strategy (Los Angeles Times)
     
  • Red States Are Winning the Post-Pandemic Economy (WSJ)
     
  • It’s Time to Streamline the Hiring Process (Harvard Business Review)
 

About Us

Chitra Vemuri curated and edited this newsletter.

✍️ Feedback on this newsletter? We would love to hear from you, so please get in touch. And be sure to visit us at The WORKPLACE REPORT

 
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