Q2. 2024!

Q1 has been quite a ride for those of us in the staffing industry. Let’s just say OUR marketplace has had its share of volatility, dealing with some workforce trends that for many of us were a bit unexpected. As example, at PACE we have been thinking for a while now that our clients would start using more temporary staff. Our reasoning was that as the economy became more dicey, less predictable, employers would turn to more flexible staffing strategies to hedge their bets. And temporary staffing, which reflects a decision to hire on a temporary rather than permanent basis, is the kingpin of flexible staffing strategies.

What we predicted is that employers, instead of staffing a new role with a direct hire, would start thinking in terms of longer term “temps” – people to help the get work done NOW while avoiding the need to make a long term commitment and/or running the risk of having to lay off down the road.

We were pretty sure that even though some pundits were predicting a better 2024, the wakes of UNCERTAINTY would continue to be with us 2024. Its an election year. We’re dealing with a growing number of foreign wars that could easily escalate. And those nasty inflationary pressures are still at our heels – in fact getting worse, not better. All reasons we felt employers would elect to go the flexible rather than fixed route.

But once again, our assumptions about what our small to mid sized customers would likely do got trumped by what they actually decided to do.

In fact, the temporary staffing industry as a whole showed noticeable declines in the number clients choosing to use temporary staffing solutions. In fact, as an industry, temporary staffing posted another 6% decline in staffing revenues in Q1 adding fuel to the decline in the demand for temporary staff that reached its peak in 2022 and has been declining since.

At PACE, our clients have not been an exception and up until just recently have shown a preference to add to their permanent staff rather than opting for a “temp.” We keep wondering when that will change – but hey we’re here to help our clients get what they need, not to tell them what they need.

A quick snapshot of JOB MARKET FACTS – Q1. 2024.

A note worthy headline in our local job market is that Washington State continues to perform noticeably below what is being reported at national levels.

That was true for most of 2023, and repeated itself in Q1 of 2024.

In Q1, the revised employment and job numbers indicate that Washington added only 6,500 jobs during the quarter, well below most quarters in 2023. Even the DoL was willing to headline this quarter’s report with – “our local employment market is softening”. While the national numbers showed slower rates of job growth throughout 2023 (compared to 2022) at the national level Q1 job growth was robust – hitting a high for the last 3 quarters.

Unfortunately that rebound didn’t happen in Washington where we posted a 2 quarter LOW.  (Keep in mind that we’ve seen significant revisions in the monthly job growth numbers, particularly at the federal level…so the jury is still out on what might come in as revised numbers for Q1)).

Washington’s unemployment rate reflect the same local and national trends. Our Washington state unemployment rate increased to 4.8% at the end of March compared to the national unemployment rate of 3.8%. The Seattle/Bellevue/Everett came in lower at 4.1% but still below national levels. A year ago this time, our statewide unemployment rate was 4.5%, but dipped into the mid 3%’s during the summer. Hopefully that may happen again.

Year over year the industries reporting the largest local job gains were in two groups – 1) Government and 2) Education and Health Services, mimicking what is going on nationally. The big job losses fell to the Information, Construction and Retail sectors in that order. There is no question that our job losses in technology are significantly impacting our overall job and employment data.

Getting Ready to Take a Closer Look at the Growth in Fulltime / Part-time Jobs….

The national jobs report is 35 pages and includes a huge assortment of tables and graphs – kind of hodge podge of everything you would want to know about the job market and/or to make the case for your particular point of view on jobs. Our challenge is that making sense of all the data included in this report is a full time job so we tend to read summaries provided by independent analysts – folks who are paid to search this report for micro trends.

One such micro trend that seems to be getting a lot of attention lately is the small print data (at the bottom of table A-9 to be exact) which shows the change in employment broken down into part-time and full-time workers. This is a breakdown that has been tracked and reported since 1968 when part-time jobs made up only 13.5% of total jobs. Historically that number peaked to 20.1% in January 2010, just after the “Great Recession” and today stands at 17.7% .

On the pejorative side of the full time part time job analysis it can be pointed out that only 82.3% of all the new jobs being reported by the government are actually full time – defined as someone working 35 or more hours per week. Is that a good thing or a bad thing? We’re not sure but we think it needs to be data that we look at more carefully if we are trying to predict what is going on in the economy – really.

Putting a more “curious” spin on this data it might be signaling a workforce trend that should get a second look. If more people are willing to work in part-time roles – that may not be good for the economy but it might be an opportunity to meet some of the unique needs of small to mid-sized employers who love access to expertise, but can’t always afford its costs if having to appear in an employee hired full time.

We’ll be doing some more research on this topic – the pluses and minuses of a part-time employee – and put our findings into a blog format at some point in the near future. Stay tuned.

What should our readers do with all these facts?

What is striking to me is how important it is to not just read the reported headlines if you really want to know what’s happening in either the national or local employment market. People like to talk about “robust job growth” but if what they’re describing is an increase in a lifestyle choice that is driving part-time roles rather than career and economy driving fulltime roles, we might want to take a second look. And for our local job market, what we hear in the national news doesn’t really seem to apply to what’s going on in Washington state.

What are local business owners, hiring managers, and staffing executives talking about going into Q2?

The Economy and Wage Inflation

While we started this year with some increased optimism that 2024 just might be just a bit better than 2023, some of that optimism in Washington state seems to be fading – particularly for our clients who come from the small to mid sized sector of the local economy. The culprit isn’t coming from weaknesses in revenues – there seems to be ongoing opportunities to do business – but rather from the increases in costs so many employers are dealing with just to keep pace (no pun intended). A BIG component of these cost increases comes from increased staffing costs driven by increases in minimum wage and other trickle down factors.

As we started the year, employers quickly faced the realities of minimum wage increases. In Washington State, minimum wage became $16.28, an increase of $.54 per hour or 3.4%. (And this increase came on the back of an 8.7% increase in 2023.) In Seattle, the minimum wage jumped to $19.97.  In Tukwila $20.29. You might be interested to know that 3 Washington cities have the highest minimum wage in the nation – Seattle, Tukwila, SeaTac.

And these minimum wage increases had a trickle down effect on the number of employees who we could exempt from overtime pay requirements. In 2024, for employees who otherwise met the exempt requirement, the minimum wage an employee had to earn to avoid overtime requirements became is $67,725 a year – a $10,000+/year increase over the exempt threshold in 2023. Needless to say there is a significant increase in the number of Washington state employees now eligible for overtime pay – all adding to inflationary employer costs.

In their 2024 survey of nation wide executives, Chief Executive reported that 59% of CEOS believed that inflation was their biggest challenge. In Washington state, mandatory wage inflation has clearly exacerbated that issue. The average rate of pay for an employee in Washington state is $1325/week, historically high enough to put us in the top five states in the nation. While in 2023 we saw our local employers responding to wage pressures with most willing to find ways to increase pay or run the risk of losing valued employees, we’re noticing less of an appetite for pay increases in 2024. We’ll report this data as it comes in.

Hiring and Retention – Employers Seem to be Coming to Terms with Employee Shortages and Skill Gaps

Meanwhile the need for the right talent continues to be a front and center concern for most Washington businesses – across all company sizes. The data shows that quits finally  started to subside in mid/late 2023, but both hiring and retention has continued to be a top issue for company owners.

When it comes to hiring, it almost seems silly to report that the demand for skilled employees is still very strong. You know that. The truth is that most employers aren’t really feeling the pinch of no candidates, but it’s the gap between the skills and work experiences employers say they want compared to the skills and work experiences most job candidates have to offer that has created the rub.

The good news is that in 2023 we saw employers adjusting their hiring and staffing strategies as a way to mitigate the impact of these gaps. 

At PACE, for example, we upgraded our candidate vetting processes to introduce what we call a RESULTS FOCUSED HIRING model which puts emphasis on what a candidate can actually bring to the table rather than giving much attention to how those skills were acquired. It’s a very “talent” focused model for hiring which for us resulted in the “years of experience” and “educational” requirements getting reduced in favor of “can this employee deliver what we need them to deliver” – an important nuance of the hiring equation.

Bottom line, our RESULTS FOCUSED hiring model made sure non conventional candidates who acquired the right skills and experiences outside traditional work or educational venues were not overlooked.  To date, this model has proven to be very successful, helping our clients focus more on the RESULTS they need a new hire to achieve, asking candidates to describe how they would go about achieving those results as a part of the interviewing process, and selecting candidates based on the talents they were able to showcase thru a results focused vetting process.

As for retention, we see employers paying close attention to retaining the top talent they’ve recruited and hired in at least one important dimension tightly linked to retention. Many of the “back into the office” initiatives that companies launched in early 2023 have either been stalled or turned into hybrid models that puts a lot more focus on growing the work from home options than originally anticipated. We’re still wanting our clients to know that the candidates we work with ‘STRONGLY PREFER” with as many work from home options as an employer can muster and still meet their own needs.

We see employers coming to grip with the fact these hybrid and remote work arrangements have had and will continue to have a big impact on the all important “employee experience.”

  • Employees are wondering how remote work will impact their careers and not all employers have answers to those questions, preferring to “wait and see”. The good news is that we see most employers not yet ready to implement a one size fits all solution.
  • Employers are still playing with new ways to manage individuals and teams with concerns about productivity still front and center. While there are still many who say “it can’t be done’. We still find that “most” believe the jury is still out.
  • Because the employee experience starts from the moment they apply for a job and lasts to the day they leave, we are seeing many employers adjusting their recruiting and hiring processes. Old formats no longer work. At PACE, we spent a lot of 2023 examining just about everything we do.
  • Even though employees are no longer tethered to an office, the employee experience still includes a lot of factors. The company’s culture, how quickly and efficiently they have access to company tools and resources, and the quality of the relationships that get built between the employee and their fellow team members. A lot of those things are still being re-engineered.
  • Work life balance issues may be fading away – BUT are likely to be replaced by new issues that get generated when work and personal lives get intertwined as they are in remote working arrangements.

Technology Change – We’re Just Getting Started! 

No question, at the beginning of 2024 it became apparent that many occupations would experience a lot of change ,driven by AI based technologies that came to be on center stage in the latter part of 2023.  In our own environment we continue to be amazed at how AI can take hundreds of resumes, read and interpret them, and then match them up with open job orders – cutting out all that tedious work that once took hours conducting queries and sorting outcomes.

And so it is for so many occupations – teachers, marketing strategists and copy writers, accountants, machine operators, more – all are experiencing the changes in their work content driven by AI. Companies of all sizes, but particularly the smaller, mid-sized companies, are dealing with the reality that to retain their current place in their respective markets, they are going to have to come up with a compelling plan as to how to use AI today – a potential reshuffle of their organizational structures – who does what and how.

We can’t totally see how all this is going to play out but we see most of our clients poking around with AI capabilities NOW.    Change is on its way.

The one thing we do know is that most companies are focused right now on applying AI to their core business. This means that at least for the near future, companies are going to need specialized outside vendors more than ever to keep up with changes that are taking place within their non core functions. They simply cannot keep up with both. Technology always has the ability to make things easier – but only for the people who have the specialized expertise it takes to put the new technologies to work in the right way. The bar has just been raised as to how companies elect to get work done and we are expecting a shift to more outsourcing of non-core functions- relying on vendors who are applying the new technologies to their businesses, as opposed to having to develop these non core technologies internally.


PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire quality employees who are the “right fit” for their roles, for close to 5 decades.  

A 5-time winner of the coveted “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction.

PACE services include temporary and contract staffing, temp to hire auditionsdirect hire professional recruiting servicesEmployer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte.

If you’re a hiring manager looking for a service that will actually “make a difference” to who and how you hire, contact us at 425-637-3312 or fill out this form and we’ll be in touch!


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