Needless to say 2024 has been quite a ride for those of us in the jobs business. For sure OUR marketplace has had its share of volatility, going thru some ups and downs that many of us were not expecting. At PACE we were “sorta” aware that what was being reported as job growth in the national press was likely an over statement compared to what we were experiencing locally, but recent reports showing the US economy was actually down over a million new jobs that we once thought we had, are more in line with what we were experiencing here. That’s a big number to wrap your arms around but might explain why we simply weren’t “feeling it” locally.

Local employment numbers, by the way, are much less subject to over statements due to inaccurate estimates and assumptions that impact the national data. Locally we have been reporting significant slow downs in new jobs created for the last six months.

At PACE, we watch staffing trends closely. Although our services are designed to add value in all economies we still like to know what’s trending – how employers are dealing with change. We have been thinking for a while now (actually since early 2023) that our clients would start to shift their focus away from hiring direct and start to use more flexible staffing models to hedge their bets against a more serious recessionary cycle. Traditional temporary staffing has always been the kingpin of flexible staffing strategies, so we predicted our clients response to uncertainty would drive an increase in temporary staffing – maybe even longer term “temps” who could get work done NOW while avoiding the need for an employer to make a long-term staffing commitment.

We were also pretty sure that even though pundits were predicting an improved economy in 2024, the wake of UNCERTAINTY would not go away. 2024 is an election year, with a growing number of foreign wars that could easily escalate and nasty inflationary pressures that impact small and mid sized employers, still at our heels. Call us out of touch but we believed that going into 2024, employers would elect to go the flexible rather than fixed staffing costs route.   

But that was not to be. To date, which is now the middle of August 2024, the temporary staffing industry as a whole, has not been able to shake off the downticks they experienced in 2023. In fact, the temporary staffing industry posted another 6% decline in staffing revenues in the first quarter of 2024, adding fuel to the decline in the demand for interim staff that reached its peak in 2022 and has been declining since. 

At PACE our clients have definitely 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.          

But enough about us – as we get ready to play out Q3, wanted to quickly share a snapshot of the current job market – both nationally and locally.  Also want to share some of the topics we hear our clients talking about now that will likely have an impact on what will happen the rest of the year in the local staffing marketplace.   

A quick snapshot of JOB MARKET FACTS – 2024.

As we learned earlier this month some of the national data we had been counting on to tell us about the national job market has in fact been over stating job growth by approximately 816,000 jobs. This number falls on the heels of monthly restates we had already factored into our own data – so that all said and done the number of new jobs being reported has been over reported by 1.1 million jobs. 

This is the largest “adjusting data event” since 2009 – and THAT’S A BIG DEAL in terms of what we have been “experiencing” in the job market that was very different than what we heard being reported. We now know why.

Washington State Employment Data…

… on the other hand, is much more reliable and we have been noting that the job market in Washington State had continued to report higher rates of unemployment, and lower rates of new job creation than was being reported at the national level. We now know why that was the case…but compared to other states our unemployment rates have escalated to higher than most.       

Going into August and looking only at the YTD data from July 2023 to July 2024, seasonally adjusted employment in Washington stayed relatively the same…actually decreasing by 100 jobs. If we take away the seasonal adjustment, we added 62,500 jobs for that same 12-month period but only 39,700 of those jobs came from the private sector. Government has been hiring!  

As for unemployment rates…

…Washington’s seasonally adjusted unemployment rate for July 2024 was 4.9%, a slight uptick from June’s 4.8% rate but up considerably from the 3.6% rate posted in July 2023. Washington is now tagged as one of a few states showing the largest drops in rates of unemployment and is now in the top 5 states with the highest rates of unemployment.        

At the end of Q1, the WS our DoL headlined their quarterly report with – “our local employment market is softening”. We’ve been living that trend!   

A Closer Look at Full-time/ Part-time Jobs….

Each quarter we get a national jobs report that is somewhere between 30 and 40 pages and a hodge podge of tables and graphs. Making sense of all the data included in each 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 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 in employment type that has been tracked and reported since 1968 when part-time jobs made up only 13.5% of total jobs. 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 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. 

Putting a more positive spin on this data it suggests it might be revealing a workforce trend that needs a second look. More and people are apparently willing to work in part-time roles and while that may not be good for the economy it might be an opportunity that fits the needs of small to mid-sized employers. We’ll be doing some more research on this topic – the pluses and minuses of a part-time employee – put our findings into a blog. Stay tuned. 

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

The Election!

No question the biggest news that we see clearly impacting our local job market is the national election, with the President, the representatives going to the House and the Senate all up for grabs. Washington state may be one of the state’s least impacted by which party is in charge as we are clearly a blue state with blue policies well entrenched in our socio-economic system. That said the wonderment is focused on the future and which policies are most likely to bring inflation to an end by putting a hold on government spending. It is not our role to comment further…but we know this election is likely to set a new tone around spending and business regulatory policy in Washington DC that can’t help but trickle down to us here in Washington.

Minimum Wage!   

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, a 3.4% increase. 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 trickledown 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 nationwide executives, Chief Executive magazine 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 our average pay per worker is 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 keep reporting on pay data as it comes in. Check out the What’s Happening blogs on the home page of our website!

Employers Coming to Terms with Employee Shortages and Skill Gaps  

Meanwhile the need for the right talent continues to be a core issue for many Washington businesses – particularly in the small to mid-sized employer sector. While the unheard of levels of employee turnover started to subside in mid/late 2023, we see employers paying more attention to getting the right people in the right seats on their bus and then holding on to them once there.  

When it comes to hiring, the demand for talented employees has not subsided. We aren’t finding employers being pinched with no candidates, but it’s the gap between the skills and work experiences employers say they need compared to the skills and work experiences most job candidates have to offer that creates the rub.  If you’ve noticed how much time it takes to sift thru the stacks of wannabes in search of the candidates with the right set of talents you’re not alone!

As for retaining high talent employees, with layoffs in the news and business ebbing, employees are less likely to change jobs than they have in the past. That said, many of the “back into the office” initiatives launched in early 2023 have had to be turned into hybrid models than most companies wanted. We’re still reminding our clients that if they require an employee to work 100% in office, they are shrinking their candidate pools by at least 30% if not more.   

Technology Change – It’s just getting started!

As we began 2024 it became apparent that many occupations would experience a lot of change, driven by AI based technologies which are now fully perched on center stage with ripple effects going out in all directions. 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. But those technologies take money to purchase and countless hours of training to put into good use.

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. We’ve noticed that as companies get focused on applying AI to their core business, at least for the near future, they are turning to more and more outside vendors to help them keep up with changes that impact their non-core functions. 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. Staffing is definitely on the list of non-core functions that offers easy and low-cost outsourced solutions.