ZipRecruiter CEO Ian Siegal sits down with Yahoo Finance Live to discuss the job site's second-quarter earnings, trends in the job market, employees' demands for remote work options, and ways the interview and recruiting process is changing.
- Now let's turn to the jobs market because according to the July jobs report, there are plenty of openings out there. But employers simply aren't offering what workers may be looking for. Let's turn to ZipRecruiter CEO Ian Siegel, ZipRecruiter was just out with earnings after the bell yesterday.
And Ian, the number one thing that stuck out to me in your earnings report was you said that you had a strong quarter, yet you're starting to see some softness in the labor market. I guess explain to us just how soft we are seeing the labor market right now and how much worse it could potentially get because that's a fear here as we do see the economy slow down.
IAN SIEGEL: Well, it's true if you look at second quarter as a whole, the US labor market was still on a tear. And that's a big part of the reason why ZipRecruiter was able to beat both on the top line and the bottom line. However, the last two weeks of the quarter, we saw a meaningful slowdown in the number of new jobs that were getting posted. And that fundamentally makes sense when unemployment drops to 3 and 1/2% and the 20 million people who lost their jobs during COVID find themselves back at work.
What you have right now is effectively peak employment. It is extremely difficult for employers to find people who have the right skills for their open jobs. And a lot of them rather than continuing to recruit are basically trying to do more with the people that they already have.
- That as an interesting trend. The other one, of course, is remote work. What are you seeing in terms of job postings? How many people are posting remote work? And how many want it or are requiring it?
IAN SIEGEL: I think the single biggest change in the US labor market from two years ago is the surge in demand for remote work amongst those participating in the labor force. 62% of people who are working right now would like either fully remote or mostly remote work. That is a huge change from where we were before COVID when remote work was effectively a niche part of the overall labor market with, really, less than 2% of jobs even advertising it. Today, it's up to 12% of jobs that are explicitly stating as a recruitment tactic that they will offer you either fully remote or hybrid work. And that is a trend that is only accelerating.
I think we're going to see that remote work is here to stay because once companies go remote, it's very difficult to go back to in office. No companies are proving successful so far and having that full return to office as a unique condition. A lot of them are taking some sort of a compromised approach. But I think remote work is definitely here to stay.
- And that's in the news, as you know, because Apple just announced their return to office, which has happened a couple of times over the recent several months given the outbreaks. But now they're saying September, they want employees back three days a week. Without knowing the internal dynamics there, how difficult do you think that will be in this environment?
IAN SIEGEL: I mean, it looks like it's going to be extremely difficult. And there's economists who are doing a lot of research on this topic right now. And in addition to saving roughly 70 minutes a day of personal time, working remote for people who are participating in the labor force is also being viewed by them as a 12% increase in compensation. All of that extra time plus all that perceived extra value, very difficult to compete with.
And a lot of companies have already stated they're going to go fully remote, which means Apple will be in competition when it's recruiting with companies that are offering the lifestyle that's such a large percentage of the workforce is looking for. This is very much a changing labor market. We really are, like, the future is now. And I think that the biggest trends that have emerged from COVID are definitely going to be remote work and this phenomenon of employers who are going to successfully recruit being the ones to go first.
If you look at surveys from this year, more than 37% of the people who have taken a new job this year were recruited to those positions as compared to just in the period pre-COVID, it was only 18%. So fundamentally, in order to have success in such a tight labor market, employers are being compelled to be proactive. Services like ZipRecruiter, which allow employers to effectively recruit job seekers before they've even applied, we're the ones who are driving success when it comes to recruiting. And I think that's going to be the trend you see into the future.
- Ian, what about pay? Because we talked to a number of personal finance reporters that are saying now is it time to renegotiate your salary. Now is the time to ask for money if you have a job. If you're out there looking for a job, are you seeing a trend that employees are demanding more? And how is the employer typically responding to that?
IAN SIEGEL: I mean, this has been an unprecedented run of increasing wages, increasing benefits, increasing number of jobs offered with signing bonuses. There has been an array of perks that have come to job seekers. And I tell you, if you are listening to this right now and you are someone who has been contemplating changing jobs, you are at peak leverage.
Right now is the last moment where you have maximum leverage to go change jobs. For the first time in effectively a year and a half, the number of open jobs has started to come down. As that number gets lower, there's going to be more competition for the open jobs, and it's going to be harder to negotiate on the terms that you want. This is the moment to go look for work.
- But, Ian, beyond the remote work work-life balance, what are those things that you can do that employers are trying right now to incentivize new employees?
IAN SIEGEL: Well, certainly flexibility has moved to the top of the list as far as what job seekers are looking for. If you look at people who have changed jobs, there's 4 million people a month who are quitting their jobs and looking for new jobs every month right now. And if you look at what's driving them, of course number one is going to be increased salary, which the majority of them are getting.
But very close number two is increased flexibility. Employers are going to have to adapt to the times. The period where there was ample supply of talent to do their jobs so that they could swap people out, that is effectively over right now. And it's going to be an extended period before they can go back.
Services like ZipRecruiter which enable employers to effectively proactively recruit people who either are passively looking or only modestly looking, that's going to be the new normal where employers are reaching out to job seekers because those are the messages that are getting the highest response rate. That happened more than a million times last quarter on ZipRecruiter. And it clearly is the beginning of a sea change in how the labor market works.
- Very interesting stuff from ZipRecruiter CEO Ian Siegel. Really appreciate you being here on Yahoo Finance. Thank you, sir.