Evan Sohn, Recruiter.com Chairman and CEO, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss the outlook on the labor market given April’s jobs report numbers.
ALEXIS CHRISTOFOROUS: Let's dive deeper now into that disappointing jobs report for the month of April with Evan Sohn, chairman and CEO of recruiter.com. Evan, thanks for being with us. We're seeing an ironic dynamic playing out. The unemployment rate is rising unexpectedly to 6.1% last month. Yet more and more businesses are saying they're having a hard time filling positions, especially for those lower wage type positions. What's going on here?
EVAN SOHN: You know, I hate to use the word-- first, thank you for having me on your show. I hate to use the word "unprecedented," but the jobs market now is unprecedented. We're getting a tighter job market in the highly skilled jobs. And yet, the unemployment rate in college-- in under college grads, so high school grad and below, is just increasing significantly. Access to the hourly workers is harder than ever before. You know, you're seeing the public job boards have millions and millions of jobs open. Yet there are millions and millions of people unemployed. And they're even more unemployed. This really is an unprecedented thing.
And I'll tell you one of the things that our recruiter index pointed out was for the first time in the index, it actually hit 4% for talent acquisition, meaning companies were actually hiring more recruiters than they were hiring before. That's one of the jobs they were looking for, companies hiring recruiters to help fill these roles. Now the recruiter index actually dipped down for the month. And maybe they knew a little bit better than the rest of us did that there is a difficult job market now.
KRISTIN MYERS: So were there any bright spots as part of this report for you? Any bit of optimism looking out ahead, at least when it comes to the labor market?
EVAN SOHN: Yes, so a couple of things. One is, you know, we saw financial services, accounting services, those were up. Healthcare is pretty consistent. Manufacturing was consistent. Logistics were consistent. Sales jobs were all of a sudden up. We haven't seen that. And those were up a couple of points in the index themselves. You know, the return to work is not just going to be remote. I think those remote jobs were filled. That's what I would probably say.
And I think there's a shift now to, I think 70 something percent are now either in-person or hybrid. So that's a-- even if it's a hybrid job, that's still going to be geographically located job. And I think before, certainly over the last bunch of months, when you were looking for roles that were 100% remote, it didn't matter where they were. And it was probably easier to fill those roles.
Now we're up against challenge of geographically located jobs have to find the right person with the right skill set willing to take the job at the right price at the right location, who's willing to actually come into the office as well. And we're seeing childcare issues and other issues of people wanting to stay remote. And we're going to have this tension now of candidates that want to stay remote and the jobs that need to come in person.
ALEXIS CHRISTOFOROUS: Evan, I want to get your take on what the US Chamber of Commerce is calling for now. They're blaming this weak jobs report in part on those $300 enhanced unemployment benefits that lots of folks have been getting. They want the government to stop those payments because they say they are not incentivizing people to go out and get the jobs, especially those lower wage jobs, where we know a lot of employers are having trouble filling them. Do you think that that might actually help things and get people back to work?
EVAN SOHN: Look, I actually agree. We've seen anecdotally with some of our customers in the hourly workers, where they've seen an increase in churn. And that's not with our customers, but that whole sector. Why work if I could actually stay home and make similar money not working? But look, I think what it requires us to do is to figure out how to tap into other pools of talent for those roles.
You know, one of the things that we saw was 20% of the candidates that when we asked recruiters, 20% of those candidates were looking for new experiences. Well, guess what? A first job is an experience. And I think what we have to start to do is, these roles need to be filled by somebody. There has to be someone in these roles.
And if the people who had those roles last year no longer want those jobs because of stimulus, well, let's find another pool of people, whether they're high school graduates looking to gain experience, whether they're new college graduates that are having a hard time finding a job, let's go figure out how to make-- give these opportunities for a new experience to those people. You know, we all had our first job. We all remember our first job and the experience we gained from the first job. Well, let's give those people a chance to have these opportunities and these positions.
KRISTIN MYERS: Is there a fear, then, Evan, around the number of folks that are leaving the labor force? It is overwhelmingly women right now. But how many of those jobs are essentially permanently lost-- or rather, workers that have left the workforce are not looking for employment and might not for quite some time. Do you think that that trend might possibly continue, especially as that those extra UI benefits might continue into the near term?
EVAN SOHN: Yes, so look, it's really disheartening to see the numbers dip. Recruiting, we're all about helping people get jobs. And when we see unemployment numbers go up for the first time in, really, this entire pandemic actually increase, it's incredibly sad to watch that happen. And I think that we were at such a tight labor market a year ago, a little over a year ago, with the most number of jobs available for women and everyone. And now, there are people who have said, hey, I need to stay home. You know, when we talk about hybrid jobs, maybe those are a good opportunity then.
Another interesting statistic for you is that 35% of all adults in the US have some sort of gig. And, you know, I think a couple of months ago they reported the most number of EIN numbers, sort of the Social Security number for a business, were on a huge rise. So people are figuring things out. People are starting up new jobs. And again, these are more of the entrepreneurial folks. But yes, it'd be great to see a return to labor force. But, you know, if you've been home and childcare is expensive and the wage is not increasing to pay for child care, I'm going to be forced to stay home or find some sort of gig that provides a sideline income.
ALEXIS CHRISTOFOROUS: I think you hit it, Evan. You said the word "wages." And if you look in this report, wages rose, hourly wages, 7/10 of a percent month over month, but they were basically unchanged year over year. At some point, when are employers really going to have to step up and offer employees a more competitive wage?
EVAN SOHN: You hit the nail on the head as well. You know, we've been tracking for months the priority of the candidates. This is through our recruiter index. And almost neck and neck this entire time was compensation and remote work. And remote work was always ahead, except for two months, during this recruiter index. So people were saying, hey, you know what? I'd rather take less money, but work remotely. And that existed the entire time, except for two months. One time when the-- we saw a huge spike in transportation, and there was another one with sort of seasonal jobs.
But now we're seeing compensation really go far ahead of remote work. And so, now, if my priority is compensation, those jobs must align with an increase in wage. And we think one of the problems that the wage did not increase, yet the priority for compensation now that I'm ready to go back to work, that wage better be there as well.
ALEXIS CHRISTOFOROUS: And you better believe the Fed's going to be watching to see where the wage inflation is going to start kicking in. Evan Sohn, chairman and CEO of recruiter.com, thanks for being with us today.