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May jobs report: ‘The talent is not fully back to work,’ KellyOCG president says

KellyOCG President Tammy Browning joins Yahoo Finance Live to discuss May jobs report data, recessionary risks, the state of the U.S. labor market, and the Great Resignation.

Video Transcript

AKIKO FUJITA: Yeah, well, this is a perfect segue for our next guest, who has a good pulse on the labor market and whether fears of a recession are likely to reverse the employment picture. Let's bring in Tammy Browning, president of recruitment firm, KellyOCG. Tammy, it's good to talk to you today. What are you seeing in your numbers?

TAMMY BROWNING: Yeah, it's very interesting. When you look at the data, we are seeing, yes, the job market is strong. We are still seeing significant demand. And in fact, we're seeing demand across the board with some exceptions. When we look holistically at our job reports internally here at Kelly, we are seeing that there are some industries and segments that we are seeing a little bit of softness. And that specifically is in that high tech space.

But when we look at the other industries and other segmentations, we are seeing demand that is still very high in the manufacturing, light industrial space. In the industries, specifically, in life sciences, health care, and the automotive industry, it is really outweighing. So the reason we're still seeing great jobs reports is because the fact of the matter is, industries are still hiring. And with unemployment under 4%, we are in a very tight labor market.

And we anticipate that those labor numbers will be low for a very, very long time, as the talent is not fully back to work, as we've seen. In fact, what we're seeing is still about a 15% difference between the number of job applicants to the number of acquisitions or jobs posted this same time last year. So, frankly, the math just doesn't make sense. There's more jobs than there are people.

BRIAN CHEUNG: So, Tammy, on the point that, you know, Akiko and I were just discussing, have you seen any indication that businesses are starting to perhaps take some of those postings down? Because we know that they've been, at least for the last year, a year and a half, through this recovery, been trying to fill these gaps that they just simply can't find people for. And as the economy perhaps starts to slow, maybe that incentivizes them to take that down. Are you seeing signs of that or not yet?

TAMMY BROWNING: Yeah, so I think when we look at why something is posted or a job is posted, consider that organizations like to keep jobs posted for a lengthy window of time, so that they can have the maximum amount of applicant flow through the system. What we are seeing, yes, in the last month when we look at April to May and then again, now, May to June, we are seeing about a 15% decline in job postings or the number of jobs out there available today.

But what we are seeing is the hiring trends remain strong. So, yes, while I do think there's less jobs posted, I still believe there is a significant amount of opportunity available for individuals across the board. And in fact, as I indicated earlier, in some of those skill sets that are very specialized-- R&D, life sciences, clinical research, health care-- those jobs are still very much active. While the postings may not be out there, they're available today.

AKIKO FUJITA: Tammy, we were just showing a graphic here of companies that have already announced some hiring freezes. As you said, there is some weakness in the tech sector. We've seen some of these announcements come out already. But how much of that do you think is specific to tech, which has really grown at a rapid rate over the last few years? How much of this is an indication of what's to come in other sectors?

TAMMY BROWNING: You know, I think what we found is that while, yes, industries, specifically in the high tech space, we are seeing some softness. And some of that is due to what we're seeing with the war in Ukraine, what we're seeing just in terms of the industry itself. And oftentimes, the tech space is the first to pull back. And they're the first to say, we want to wait and see what's going to happen. In fact, we just launched this last month, a workforce agility report, that interviewed over 1,000 executives across 10 different industries themselves, in 12 countries.

And what we found is not just the industry itself that's failing or starting to weaken, we're also seeing a lot of executive resignations, specifically when you look at what's happened at Meta and other locations, where these executives are saying, listen, I want more flexibility in my job. And in fact, what we've recently coined as job loss is, we've got executives, 72% of them, and our report suggested that they intend to leave their job in the next two years. That's staggering.

So think about what happens when an organization has executive loss. It's disruptive. It has downstream implications. And frankly, employee value propositions or the engagement to an employee organization starts from the top. So when we see the wobbliness at that executive level, I suspect we will see that cascade. And the great resignation will, in fact, have much more implication in the coming months as time goes on.

BRIAN CHEUNG: Tammy, regardless of whether or not you're talking about executive level or entry level, when you see a type of imbalance, like two job openings for every one unemployed person, how does a firm like yours try to square those two things together? Because you're trying to do the labor market matching of still getting the right people for the right skills into the right job. Do you have to change your strategy? Is all this really difficult for a firm like yours?

TAMMY BROWNING: Yeah, it is very difficult. In fact, think of it a bit like grassroots recruiting. For many years, we had the luxury of posting a job or reaching out to one candidate. And that one person could apply and take a job. Today, we're having to reach out and build communities, talent communities. It is so incredibly important that organizations like mine educate the corporate America on employee value proposition.

If you think about why people want to work for your company, many-- just three years ago, the number one reason somebody may come to work for your company was pay and benefits. Today, it is now flexibility. Do you have flexibility in your workforce? Do I have creativity in my ability to work remotely? What does hybrid mean to your organization? So consider, yes, the math doesn't make sense when you look at it holistically.

But if an employer has the right employee value proposition, and they're attracting the right talent, and they're using firms like mine to help curate and keep that talent warm and ready and available, as soon as the jobs hit, before they ever are posted, the candidates are identified. And that is what's most important, is that there's robust tools and that there's robust resources of people engaging that talent to come work for your organization.