2021 came and went in the blink of an eye. Coming off of an extremely challenging year, no one knew what to expect 12 months ago. We saw signs of the job market thawing in Q42020. The Unemployment Rate hit 6.7% in Dec 2020 (down from 14.7% in April 2020). But a recovery was far from certain.
Twelve months later? Labor shortages are plaguing every industry. The unemployment rate hit 3.9% in December 2021. But that is only part of the story. The labor participation rate (percentage of Adult Americans in the workforce is near an all-time low of 61.9%. Broad numbers about the market as a whole aren’t terribly useful. Understanding how they affect you or your company is more important.
Hirewell started releasing our Quarterly Data Insights series to discuss the trends we are seeing in hiring. We’ve got 90+ recruiters across the US. They are spread across six functional practices – Tech, Human Resources & Recruiting, Finance & Accounting, Marketing, and Real Estate/Construction. In 2021, we helped over 350 companies hire over 1500 people. So we see firsthand what is happening when it comes to hiring. We crunched the numbers to see what happened in 2021. And what might be in store for 2022.
2021 Hiring Trends
The year over year increase in hiring volume was massive. Our hiring volume increased 2.5x. Hiring increased 30% every quarter (compared to previous quarter) until Q4, when we saw the standard slow down around the holidays. When looking at year over year numbers, Q4 was up 310% from the prior year.
What was hot? Software engineers. But that is no surprise. The insatiable demand for engineers barely slowed down in 2020. In 2021 we helped companies hire over 200 software engineers. But that is only part of the story. We saw the average salary increase every quarter.
That’s an increase in average compensation of 18% in one year.
What else was hot? Recruiters. Hirewell launched its HR & Recruiters practice 10 years ago. In that time, we have placed several hundred recruiters at companies across the US. We placed 90 at clients in 2021. That was after placing 1 between April and October 2020. When the market swings that wildly, it catches a lot of people by surprise. It also causes salaries to spike quickly.
-Q1 Average Recruiter Salary = $85k
-Q3/Q4 Average Recruiter Salary = $114k
That’s an increase of 34% in roughly 9 months. What a time to be alive for recruiters.
2021 Hirewell Internal Highlights 2021 was a busy year for us at Hirewell.
-We grew by over 40 people and are just under 100 employees.
-We expanded nationally. Pre-pandemic, more than 90% of our employees were in Chicago. Now more than 33% of our people are in other markets.
-Our turnover was 6% (roughly a quarter of our industry’s average). The vast majority of that turnover was our employees going to work for our clients.
The biggest story for us in 2021? We took on outside investment from Prytek and bought a software company. We think services + technology will be what drives our continued growth.
2022 – What’s next? It is a fool’s exercise to predict what is going to happen in the course of a year. That doesn’t mean we don’t have some educated guesses though.
-Hiring in January picked up right where 2021 left off. We saw an 18% year-over-year increase in job openings. January starts are double what they were in 2021
-There are roughly 11,000,000 open jobs in the US. There will continue to be a shortage of qualified candidates.
-Recruiters are going to continue to be in high demand. As are software engineers.
-Wages are going to continue to rise, but for how long? 20+% increases are not sustainable for most companies.
-Companies need to start thinking outside the box. Upskilling existing workers and hiring people without prior experience needs to be a priority for all companies.
-Recruiting technology needs to evolve. There is a shortage of recruiters. And they spend way too much time sourcing candidates. We are working to address this challenge.
What’s next for Hirewell?
We are continuing to hire – we’ve brought on 8 new hires in January. Our OnDemand Recruiting practice is on pace to grow 100% from 2021. Our investment in technology is already paying dividends for our recruiters at Hirewell. We are excited to roll it (Sourcwell) out to clients later in Q1. If you are interested in becoming a beta client – let us know!