A Look at the 2023 Job Market
January 27, 2023 – Despite the recent headlines about corporate layoffs, in Q4 of 2022 and even in recent days, most employees need not worry that their own jobs are at imminent risk. In a new report, TurningPoint Executive Search’s Elaine Rosen says it’s important to look closely at who is laying off and why. In Q4 of 2022, for instance, the biggest layoffs tended to be by the biggest companies, many of whom are in the tech sector: Amazon, Salesforce, Vimeo, DoorDash, Twitter, Zillow, and Meta, to name a few.
“These organizations saw some of the largest (often overzealous) hiring in late 2020 through 2022,” said Ms. Rosen. “The demand for their services surged during the pandemic, and valuations soared. Companies responded and scrambled to fill the needs, hoping (and assuming) that demand would continue indefinitely. They were wrong.”
Additionally, the fear of an impending recession and a rollercoaster-like stock market hit the marketplace hard. Zillow released five percent of its workforce due to declines in the housing market, and Carvana laid off 2,500 people (via Zoom, by the way) due to a recession in auto sales.
These kinds of numbers are naturally going to cause some anxiety, but Ms. Rosen explains that there’s one more thing to consider: What does the staff size look like when compared to pre-COVID? “You’ll find that many organizations actually rang in 2023 larger than their pre-COVID size,” she said.
What about the little guys? As a boutique, retained executive search firm, TurningPoint has the finger on the pulse of small to mid-sized companies. After speaking to leaders at dozens of those companies, the firm says it saw something very different than many people might have expected given the headlines.
The Practical Optimist: An Entrepreneurial Journey Through Life’s Turning Points
No one will dispute these are turbulent and troubled times, times when “business as usual” no longer seems like a viable attitude. So, just how do you cope with a world that often seems to be spinning out of control — especially when your business is caught up in all the chaos? Now, Ken Schmitt, founder and CEO of TurningPoint Executive Search, pulls back the curtain on the many life-changing challenges he’s faced as a business leader in The Practical Optimist: An Entrepreneurial Journey Through Life’s Turning Points to reveal what’s worked for him — and what hasn’t. This frank, funny and revealing book pulls no punches as Mr. Schmitt details the massive challenges he’s faced personally and professionally in his journey to the C-Suite, leading his own company. More importantly, he also breaks down the secrets and strategies he’s discovered to be the most effective in navigating the highs and lows which all businesses experience. And he layers it all with a personal touch that makes his advice relatable and real.
“Rather than laying off existing employees, many are simply implementing a hiring freeze… for now,” said Ms. Rosen. “Retaining their staff, avoiding restructuring, and retrenching is their top priority. The best way to accomplish this is to secure those employees and put off bringing on new ones. Will the freeze thaw? Most definitely. When? No one is sure.”
A new report from Challenger, Gray & Christmas Inc. says that in 2022 employers announced plans to cut 363,824 jobs (up 13 percent from the 321,970 cuts announced in 2021). That’s no small matter – especially for those being cut. “But it’s important to put those numbers in the right light,” said Ms. Rosen. “Large companies with over-eager hiring over the last few years are having to make big changes in the face of a recession. However, many still come out ahead of the retention game compared to pre-COVID years. While the small to mid-sized players continue to fight to hang on to the people they have and temporarily sideline their recruiting efforts.”
Veteran Boutique Firm
TurningPoint is an executive recruiting resource for sales, marketing, operations, and executive leadership professionals across the U.S. The firm launched in 2007 in San Diego, CA. Its team offers experience in recruiting, human resources, sales, marketing, training, and management. TurningPoint serves privately held, venture-backed start-ups, private equity-owned early-stage, and mature, family-owned businesses.
Related: Retaining Your Employees During the Great Resignation
Ken Schmitt, who has been a recruiter for close to 25 years, is founder and CEO. Mr. Schmitt and his team at TurningPoint have placed nearly 400 of the nation’s leading sales, marketing, operations, and C-suite professionals, partnering with national clients across numerous industries such as tech, software, transportation, manufacturing, distribution, consumer products, professional and financial services, healthcare, life sciences, and hospitality.
Mr. Schmitt recently sat down with Hunt Scanlon Media to offer his thoughts on the executive search industry’s current outlook and challenges.
Ken, what do you expect for the recruiting industry in 2023?
After a record year in 2021, followed by a robust Q1, Q2, and Q3 2022, then a significant slowdown in Q4, we are expecting modest growth in 2023, in the neighborhood of 10 percent to 15 percent. While layoffs are increasing among big tech, gig economy, fintech, and some big media companies, we are focused on the lower to middle market segment, where the impact of the economic slowdown has been less intense. There are still many companies that are struggling to find talent to fill key impact positions across multiple functions, and while we may be coming off the peak of the war for talent, there are still many battles being waged to find good people.
Some fear a possible recession. What are your thoughts?
Ever since the media started amplifying the potential for a recession in the beginning of Q4, I have been in the “short and shallow recession” camp. When people think of a recession, what comes to mind most often is the global downturn we saw in 2008, when in reality the vast majority of technical recessions are more shallow. 2008 was called “The Great Recession” for a reason and like COVID, it is not a common occurrence. Granted, the economy is certainly slowing down in many areas. However, there are many other segments that are still doing quite well (namely the labor market and higher end consumer spending). And while the media makes it sound like every company under the sun is experiencing massive layoffs, what they aren’t reporting is: 1) even after these layoffs, the majority of these companies will still have a higher headcount compared to pre-COVID levels; 2) it was very difficult for many companies to predict whether or not the demand spike in late 2020 and throughout 2021 was sustainable, and as a result, many of them over hired in order to keep up with that demand; it was inevitable that once things began to slow, there would need to be some adjustment to their payrolls; and 3) the Fed is doing it’s job and we are seeing a consistent, albeit slow, drop in inflation which is slowing demand for some goods and services, but not to the point of tipping us into a full blow recession.
“While 2021 and most of 2022 were the year of hiring and sky-high compensation levels, I believe 2023 and 2024 will be the years of retention and cross-training.”
How busy is your firm right now and what types of roles are most in demand?
The first quarter is almost always our strongest quarter, and 2023 is no exception. We are starting out quite busy. We focus in five key functional areas (operations/finance, HR, sales, marketing, president/CEO), across the country and spanning all industries. As such, we are seeing a huge demand for mid-level, experienced business development and sales talent, sales leadership, and operations. We have seen a definite slowdown in hiring marketing talent, but typically as demand slows, HR and marketing are the first to feel the effects. Many times these functions end up being outsourced, until demand returns. This is one of the reasons we will be launching a new strategic HR consulting practice in late Q1.
Any current trends that you are witnessing in the search sector?
While 2021 and most of 2022 were the year of hiring and sky-high compensation levels, I believe 2023 and 2024 will be the years of retention and cross-training. High performing employees will need and expect to be empowered and engaged and leaders need to recognize this by investing in their existing talent
Give us an overview of your new book.
I have always been a huge fan of journaling, ever since my days at Heidrick & Struggles, and continuing into the launch of TurningPoint Executive Search in 2007. I’ve found it somewhat therapeutic and educational to chronicle the decisions I’ve made as an entrepreneur, business owner, leader, mentor, and lifelong learner. I wrote The Practical Optimist to share my experiences with my network in a humorous, accessible, and fully transparent way. I didn’t want it to be preachy or theoretical. Using dozens of real world experiences from business and my personal life, combined with a healthy dose of movie references (I am a huge movie fan and I own over 650 DVDs), I hope to bring some visibility to the life of a small business owner. The title comes from the fact that my personality is a blend of my mom’s practical approach to life, and my dad’s optimistic and entrepreneurial viewpoint. I hope our readers come away with the courage to take control of their career, taking calculated risks along the way.
Related: Hiring Top Talent in Unprecedented Times
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
