4 Key Recruitment Questions Labor Market Data Can Answer

2023 has been a year of mixed headlines on labor. While some industries (like tech) have announced round after round of layoffs, others (like healthcare) are plagued by persistent workforce shortages. Meanwhile, unions in a variety of industries are striking to demand better pay, better protections, and better working conditions.

So what does all this mean for recruitment efforts? Not much, unfortunately. Too much depends on the specifics of a given organization: size, industry, location, etc. The good news: while headlines can’t offer much guidance on how to adjust recruitment efforts, labor market data can.

Here are four key questions aggregate labor market data can help large employers answer to guide recruitment efforts.

1. What Are the Right Title, Salary, and Benefits for a Given Role?

Okay, this first one is kind of three questions. But it’s hard to talk about one without the others. Creating a job listing with the right title, salary, and benefits is a crucial part of successful recruiting. A salary too low for the title can cause the role to languish unfilled. Ditto for the wrong benefits package.  

On the other end of the spectrum, a salary that’s too high for the title could lead to a flood of under-qualified candidates – and a big headache for your HR team. And with more states adopting salary transparency laws, these issues will probably continue. 

Labor market data can help you reach that “Goldilocks” combination by showing you what similar employers are offering. And if you choose to look at historical data, you can also track trends. For example, are organizations like yours shifting away from “developer” and toward “engineer”? Are you starting to see a new healthcare funding benefit (HSA, FSA, LSA, HPA) pop up more often? Having access to labor market data (including wage benchmarking) can help ensure the positions you hope to fill offer wages and working conditions in line with what workers expect.

2. Should We Consider Remote Employees?

Not every role can be remote, of course, but when a job can be completed remotely, should an organization offer that as an option? It’s a complex question, but one that labor market data might help answer.

If your headquarters are in an area with a high cost of living, you might be able to pay less for top talent that lives somewhere cheaper. Or you could offer a salary range dependent on the employee’s location. This can enable companies to hire top talent without paying top prices.

You can sort the data from Job Market Pulse, for example, by industry, job title, and metro market to see what people are offering for, say, sales managers around the country (or beyond).

Then again, if your organizational culture isn’t set up to support remote employees, the experience of those not in the office likely won’t be great, which could lead to short tenures and high turnover of remote staff – and likely higher recruitment costs as well.

3. Have You Rightsized Your Recruitment Budget?

Whether you have in-house recruiters or you lean on an agency partner, having the right recruiter capacity is an important part of filling roles in a timely fashion (and therefore keeping the business running). Labor market data can give you clear signals about whether your current recruitment budget is adequate for your organization’s needs.

For example, you could look at historical data for the roles you’re trying to fill in your region. If that data shows you that these roles typically stay open for a long time – meaning they’re difficult to fill – you might require more recruiter resources or a different incentive structure.

4. What Kind of Wage Growth Should You Expect Next Year?

Labor market data can inform larger organizational budget conversations in helpful ways.

For example: you might look at wage growth for your industry and region over the last year, along with the history of job openings in your industry. For roles that have persistently high opening levels, it’s important to also look at wages at organizations that might be your talent competitors even if they’re not your competitors from a product or service standpoint.

This was common during the height of the Great Resignation, where workers at low-paid jobs realized they could quit and get paid more for their skills in another industry.

Having wage insight about talent competitors can help employers determine whether, for example, a slight increase in employee wages or benefits might increase retention and thus offset recruitment and training costs by an equal or greater amount. Labor market data can help illuminate all of these things.

Better Recruiting Decisions & ROI Start with Labor Market Data

Any data-forward business understands the value of fueling high-stakes and high-cost decisions with relevant data. Our Job Market Pulse offers access to the data that can guide recruitment and hiring decisions, help employers confidently set salaries and define benefits packages, and generally stay competitive in any industry or geographical area.

If you’d like to see Job Market Pulse in action, let us know. We offer free custom trials and would be happy to help you determine which data points would be most valuable to guide your recruiting and hiring decisions in 2024 and beyond.