Update from HireVue’s CEO: The First Half of 2024

As we look back on the first half of 2024, the hiring landscape has remained mostly unscathed, despite tumultuous current events. Global growth projections are up in some countries and down in others. Though we’re not out of the woods completely, there are signs of improvement.

As of June 2024, the total nonfarm payroll employment increased by 206,000, with significant job gains in government, health care, social assistance, and construction. In the last three months, our platform data shows customers and their candidates completed 3 million interviews (47% were on mobile devices), 39 million chat and text messages, and 16 million assessments. The sectors in the quarter with significant interview growth include retail (+21%), education (+18%), consumer goods (+23%), and construction and mining (+22%).

All eyes on central banks and inflation

As of mid-2024, inflation remains a significant concern in the US economy. The Consumer Price Index (CPI) indicates that although inflation continues to fall, it is still not at the Fed's target rate of 2%. Persistent inflation has led to increased costs for goods and services, affecting both consumers and businesses. For employers, the rising costs of operation have created a challenging environment for maintaining profitability while offering competitive wages.

In response to the easing of inflation, the Federal Reserve has signaled potential interest rate cuts in the coming months. This move aims to stimulate economic growth by making borrowing cheaper for businesses and consumers. Lower interest rates can reduce the cost of financing for companies, potentially leading to increased investment in business expansion and hiring. However, this monetary policy shift also carries the risk of further complicating the inflation landscape if not managed carefully.

Why it matters

The potential rate cuts are expected to have a mixed impact on hiring:

1. Increased hiring in certain sectors: Lower borrowing costs may encourage businesses, particularly in capital-intensive industries like construction and manufacturing, to invest in new projects and expand their workforce.
2. Wage pressures: Despite the potential for increased hiring, inflation continues to pressure wage growth. Employers may need to offer higher salaries to attract and retain talent, further impacting their operating costs. This scenario is particularly challenging for small and medium-sized enterprises (SMEs), which can struggle to compete with larger companies in terms of compensation.
3. Consumer spending and job creation: If rate cuts successfully boost consumer spending, businesses in retail and service industries might see increased demand for their products and services, leading to more job openings. However, the effectiveness of this strategy depends on how consumers respond to changes in interest rates and their confidence in the economy.
4. Talent market dynamics: The current tight talent market adds another layer of complexity. With more job openings than qualified candidates, companies might find it challenging to fill positions quickly, even if they have the financial means to hire. This could slow down the intended positive impact of rate cuts on employment levels.

The continued shift toward skills-based hiring

Our teams in the UK and US just wrapped up their early careers conference season and leveraged our most recent research report, The State of Global Early Career Hiring 2024 in their conversations. The report data and customer meetings make it clear that graduate screening proxies are withering:

• In the U.S. less than 40% of employers reported that they are screening candidates by GPA.
• In the UK, 54% of employers expect to move to a recruitment approach that focuses on evaluating candidates based on their skills, rather than education or past work experience alone.
• In Australia, only 30% of employers said they felt examination results were ‘very important’ or ‘quite important’ to assess during the selection process, down from 38% in 2022.

Why it matters

There isn’t a scalable path forward for skills-based hiring that doesn’t include a combination of AI-backed and digitally formatted traditional assessments.

And it’s clear that hiring leaders are excited about the future of a forward-looking, skills-based ecosystem. Nearly 75% of hiring leaders in our Global Guide to AI in Hiring say they trust AI to recommend who they hire. What’s more, two-thirds are excited about using AI at work and say their attitude toward AI in the workplace is more positive than just one year ago. There has never been more opportunity for talent teams to leverage cutting-edge technology that benefits candidates by ditching rearview recruiting proxies like resumes.

The first half of 2024 has demonstrated once again that the right technology and agility are key to navigating the complexities of the modern hiring landscape. Building strong, resilient teams is foundational to success, regardless of what else is happening outside the business.