Economists largely agree that the labor market is “cooling,” but one recruiting industry veteran says that is a significant understatement.
Brian Howard is the founder and president of the Howard Group, a boutique search firm located in Overland Park, Kansas, that has been in business for more than 30 years, which companies hire to recruit candidates in an array of white-collar positions.
He said the job market is in “bad shape.”
Howard told FOX Business in an interview that he noticed signs of weakening about two years ago that became evident roughly 18 months ago, and he said the market has been slow to poor for the last 10 to 12 months.
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Hiring for tech management and sales has virtually dried up, he said, and while that sector tends to be boom-and-bust, recruiting for insurance – more of an “ebb and flow” industry – is now in a “sad state of affairs,” too.
Howard has noticed a trend of more white-collar workers accepting independent contractor or 1099 positions out of necessity and companies opting to fill temporary rather than permanent positions.
He said the recruiting industry in 2024 is starting to feel like it was in 2009 after the financial crisis, when there was anecdotal evidence that somewhere around half of outside recruiting firms went out of business.
Another telltale sign of the weakening job market for Howard is that his firm is receiving an influx of calls from job seekers and a noticeable downturn in requests from his clients – typically companies with 100 to 200 employees – looking to fill positions.
He said companies are telling him that they are holding off on hiring due to uncertainty about the economy and what will happen in the presidential election.
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“We’re experiencing a job market recession,” Howard said. “Now, recessions still have economic activity. This is subdued. That’s what we’ve seen. We’ve still got activity, but it’s way down.”
Labor expert Jason Greer, president of Greer Consulting, said he does not disagree with this idea of a job market recession.
“There are a number of factors weighing against job seekers and even those who are currently employed but are on the lookout for new opportunities,” Greer, also known as “the employee whisperer,” told FOX Business.
Greer said that even though unemployment ranges between 4.1% and 4.3%, the hires rate has fallen to its lowest level since 2014, which he said is basically the equivalent of an employment rate near 7%.
He added, “Employers remain weary of overstaffing in light of a potential recession, despite the fact that the economy is still relatively strong.”
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