The number of job openings dropped 10% in August, indicating that the red-hot job market may be cooling down.
Data published this morning by the Bureau of Labor Statistics showed 10.1 million open jobs in August, compared to 11.2 million in July.
It is the most significant one-month drop since the pandemic started in March 2020.
“We may be seeing the beginnings of a softening in the labor market,” said Scott Blumsack, chief strategy officer at Monster.
As the number of open jobs fell, the number of layoffs rose to the highest level since March 2021. But the quits rate, which measures how many people quit their job in a given month, remained at 2.7%, slightly higher than the rate in July.
“The quit rate is at an elevated rate relative to historical trends,” Blumsack said. “I do think there is a lot of power amongst candidates to look for other potential opportunities out there.”
Experts said the situation puts pressure on businesses. Many have begun offering extra incentives to retain talent.
“To replace a top producer costs the company a tremendous amount of money,” said Stacie Haller, an expert with ResumeBuilder.com. “It could take up to a year to replace that person by the time the company hires someone and they get trained, and that’s even if they decide to stay.”
Even as it cools, the hot job market will likely delay some companies’ return-to-office plans. Ninety percent of companies plan a return to the office in the next year, according to a recent ResumeBuilder survey. But in a separate survey by Monster, 66% of people said they’d quit their job if forced to return to the office full-time.
“Companies apparently want everybody to come back in six months,” Haller said. “But I’m not sure the reality is going to be there because there are many challenges.”
ResumeBuilder’s data indicated three-quarters of companies still plan to hire for remote positions, even as they push a return of office on other employees.
“They’re not telling the world they’re making exceptions,” Haller said. “But if they are losing their top talent to remote positions, they’re going to have to do something. They’re going to have to wake up.”