The New Company-Driven Labor Market

April 16, 2020

During the last month, it's become clear that the pendulum in the U.S. labor market has shifted away from candidates toward a new company-driven normal. At the end of February, the U.S. had 6.9 million job openings and 5.8 million unemployed people. This ratio was very much unexceptional; the number of job openings in the country had exceeded the number of unemployed people for 24 consecutive pre-crisis months. The U.S. job market was squarely candidate-driven before the coronvavirus.

Since then, the labor market has deteriorated rapidly. More than 22 million Americans have filed unemployment claims in the last 30 days alone, the largest single-period increase in decades. While BLS data for April isn't out yet, it’ll eventually show that the number of unemployed people far exceeds the supply of available jobs. It’s the beginning of an uncertain, highly competitive period for job seekers.

The technology industry is not immune from these changing market dynamics. This roundup of tech layoffs from Erin Griffith is particularly heartbreaking, and it’s not even close to exhaustive. We’re seeing a second wave of layoffs among startups in NYC and SF this week, and candidate reactivations (i.e. existing users coming back to explore the job market again, likely because they've been furloughed or laid off entirely) are higher than ever.

If you’re in the unfortunate position of looking for a job during this downturn, speed, optionality, and warm introductions will be worth their weight in gold during your search. Run as broad and inclusive a process as you possibly can. Take every recruiting call, even the ones from founders and hiring managers whose companies might not look particularly interesting to you. One lesson that we’ve learned from helping thousands of startups recruit talent over the last six years: our first impression of a company almost always drastically undervalues the potential of a business and the quality of the team working on it.