With the goal of helping employees better navigate their careers, LinkedIn recently introduced a monthly workforce report for the United States. Based on an analysis of changes to individual LinkedIn member profiles, the report is intended to help employees understand hiring trends by industry, and the February edition paints a pretty optimistic picture of the overall job market:
Hiring across the U.S. was 11.4% higher in January 2017 than January 2016. Seasonally-adjusted hiring … was 11.8% higher in January than December. Hiring was higher in almost all industries in January 2017 than January 2016 as well, with oil and energy experiencing the highest spike in hiring year-over-year – up 23.3%.
In an uncertain political and economic environment, this data is an important gut check for employees. They may be thinking about making a move, but don’t want to quit prematurely and find themselves in the unenviable position of “last in, first out” in a few months at their new employer if the economy sours.
The one important caveat to keep in mind, however, is that this large increase in hiring is based only on LinkedIn’s dataset. It’s a large database, but there’s self-selection bias involved in people reporting taking new jobs and quitting or losing a current job. (There’s also the question of how well LinkedIn screens out fan pages for famous people, like the 19th century abolitionist Frederick Douglass, who has two pages on the site). So it’s much harder to say whether these strong numbers reflect net new hiring in the labor market (so good news for everyone) or just hiring activity among the same pool of talent that tends to have LinkedIn profiles (so good news for some employees, but not all).
Going straight to the official source and consulting the US Bureau of Labor Statistics, there were considerably more jobs created in January 2017 compared to January 2016, but the smaller number of new employees in January 2016 came on the heels of very robust job growth in the last quarter of 2015, whereas new job growth at the end of 2016 was softer by comparison. So this may indeed indicate that some hiring at the end of 2016 was pushed into 2017 and may continue to benefit today’s job seekers. It’s important that employees look at multiple sources to gauge the health of the job market, just like they would when making any other sort of major life decision. This is exactly how we advise recruiters and validate trends for them and hiring managers on the other side of the job equation.
That said, CEB’s quarterly data on thousands of employees in the US labor market (which CEB Recruiting Leadership Council members can see here) also directionally corroborates LinkedIn’s findings. In the last quarter of 2016, employee job search activity spiked 7.2 percent compared to summer as US employees’ job perceptions improved significantly in the second half of the year. For those employees concerned about global economic conditions hurting job prospects in the US, we’ve found that globally, employees’ confidence in the business environment and future job opportunities are at their highest levels since 2015.
Another thing job hunters may be intrigued by in LinkedIn’s report is the light it shines on what cities seem to have the best job prospects:
Seattle, Portland, Austin, Denver, and Charlotte gained the most workers over the last 12 months. For every 10,000 LinkedIn members in Seattle, 68.2 workers moved to the city in the last year – mostly from San Francisco, Chicago, New York City, and Los Angeles. Seattle, Portland, Austin, Denver, and Charlotte are all cities that have a lower cost of living than cities like New York and San Francisco, and have access to the great outdoors. This is a trend we’re keeping an eye on.
Here is where people looking to change jobs (and managers seeking to hire them) should exercise extra caution. LinkedIn’s data is potentially helpful for making a cross-country move, but the reality is that college graduates and people without deep ties to their current location are the only ones likely to seriously consider doing so. Also, there’s no way to establish causality between where people went and why from LinkedIn’s data: “Access to the great outdoors” might not actually be what’s driving people to Seattle.
Most of us consider many different factors before changing employers. CEB’s Global Talent Monitor shows that the most common reasons US employees decide to quit their job are concerns over future career opportunity, compensation, people management, work-life balance, and opportunities for development. The top five considerations that entice workers to accept a new job, meanwhile, are compensation, work-life balance, health benefits, location, and stability.
To help US workers benchmark whether they’re getting a good deal when they change employers (as well as to help managers benchmark pay rates), we track compensation changes particularly closely. Most employees in the US who stay in their current job expect a 2.4 percent pay increase in 2017. If they were to change jobs, however, they would expect to obtain at least a 5.6 percent increase in total compensation. And at a global level, changing jobs historically has yielded the average employee a 14-16 percent increase in total compensation. (For those who changed jobs around the world at the end of 2016, they obtained a 14.9 percent pay increase, on average).
LinkedIn’s report may be a useful tool for employees to understand potential trends in the labor market, but these trends need to be put in the right context to understand what they mean, and while LinkedIn’s dataset may be massive, a large sample size doesn’t always translate to universally applicable findings.
CEB Corporate Leadership Council members can read our quarterly Global Talent Monitor, as well as its US-specific version, for more information on what attracts and retains employees. Recruiters and hiring managers looking to leverage the power of big data in hiring can access additional, targeted labor market insights and reports through TalentNeuron.