Recruitment & Retention

HR jobs are on the decline, and technology might be partly to blame

Job postings for HR roles are down 45% from last year, according to Indeed data.
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· 4 min read

US job postings are declining overall, but the drop in demand for HR employment has been particularly precipitous.

Job postings overall were down 17% from the previous year as of June 29, according to Indeed’s job postings index, which measures the average number of seasonally adjusted job postings on a given day, using a seven-day trailing average. By contrast, job openings for HR roles had declined by 45% year over year. While job openings overall remain 27% above their pre-pandemic level, HR jobs are only about 9% above their February 2020 baseline.

The decline in available HR jobs is in part a knock-on effect of a broader pullback in hiring, according to two economists who spoke with HR Brew. But it may also be tied to technological advancements in the industry that have allowed companies to streamline their HR processes, Julia Pollak, chief economist with ZipRecruiter, said.

Less hiring overall = fewer HR jobs. Nick Bunker, Indeed’s director of North American economic research, said in a June 22 press call the decline in HR job openings may be “a consequence of a general pullback in hiring demand, in that you're not going to want to hire folks who either are recruiters or…their main job is to hire folks, or to staff workers, if you're not adding more people to your headcount.”

As of May, there were 9.8 million open jobs in the US, according to the Bureau of Labor Statistics—higher than prior to the pandemic, when job openings hovered at around 7 million—but still 14% lower compared to the same period last year. Fewer Americans are quitting their jobs, too.

As the economy cools, employers might be asking themselves, “Do we need quite as many HR people, if we're going to have fewer jobs, and employee turnover is starting to go down?” said Jay Denton, chief analytics officer for LaborIQ, which provides labor market analytics to HR professionals. The process of hiring and onboarding workers has “cooled off from how hot it was the last couple of years.”

Within HR, recruiting has been one of the subsectors hardest hit by the slowdown. Demand for recruiting jobs fell at 1.5 times the rate of the broader HR function between February 2022 and 2023, according to LinkedIn data.

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Though industries like tech, banking, and housing have been disrupted over the past year, Denton said overall employee count has continued to grow in industries such as health care and government, which may in turn spur demand for more HR professionals. He suspected HR pros who are currently job hunting may be more willing to consider positions at small- or medium-sized firms that weren’t able to compete with larger companies when demand for workers was at a fever pitch.

Technology complicates long-term outlook. ZipRecruiter’s Pollak offered a somewhat less rosy hypothesis that HR jobs are on the decline: Companies simply don’t need as many of these workers, thanks to advancements in technology like artificial intelligence and automation.

“It's increasingly possible to have those functions sort of digitized and standardized and outsourced,” said Pollak of HR. As vendors emerge who can “run HR for multiple organizations and a fraction of the staff, this is a field that's becoming a lot more efficient.” At the same time, companies may be holding off on hiring people for HR roles and instead experimenting with AI, she added.

HR startups saw big business in 2022, the Information reported in February, with the valuation of companies like Deel and Oyster doubling, even as tech companies laid off workers. In some cases, companies have started investing more in HR technology to account for fewer staff, the publication noted. Jasper Helling, SVP of people operations for buy now, pay later firm Sezzle, told the Information his firm plans to increase its investment in HR tech by 14% this year after laying off 20% of its workforce in 2022.

“We don’t need internal recruiters anymore,” Helling said.

In fields like recruiting, some employers are torn between making the process more human, versus more efficient and digitized, Pollak said. She predicted companies who continue to care about the employee and candidate experience will continue to invest in top HR talent.

Still, “the long-term outlook for this industry is that more and more roles will be automated,” she said.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.