Professional and business services sector led on hirings, firings in March

Job openings decreased slightly in March, but hiring went up, suggesting employers are bringing on new workers at a faster clip than they were last year.

The number of open jobs fell slightly in March, coming in at 6.9 million, according to the latest Job Openings and Labor Turnover Survey. Quits and layoffs were flat, at 3.2 million and 1.9 million, respectively.

At the same time, hires went up to 5.6 million, an increase of 655,000 from February, when the hiring rate dipped to 3.1%, the lowest level since April 2020.

March’s hiring rebound shows that “employers are becoming more direct and streamlined about the hiring process,” Nicole Bachaud, a labor economist with ZipRecruiter, said. They’re gaining more clarity around what they’re hiring for, how quickly they want to hire, and how many people they want to hire, she explained.

Zeroing in on tech. One sector where the labor market looks particularly dynamic right now is in tech, Bachaud observed.

The professional and business services sector saw the biggest decline in job openings in March, by 318,000. Employers in this industry also laid off more workers than any other sector, shedding 527,000 workers. But this industry also led on hiring, with hires representing 4.7% of total employment.

Such trends suggest that while AI may not be changing the overall level of jobs, “it’s creating more turnover as jobs change,” Bachaud said. “The skills that are being demanded in tech jobs and specifically AI-enabled work [are] really changing what is being asked of workers. We’re seeing this turnover and this churn pointing to employers figuring out who is right for the role.”

Investing in current talent. Overall, the “low-hire, low-fire” dynamic appears to have persisted as of March, sources told us.

While hires may have edged up, most employees were content to stay in their jobs, as the quits rate remained at 2%.

Given the current scarcity of available talent, employers should consider upskilling workers who are already with the company, Raj Namboothiry, head of Manpower US, a division of Manpower Group, said.

“Internal talent is more stable, and hiring externally is riskier. It is slower, it’s taking time,” he said. “So looking to move people laterally instead of hiring you is going to be a critical differentiator.”

Upskilling doesn’t necessarily need to be centered around AI, he clarified. Helping workers improve their problem-solving, communication, and collaborative skills can be part of this process as well.