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An illustration of reporter Courtney Vinopal's headshot.

Courtney Vinopal

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The US labor market, like that first-year-of-college fling, continues to send very mixed signals about where it stands. The government keeps publishing data that looks promising for both job-seekers and employers, yet 

 it plans to lay off 270 employees, representing about 20% of its workforce, in response to “current market conditions.” In a May earnings call the company’s CEO, Ian Siegel, said ZipRecruiter had observed a slowdown “across industries.”

“We see employers paring back their hiring in response to the uncertain economic backdrop we now face,” he said. 

, both ZipRecruiter competitors, have also laid off workers in recent months, citing a slowdown in job openings.

The same day ZipRecruiter said it would lay off workers, the Bureau of Labor Statistics (BLS) 

 showing an increase in US job openings to 10.1 million in April, surpassing analysts’ expectations. Hires increased, while layoffs decreased to 1.5 million, representing just 1% of the workforce. The US 

 jobs in May, according to the most recent BLS figures; analysts had estimated just 195,000.

What explains recent rounds of layoffs in the recruiting industry, even as government data points to a still-robust labor market?

If you look beyond this latest report, job openings 

slowed from an all-time peak, Nick Bunker, research director at Indeed’s Hiring Lab, told HR Brew.

“Yes, they ticked up in April, but if you take a longer view, they peaked back in March of last year,” Bunker said. He noted a little less than half of the job openings came from retail alone, which can be volatile, suggesting the higher level of available positions may not endure.

Job postings on Indeed have been declining steadily since the beginning of last year. The site’s most recent 

, which is about a month ahead of the BLS data, showed openings declining 1.9% from the previous month as of May 25, Bunker added.

The pandemic-era labor market was exceptional, spurring record levels of hiring that meant big business for recruiters.

 in March 2022, employers in industries like manufacturing, retail, and education and professional services were struggling to hire enough workers to meet business demands. Meanwhile, workers were quitting their jobs in droves, emboldened by a robust labor market.

That “fever pitch” of hiring and competition for workers has now subsided, Bunker said. The rate at which US workers quit their jobs was 2.4% in April, just shy of pre-pandemic levels. And the April hiring rate, at 3.9%, matches what it was in 2019.

There’s still “a healthy amount of hiring,” in the US, Bunker said. But “it's less than what we were seeing a year, or two years, ago.”

As major job sites downsize their workforces, many recruiters and talent acquisition team members are out of work. Recruiting and HR were hit harder by tech layoffs than other departments, an 

 by technical interviewing platform Interviewing.io found, with about half the staff in each of these departments laid off.

Joel Knippel, global head of talent acquisition and talent partnership at Unilever, 

 that the recent BLS data suggests it’s still a “jobseeker’s market.” With labor-force participation rates still below pre-pandemic levels, he predicted job openings will outpace hires “for most of the better part of the year, potentially into 2024.”

“All of this means recruiters remain in high demand and that the strategic contribution of Talent Acquisition and Partnership…remains crucial to business success,” he wrote.

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Job openings rose in April. What does this mean for recruiters?

Sites like ZipRecruiter and Indeed are laying off workers, even though businesses are still hiring at a decent pace. 

 Why recruiting sites are downsizing, even as job openings remain historically high

Indeed, one of the biggest job sites in the world, recently announced changes that could fundamentally change the way some companies approach hiring.

The company announced in October 2022 that it would start charging employers each time a candidate starts or submits a job application, rather than each time they click on a job posting. While per-application fees may be higher than per-click fees, Indeed says the new model will make the hiring process 

The transition from a pay-per-click to a pay-per-application pricing model, which was first rolled out among smaller employers, initially threw some businesses for a loop, as it resulted in higher than expected charges, and additional legwork on the side of hiring managers, according to 

Raj Mukherjee, Indeed’s EVP and GM of employer product, admits the company is still ironing out kinks in the system. He told HR Brew he’s confident, however, that the pay-per-application model—or “pay for results,” as the company calls it—will deliver more value to HR and talent acquisition professionals in the long run.

Why Indeed is changing its pricing model. 

Mukherjee said Indeed’s new system is intended to make hiring smoother in a labor market that remains historically tight. While US job openings 

 from an all-time peak last year, available jobs still outnumbered unemployed Americans by a factor of more than 1.5 as of March 2023.

Today’s recruiting tools don’t make hiring easy, Mukherjee said. And while Indeed has long operated under a pay-per-click system, the company has heard from clients in recent years who want the job site to get them “closer to the hire,” according to Mukherjee.

Employers using the pay-per-application model won’t receive as many applications for open roles, Mukherjee explained, citing 

 that finds US employers using the new system receive 35% fewer applications compared to those using pay-per-click. Ideally, this smaller pool of applicants will be a better fit for the job, as a hiring manager has to review the candidate within 72 hours before paying for the application. Over time, Mukherjee said, Indeed’s system will learn more about an employer’s preferences, and send candidates that are a better fit—a process he calls “matching.”

The company made some changes in response to concerns from customers who saw surprise charges in the fall. Rather than migrating all accounts to pay-per-application right away, Indeed has kept both options open for now. US customers can now compare pricing side by side and choose between the two systems. Additionally, Indeed put a $1,000 price cap on each job posting if employers using pay-per-application don’t set it themselves.

 (52%) of employers surveyed by Indeed in February said they preferred the new model.

“We understand that not everyone is going to be happy or excited about these changes,” Mukherjee said. “It takes time both to educate the market, and to learn from the feedback and improve our experience…but we are seeing many clients be really, really happy with this new change.”

How this will affect employers’ recruiting strategy. 

Steven Rothberg, the founder of College Recruiter, a job site for college and university students, told HR Brew he believes the new pricing model will force employers to be more “metric-driven,” given they’re paying higher fees for each job application.

“You’re gonna see those hiring managers demanding of the HR people that those applications actually are worthwhile,” he said, given they won’t want “to spend money on something that doesn’t happen.”

Rothberg added that he expects to see more employers invest in recruitment marketing going forward as a result of this new system, to ensure quality candidates apply for their jobs.

At the same time, “There are going to be employers, for one reason or another, who are just never going to want to buy pay-per-application,” he said.

Kara Baskett, the co-founder and CEO of Monumental Talent, a professional search firm, said she pulled back on Indeed spending due to the new pricing model. Many of the employers she works with are small businesses with tight margins and high turnover. From a cost-per-hire basis, paying per application doesn’t often make sense, she said.

“If there is an hourly worker that’s only going out one day to work for eight hours, that doesn’t really make sense to spend potentially $25 for that application” because they’re likely not turning a profit that amounts to much more than that for the company, she said.

The good news for employers who don’t want to transition to a pay-per-application model, said Rothberg, is there are plenty of other job boards in the market—tens of thousands in the US alone, he estimated.

“Indeed is great for the vast majority of jobs and employers, but it’s not the only option,” he said.

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Why recruiting sites are downsizing, even as job openings remain historically high

What Indeed’s new pricing model means for recruiters

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