Job applications are far outpacing job openings – Quartz

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Job applications were more than quadruple the pace of employer hiring in the first half of 2024, as the labor market continues to show signs of cooling.

Hiring demand, as measured by job requisitions, was up by 7% in the first six months of the year compared with a year earlier, according to a report from cloud-based human resources and hiring site Workday released Tuesday. During that same period, job applications jumped 31% — more than four times the number of requisitions, when a manager creates a new position or looks to fill an open role at a company.

While a hot labor market kept much of the power in workers’ hands last year, the Federal Reserve’s inflation-fighting efforts have dampened much of the fire under the labor market. U.S. employers added roughly 142,000 jobs last month, up from a troubling revised 89,000 in July, according to data released Friday by the Bureau of Labor Statistics.

At the same time, unemployment ticked down to 4.2%, from a high of 4.3% a month earlier. But that’s still a second straight month of an unemployment rate higher than the 4.1% maximum projected by the Fed.

“With the pace of applications outpacing hiring demand … it’s clear that employers have more power and employees have fewer choices,” Workday said in its report. “This situation could become more pronounced if job growth slows down or unemployment edges up in the U.S. and globally.”

This shift of power back into employers’ hands has created new challenges for people seeking jobs. Workday found that 72% of leaders have raised the bar for qualifications and experience requirements as they try to mitigate the influx of applicants and create a more competitive hiring process — and have seen a positive impact from higher experience requirements in the past year.

Workday customers processed nearly one-third of all U.S. job openings per month in the first half of 2024, according to BLS data.

The role of AI and ML

When it comes to managing the flood of applicants, employers are using artificial intelligence and other machine learning to sift through applications. Only 16% of companies surveyed are not currently using these technologies.

The top uses for AI in hiring include assessing candidate skills through online tests, screening resumes and cover letters, and automating repetitive tasks, according to the report. This makes for a faster, more streamlined hiring process, with 89% of respondents saying that they expect their company to make either moderate or major efficiency gains from using AI and ML tools for hiring.

The use of these tools in hiring has raised concerns about discrimination and biases that may go unchecked in the systems’ algorithms. Some regulators have sought to combat these fears. In New York City, for example, the Department of Consumer and Worker Protection began enforcing a law aimed squarely at AI bias in the workplace. The law, which went into effect in July 2023, requires more transparency from employers that use AI and algorithmic tools to make hiring and promotion decisions, and mandates that companies undergo annual audits for potential bias inside the machine.