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Why Job Growth is Treading Water

Economist Andrew Flowers from Appcast discusses the slowing US job market, describing it as 'treading water'. He analyzes recent employment data, labor force participation trends, quit rates, and the impact on recruiting and talent acquisition in various sectors.

The US labor market is currently in a state of 'treading water', according to economist Andrew Flowers. In a recent interview, Flowers, the chief economist for AppCast, provided an in-depth analysis of the current job market, highlighting key trends and their implications for employers, recruiters, and the broader economy.

Flowers began by explaining the concept of 'treading water' in the context of job growth. He pointed out that while the addition of 139,000 jobs in May might seem acceptable on the surface, it actually represents the weakest level of job growth in over 13 years. The average monthly gains are now at their lowest since late 2011, signaling a significant slowdown in the labor market.

Diving deeper into the numbers, Flowers emphasized the importance of looking beyond the headline figures. He noted that the foundations of the recent job growth numbers are weaker than they appear, due to the concentration of growth in a few industries and downward revisions to prior months' data. This suggests that the labor market's engine may have some underlying issues that aren't immediately apparent.

One of the key points Flowers highlighted was the narrowing base of job growth across industries. He explained that the job market has been primarily driven by three sectors in recent years: healthcare, leisure and hospitality, and government. However, this foundation is now shrinking, with government jobs, particularly at the federal level, showing declines in recent months.

Healthcare remains a strong pillar of job growth, accounting for over a third of all job growth in the last two years. Leisure and hospitality have also been significant contributors as the sector continues to recover from the pandemic-induced downturn. However, Flowers expressed concern about the sustainability of growth in these sectors, citing potential impacts from tariff policies and changes in consumer spending patterns.

The economist also discussed the concept of the 'diffusion index', which measures the proportion of industries adding jobs versus those shrinking. He noted that this index has reached its lowest point in the current cycle, indicating that job growth is becoming increasingly concentrated in fewer industries.

Turning to labor force participation, Flowers explained that the rate for prime-age workers (25-54 years old) has slipped to 83.4%. While this is still higher than pre-COVID levels, it represents a decline from recent peaks. He attributed the post-COVID increase in labor force participation to two main groups: prime-age women, whose participation is at an all-time high, and foreign-born workers.

However, Flowers expressed concern about the future trajectory of labor force participation, particularly in light of potential changes to immigration policies. He suggested that restrictions on immigration could lead to a shrinking talent pool, posing challenges for recruiters and talent acquisition professionals even if the economy weakens.

The conversation then shifted to quit rates, which have seen a significant change from the 'Great Resignation' period of 2021-2022. Flowers described the current situation as the 'Great Stay', with quit rates now lower than pre-COVID levels. This indicates that workers are less inclined to leave their current jobs, possibly due to concerns about the future economic outlook.

Interestingly, Flowers pointed out that hire rates are also at their lowest point in over a decade. This has created a somewhat frozen labor market, where employers are neither hiring nor firing much, and job seekers are staying put. He noted that roughly two-thirds of all hiring in the US is done to backfill positions where someone has left, rather than to create new positions.

Regarding the impact on job advertising and programmatic recruitment, Flowers suggested that the weakening job market could lead to a dip in recruiting costs. He explained that AppCast's data-driven approach to job distribution and optimization is well-suited to navigate the current environment of high uncertainty, as it can identify talent gaps and mismatches between demand and supply for specific roles in specific markets.

Flowers also addressed the surge in job applications that many employers are experiencing. He attributed this to two main factors: the difficulty new entrants to the job market face in finding employment, leading them to apply to more positions, and the rise of generative AI tools that enable job seekers to apply to multiple positions at scale.

Looking ahead, Flowers discussed the potential for 'peak staffing' in various industries. He noted that job postings for HR roles and other 'white-collar' or 'sitting down' jobs are significantly down compared to pre-COVID levels. While some of this may be due to increased efficiency and automation, Flowers primarily attributed it to the overall depression in white-collar hiring due to high interest rates.

However, he expressed optimism that these roles would eventually rebound when interest rates begin to decline. He emphasized that the current focus on hiring for 'standing up' jobs in sectors like healthcare, leisure and hospitality, and construction is largely due to the immediate return on investment these roles provide in a high-interest-rate environment.

In conclusion, Flowers painted a picture of a job market that is indeed 'treading water' - not drowning, but certainly facing challenges. The concentration of job growth in fewer sectors, the decline in labor force participation, and the frozen state of the job market all point to a period of transition and uncertainty. For recruiters and talent acquisition professionals, this environment demands adaptability, data-driven strategies, and a keen understanding of the evolving dynamics of the labor market.

As the economy continues to navigate these choppy waters, it will be crucial for employers and job seekers alike to stay informed about these trends and adjust their strategies accordingly. The insights provided by economists like Andrew Flowers offer valuable guidance for those looking to make sense of the complex and ever-changing landscape of the US job market.



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Unleash 2025 Vendor Interviews

As I walked the floor at Unlash in Vegas I hit up a few vendors. In order of appearance;

  1. iSolved: new integration of ApplicantPro

  2. Anthropos: immersive Ai simulations

  3. Curately: Ai interviewing tool

  4. Hirebrain: hiring manager software

  5. HR Bench: people analytics

  6. Nectar: recognition & rewards

  7. Paradox: conversational Ai

  8. Sense: voice Ai and more

  9. Vizzy: early career resume platform

Unleash America was held at Caesars Forum as usual.



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HireEZ's new Agentic AI Features

HireEZ just introduced its new Agentic AI, and is transforming into a more all-in-one recruiting platform. The software now automates sourcing, screening, outreach, scheduling, and analytics. Joining me in this episode to discuss the news is their CEO Steven Jiang.

TOPICS

  1. Whats the buzz been like since the new product launch?

  2. Whats the strategy behind the product evolution…you started out strictly as a sourcing tool, now you've added things like CRM capabilities and job posting pages.

  3. Describe the new functionality you launched last week…(sourcing agents, job pages/landing pages, agent apply)

  4. Whats your favorite feature

  5. As far as the sourcing capabilities go, I talked to a few of your clients last week who said they did not renew their Linkedin contracts…how many profiles do you have now and why is HireEZ better than LI?

  6. What do clients ask you about the futr of recruing

  7. Whats the biggest challenge for HireEZ right now?



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Bullhorn's 2025 Industry Trends Report

Audio Version | Subscribe

Lia Taniguchi is the Senior Research Manager at Bullhorn, where she leads market research initiatives to provide actionable insights that inform business strategy and keep the company at the forefront of industry trends.  Get the report.

TOPICS

  • Whats new at Bullhorn? Everytime i see the news wires you guys are buying some sort of recruiting software…

  • Its a very jekyll and hyde labor market how ae staffing firms fairing in this “uncertain” environment?

  • Whats the biggest takeaway from the report?

  • The report highlights that staffing firms using AI were twice as likely to have increased revenue last year. What specific aspects of AI adoption are driving this revenue growth?

  • Bullhorn’s GRID 2025 Industry Trends Report indicates that AI and automation can save recruiters up to 17 hours per week. How does this translate into improved efficiency and business outcomes for staffing firms?

  • Search and match agents are cited as the top AI tool for improving productivity. Talk more about how these agents enhance the recruitment process and what makes them a game-changer?

  • With 80% of candidates wanting to be placed in less than 20 days, how are AI-driven automation and screening tools helping firms meet this expectation?

  • What best practices should firms follow to successfully integrate AI into their recruitment strategies?



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Debrief of I AM PHENOM with Tim Sackett

Tim Sackett and I discuss the conference along with Phenom’s new agentic AI offerings.

MY NOTES FROM ANALYST DAY

AI Agents

  • “We always believed AI agents are the future of AI” - Phenom CEO

  • Phenom is the ‘applied AI for the HR domain’

  • Phenom has 25 new AI agents

  • Experience agents for each stakeholder….candidates, recruiters, employees, hiring mgr

  • Persona agents: intake, onboarding, etc

  • Agent creation is like a good manager who knows what to delegate and when

  • Agents in Candidate Experience: text msg to jake who attended a pervious hiring event it reminded him and created a personalized job landing page as call to action

    • Search assistant: Agent can summarize a role for a prospective candidate

    • Scheduling: select interview time, checks on times, checks with hiring mgr,  will email u in an hour.

  • Agents in Recruiter experience: new recruiter dashboard to keep each recruiter informed

    • X+ will find active candidates in the CRM

    • Without x+ recruiter has to spend time searching

    • Agent can manage the sourcing completely

    • Dashboard shows response rates, interested candidates, unresponsive, etc

    • Intake discussion guide provided to recruiter

    • Agent contacts hiring mgr over Teams, and conducts the intake (recruiter in the loop)

    • Surfaces top candidates and can schedule the interview

  • X+ Agent Studio- how they are created (think of agents as new team members) “the factory for building ai agents (low code/nocode)

    • Looks like a workflow dashboard (if this then that)

    • Can create thru conversational interface, voice, inline…

    • Prebuilt agents in the studio, 

  • Talent Experience Engine for talent marketers

    • Insights and intelligence for your review

    • Content creation: LLM is trained on your voice/brand

    • Segments is the heart/game changer - automatically created talent pools

      • Rengaged candidates, industry leaders, high activity seekers, passive competitor talent etc

      • Journeys - how people consume that content

      • Agents in the TXE

      • Content curator agent creates compelling content to attract talent

      • AutoNurture agent manages campaigns to attract talent

      • For ex it can create a new campaign for a new country expansion Landing pgs, campaigns, seo

      • Day to day stuff: nurturing is a big use case

      • Adobe Express now integrated into Phenom, create stunning content with ease

  • Hiring Intelligence

    • X+ screening screen, schedule, interview

    • 30% reduction in time to hire

    • Screening: ex 317 applicants, need a way to sort these candidates—deploy a voice agent to make the calls for recruiter – she approves workflow – virtual recruiter agent calls candidate to do a brief screening call – saves 1.5 days in the screening process – 

    • Interview Fraud agent can detect candidate use of LLM on calls, face match, voice match

  • Hiring Automations

    • Screening questions segments into groups ‘highly quantified, unqualified, etc”

    • Assessment

    • Only best fit candidates can schedule interview

    • Thermo Fisher 5k automated interviews scheduled, reduced time to fill by 54%, 7 min avg time from application to interview scheduled

    • Elara Caring: 83% completed interviews, 3x increase in monthly volume, 13,000 automated workflows completed already in 2025

    • They reassigned recruiters to more high level tasks

    • Hiring mgr mobile app coming out

Agentic Automations 

  • Candidate can use natural language to search for a job

  • Agent can step in and offer other job suggestions

Agents in the Recruiter Manager Experience

  • Phenom rec mgmt dashboard

  • Suggest ways to optimize

  • Overview of team performance

  • Shows how many agents each recruiter has employed

  • Mgr can coach the agents to get better results

Agents in Onboarding

  • First ever agentic onboarding product

  • Compliance burden, impersonal experience

  • Whats new: Automated compliance, personalized engagement for new hires

  • Onboarding dashboard….each candidate has a profile with all the steps needed to onboard you can see the progress, all forms are stored here….

  • Journeys for onboarding available.

  • A lot of the data can be pre-filled in for candidate based on his/her job application

Employee experience also has agents…feedback, check ins etc

Analyst Day

  • 2500 attendees at IAMPHENOM 2025

  • Customer: sophisticated product, took a while to work out 1+ years to really , rolled out 20% adoption, 3 years to 93% adoption….did not reduce headcount in TA after implementing Phenom…found “Change Champions” in diff regions to help get use up of Phenom among user base…recruiters are becoming more ‘talent marketers’

  • One customer says phenom is doing a better job at taking customer suggestions

  • Head of TA said he Wants a “meta agent” to tell him how to manage all the agents! Getting very sophisticated

  • AT Unleash and HR tech events they will be teaching ppl about how AI agents work

  • Net promoter score is now at 15, shooting for 20 this year

  • The Phenom Credential…professionalizing Phenom

  • Held a “Customer Obsession Day” .. customers were saying they weren't prepared enough for the implementation journey…. biggest problems implementation, data migration etc.

  • As product gets more sophisticated, customer care’s job gets more challenging



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Jason Putnam is the New CEO at Vetty

Jason Putnam is the newly announced CEO for Vetty, a background and screening company based in New York. The appointment marks a new phase in Vetty’s continued expansion, and according to the press release, Putnam will set the strategic vision and direction for the next chapter of the company.

TOPICS DISCUSSED

  1. So why Vetty?

  2. What is Vettys product lineup today?

  3. You steadily climbed the ladder in HR tech, what about those past roles prepared you for this journey?

  4. Go to market advice…lots of noise out there

  5. Whats next? are you moving into other parts of the hiring process?

  6. Is AI going to weave itself into screening and onboarding?

  7. Biggest challenge for you in your new role?

  8. Biggest challenge for Vetty in 2025?

RecTech is proudly sponsored by Dalia and Jobcase…



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Upwage Pioneering the AI Interview

Diana Tsai is the CEO and co-founder at Upwage.com an agentic AI interview tool. Today we’re going to talk about this next generation of recruitment tech, educate you on Agentic AI and learn more about Upwage. (40 min audio)

Sign up for the free Agentic AI Crash Course

TOPICS DISCUSSED

  1. Define Agentic AI for recruiting…

  2. What does Upwage do?

  3. Implementation of AI interviewing

  4. How exactly does AI-powered screening and matching directly impact retention?

  5. How does Upwage’s AI ensure candidates are not just hired faster but also stay longer?

  6. You’ve shared specific case studies showing turnover reductions as high as 48% in some sectors. What are the biggest drivers of these improvements?

  7. Example of questions the agents can ask?

  8. Hiring managers often struggle with predicting long-term candidate success. What signals does Upwage AI identify that human recruiters might overlook?

  9. Whats the biggest roadblock potential clients tell you about implement AI based interviewing and how do you typically overcome that objection?

  10. Turnover is expensive…What’s your response to skeptics who doubt that AI can fundamentally change retention rates?

  11. Prospect asked how do we screen for DNA (company culture) Upwage can do that?

  12. Looking ahead, how do you see AI evolving in the talent acquisition space?

  13. The long term roadmap for Upwage.



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Kendra Cato Talks Staffing Technology

Kendra Cato is Director of Strategic Partnerships at Advance Partners, a funding and strategic services company for the staffing industry…Today we’ll talk about how technology is transforming today’s staffing agencies.

  • What is your role at Advance Partners? You worked for bullhorn?

  • State of staffing….how are staffing owners feeling

  • What are the biggest tech trends transforming the staffing industry and how?

  • What challenges and opportunities does AI automation bring to the staffing industry?

  • How do firms navigate the complexities of DE&I staffing in today’s environment? 

  • How do AI-driven tools and data analytics support inclusive hiring and diverse talent pipelines?

  • How can smaller staffing firms differentiate themselves to drive growth?

  • How is technology enhancing – or not enhancing – relationship-building among recruiters, candidates and clients.

  • How do u stay on top of staffing industry?

  • Fav AI tool?

  • You’ve had an interesting career path. What are some of the most important lessons you’ve learned along the way? How are they being applied in your work in the staffing industry?



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Kirby Cole Talks Recruiting & Technology

Kirby Cole is the Vice President, of Talent Acquisition and Doctor Services for St Louis based Eyecare Partners… they operate a national network of eye care locations that provide vision care services. The company employs over 8700 people.

TOPICS DISCUSSED ON THE PODCATS

  1. Its a new year, what are your hiring plans for 2025? (what kind of jobs and how many hires)

  2. Whats your biggest hiring challenge right now?

  3. Biggest TA win in 2024?

  4. Describe your HR tech stack

  5. What’s one thing from a tech standpoint you want to address this year?

  6. Seeing a lot of AI resumes?

  7. If I asked you to describe your employer brand what would you say?

  8. Most memorable candidate story from 2024?

  9. Best part about your job?



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Erin Generated 1.1 Million Referrals in 2024

A new white paper from ERIN showcases how employees across industries engage with referral programs through mobile, email, and social platforms. 

The data provides actionable insights to enhance enterprise recruitment strategies, emphasizing mobile optimization, recognition programs, and tailored engagement tools.

TOPICS IN THE POD

  1. Is this the first time you've published this data? Its almost like a report on your entire business…

  2. What were ERIN's key 2024 data points that served as the basis for the white paper findings?

  3. What did you learn are the top methods of engagement with employee referrals? Email, social, text, device type?  

  4. What is the success rate of leveraging ERIN, in terms of candidate responses, # of hires, referral payouts, and other key metrics?

  5. Talk us through the average employee user experience with ERIN, based on what this white paper revealed about how they're engaging with the platform.

  6. The white paper addresses how various industries and countries respond to employee referrals. Talk us through those findings.

  7. What's your message to companies that haven't yet bought into the idea of leaning heavier on employee referrals as part of their recruitment process? 

  8. Where can we find Erin in 25 (conferences)?



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