Economy-wide breakdown
- The third quarter of 2024 saw a continuation of the slowing job market trend, with lower job growth and rising unemployment. Both July and August’s initial reports fell short of market expectations, heightening concerns about a potential labor market recession. However, September’s stronger-than-expected gain of 254,000 jobs has alleviated some of those fears. Still, the broader narrative remains: the labor market is growing at a slower pace compared to the first two quarters of the year.
- Unemployment gradually increased this quarter, driven primarily by an influx of new workers entering or returning to the workforce, rather than by job losses. The overall rate of hiring activity has significantly declined, near 2013 levels as workers are quitting far less resulting in a low turnover environment.
- Wage growth continues to decelerate, now below 4% and trending towards 3.5%.
- Inflation has continued to cool, and amid growing concerns about a weakening labor market, the Federal Reserve cut interest rates by 50 basis points in September. This move signals the central bank has confidence that inflation is on track to reach the 2% target and fears that current monetary policy is too restrictive and requires easing to boost employer demand for hiring.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
The healthcare and social assistance sector has been flying high for the past two years but experienced some cloudy skies this past quarter. The sector grew strongly compared to other sectors in the labor market, yes, but growth was more subdued than we’ve become used to in the past two years. In August, the sector added the fewest jobs month over month since March 2022; Even the healthcare powerhouse was not able to escape the overall slowdown in the labor market. In September though, growth rebounded in the labor market and in healthcare too, and the sector added 71,000 net new jobs.
Among subsectors, social assistance experienced the largest month-over-month gains, adding 26,000 net new jobs in September. Ambulatory and health services made impressive gains of 24,300, while hospitals added 11,500 and nursing homes added 9,400.
Year-over-year growth in subsectors has flattened, showing how healthcare is still steadily adding jobs despite the slowdown. Hospitals, ambulatory and health services, and nursing homes all grew at a rate of around 4% throughout the third quarter, while social assistance grew at a rate of 5.4%.
Wage Trends
Over the past two years, wage growth has decelerated and flattened for workers in the healthcare sector. During the hiring craze of 2022, wages grew in a frenzy as companies were desperate to hire for whatever they could. Now, as demand has softened (even in healthcare), wage growth has returned to more “normal” levels across subsectors.
Openings and Turnover Trends
The frantic demand of post-pandemic hiring has disappeared, but recruiters are still working with stronger hiring expectations than before the pandemic. In April of 2022, job opening levels were 90% higher than in February 2020. Now, the level is just 29% higher – still an aggressive hiring market, but one that certainly feels more manageable for companies. In other areas of turnover, there is little change to report on. Quits remain elevated compared to norms in other sectors, and ultra-low layoffs confirm that companies are not about to turn away the talent they currently have.
Recruitment Marketing Trends
The term “long” or “ATS apply” refers to the conventional application process, requiring applicants to manually submit their tailored application documents and personal details through the company’s website or an applicant tracking system (ATS). In many cases, applicants are required to create a company-specific account.
On the other hand, “easy apply” refers to a swift application process on a job board, often conducted through a smartphone. With a single click, essential information like the resume is transmitted directly to the company. Due to the simplicity of this application method, easy-apply metrics are not directly comparable to those of the “long” or “ATS apply”. The metrics are therefore presented separately.
Long Apply
Healthcare recruiting costs continue to be some of the highest among sectors but have fallen with demand in recent years. Cost-per-clicks are hovering around $1.18, rising slightly in the last few months. Apply rates, on the other hand, have been on an upward trend in the last year and have plateaued around 3.5%. This is still a relatively low apply rate compared to other industries, which contributes to the high cost-per-applications we see. CPAs have leveled out below $30 in the healthcare industry this year. Compared to other industries, these benchmarks are elevated but in context of the last couple of years of recruiting in healthcare, they are far more manageable.
Easy Apply
Easy-apply metrics are consistently lower than their long-apply counterparts, and that holds true in the healthcare sector as well. CPCs have slowly been rising in the sector, now around $1.85 over the three-month period ending in September. Apply rates are low compared to other industries’ and have flattened at 11.9%. Finally, easy-apply CPAs rose throughout the last quarter, ending in September at just half of the cost of long-apply CPAs.
Recruiting Marketing Forecasts
Using Appcast’s weekly historical CPA data, Recruitonomics has created a two-quarter forecast of median cost-per-application for the healthcare sector. CPAs are expected to decrease in the upcoming six months and return to levels seen in the first quarter of 2024.
What does this mean for healthcare?
Healthcare hiring has stabilized at a higher level than pre-pandemic as the labor market calms overall. This translates to a still-difficult recruiting environment, as evidenced by stubbornly high costs. This is a sector that continues to grow and will likely be a hiring epicenter for years to come, as the population ages and demand for services rises. Even if the wider labor market cools significantly, the healthcare sector will likely continue to face shortages in key positions, as supply will struggle to keep up with demand.
Forecasting Methodology
Cost-per-application (CPA) is forecasted two quarters ahead using the previous two years’ worth of one-month moving average data. A combination of ARIMA, exponential smoothing, and seasonal naïve models are used to create an ensemble forecast. The forecast provides both the 95th percentile confidence intervals, indicating the likelihood that each value will be within the CPA range provided.
