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
With only a few months remaining in the year, many job seekers in the tech industry are eager to put 2024 behind them. Rising financial costs driven by high interest rates have significantly slowed growth since 2022, leading to a more challenging job market. However, the recent decision in mid-September to cut interest rates offers hope that the tech sector could see a rebound in 2025, with improved conditions for both job seekers and companies looking to expand. The lower borrowing costs may reignite investment and hiring, creating a more favorable outlook for the year ahead.
Looking back at the performance of major sectors this quarter, demand for software developers has slowly rebounded, with 1,570 new jobs added over a three-month period. Consulting and engineering services have also seen modest growth, each contributing 830 new jobs. Meanwhile, growth in the scientific research sector has been more subdued, adding only 370 jobs based on a three-month moving average. The stronger-than-expected growth for software development is more than welcome, as job postings have fallen considerably from their peak in 2022.
Over the past year, growth rates across all major tech sectors have slowed. However, for the first time in many months, demand for software developers has reaccelerated, rising by 2.1% year-over-year. Engineering services has continued steady growth, with a modest 2.5% increase. In contrast, consulting and scientific research sectors are expanding at post-pandemic lows, with growth rates of just 1.2% and 1.5%, respectively.
Wage Trends
After several months of declining wage growth, there are signs of stabilization. Wages in both scientific research and engineering have ticked up to 1.9% and 2.8% year-over-year, respectively. Software development wages remain robust, growing at 4.6%, while consulting wages hold steady at a solid 2.6%.
Openings and Turnover Trends
In the technology sector, the trend of declining job openings appears to have reversed, with openings increasing to 4.5%. However, despite the rise in job openings, the overall rate of hiring activity has decreased (now at 2.4%) reflecting a broader slowdown in the labor market. At the same time, layoffs have gradually increased to 1.3%, matching the quits rate, which has stabilized at 1.3%.
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
Recruiting costs have begun to stabilize after a long period of cooling. Cost-per-clicks for science & technology are up to $0.90 and $1.01 respectively (three-month averages). Cost-per-applications fell slightly, down to $16.47 for science and $12.67 for technology.
Apply rates for tech jobs continue to rise, reaching a recent high of 8.3%, reflecting strong interest from job seekers in the technology sector. Similarly, apply rates in the science sector are nearing a peak, now at a rate of 5.6%.
Easy Apply
Similar to the stabilizing costs for traditional ATS benchmarks, easy or short apply methods have also been flat. The median cost-per-click for science jobs ticked down to $0.84 and tech’s CPCs dipped down to $0.79. Cost-per-applications have also stopped falling, now at $6.32 for science jobs and $3.50 for tech. As to explain why costs have stabilized: apply rates are no longer growing substantially for short apply methods: science jobs ticked down to 12.1% and tech jobs flat at 21.7%.
Recruitment Marketing Forecasts in Technology
Using Appcast’s weekly historical CPA data, Recruitonomics has created a two-quarter forecast of median cost-per-application for the technology sector. After a significant contraction in growth in 2024, recruiting costs may lift as the Fed reduces rates and competition picks up.
What does this mean for technology?
As 2024 comes to a close, the tech industry has faced significant challenges, with high interest rates and rising financial costs leading to slow growth and fewer job opportunities. However, the recent decision to cut interest rates in mid-September provides a more optimistic outlook for 2025, as the sector may see renewed investment and hiring activity.
Recruitment costs have begun to stabilize, and a modest growth in cost-per-applications (CPAs) is projected for 2025, suggesting a potential recovery in the tech sector. However, stalling apply rates indicate that while recruiters may have found it easier to fill roles compared to the hiring surge of 2021, this trend could be reversing. As competition for tech talent intensifies once again, recruiters may face increasing challenges in filling positions.
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.
