After adding over 400,000 jobs per month on average in 2022, job growth declined to just 199,000 in November 2023. And while the unemployment rate remains low at 3.7%, economists predict it may start creeping up in 2024 as economic growth stagnates. There are already signs that the red-hot labor market is losing steam as recession fears mount.
Challenges and Opportunities for Hiring
For commercial banks, the cooling job market brings both challenges and opportunities when it comes to hiring. On the one hand, they may face less competition from other high-growth industries like tech that have been able to easily poach top banking talent with big pay packages and promotions. But on the other hand, desired candidates in fields like finance and accounting may be less inclined to switch roles or even enter the job market during more uncertain economic times.
While layoffs haven’t hit the banking sector yet, some have imposed hiring freezes until the outlook improves. This means losing out on their hiring capabilities despite an improving applicant pool.
More Selectivity in Hiring
The slowing demand for labor is already allowing employers to be more selective in evaluating talent. The number of job openings in the United States decreased to 8.73 million in October 2023, which was a decline of 617,000 or 6.6% from the previous month. This was the lowest level since March 2021. For commercial banks, this means they can afford to be choosy and patient with making the right match.
They can implement more rigorous screening processes for roles like finance managers, loan officers and operational staff. This may involve additional interviews, skills assessments, and even recruiting existing employee referrals rather than external candidates.
Adapting Hiring Strategies
Commercial banks specifically need to adapt their hiring practices to attract top talent, even as application volumes increase. Strategies could include boosting benefits packages, allowing more workplace flexibility options, and highlighting overall job security within the banking sector. Compensation may also need to keep pace with inflation to beat out competition.
Catering to Younger Generations
While the Great Resignation frenzy seems to be over for now, workers still have leverage in this economy in many cases. The banking sector needs to position itself as an attractive place to build a long-term career, especially for younger generations like Millennials and Gen Z entering the workforce. These groups prioritize things like purpose-driven work, flexibility, remote options and professional development. Banks that don’t cater to these expectations may struggle to compete for talent.
Staying Resilient in Recruiting
The cooling job market has upsides and downsides for commercial bank hiring. With the right strategies, they can secure top talent without overspending. But it will take resilience and adaptation in their recruiting playbooks to succeed. Banks that can position themselves as stable, secure and desirable career destinations will fare best uncertain waters ahead. Standing out will require making the most of the current hiring market conditions wherever possible.