New data from Indeed confirms what many feds are feeling about the job market

Terry Gerton So Indeed has a new report out that looks specifically at the federal sector and the employment market. Let me let you start by giving us sort of the highlight.

Cory Stahle The highlight here is unsurprisingly, a lot of the DOGE actions that we saw early in the year are starting to show up in the data. So if we look at the Indeed data, specifically at job applications coming from federal workers, we see some pretty pronounced trends. Most specifically, we see those trends and a huge spike coming from people who are working in agencies that have been targeted by DOGE or are under DOGE review. If we look from January through April, applications have surged by 150%. We’ve seen a little bit of cooling down in the month of May and we’ll have to see where it goes in the coming months, but really, really noticeable. If we look back to previous presidential administrations, we go through the history of the last eight, 10 years, this is something that’s truly unprecedented. Which tells us this is a clear reaction to the cuts, efforts to reduce the federal headcount and other federal spending.

Terry Gerton Your right, that’s not terribly surprising, but I’m just wondering as sort of a data geek, how do you identify the people in Indeed’s database as federal employees?

Cory Stahle Indeed, you know, oftentimes people think about all of the job postings that we have, right? It’s a good place to come to find jobs. But because we have a lot of people coming to our platform, they’re also using our platform to build out profiles and to provide resumes. And so to do this analysis, we use that profile resume data, and we’ve got millions, tens of millions of resumes and profiles to look at. And we were able to see what employers those different people were working for; more specifically in this case, for federal employers. I would just throw out, just as a side note before anybody gets too afraid about data privacy, Indeed isn’t going in and saying, hey, Terry, this is your exact resume. We do a lot of work for data privacy. As the researcher, by the time I see the data, I don’t see names or addresses or anything like that. I’m just able to see this person worked for these different employers. And so we do a lot of work to make sure that things are staying anonymous, but also detailed enough that we can do this type of analysis.

Terry Gerton That’s really helpful. And I’m also wondering, you know, the agencies that DOGE targeted right away — USAID, NIH, some of those — a number of these people I suspect have very specialized job skills. Are you noticing any trends in the relationship maybe between their skills as an aid specialist or as a medical technician to the kinds of jobs that they’re seeking?

Cory Stahle We’ve definitely seen a surge in specialized workers. I think at a broader level, one of the most telling things is that if we look to the federal workers who were looking for jobs last year, about half of them had a bachelor’s degree or above. But this year, it’s about 70%. That represents a huge shift. It’s not that all the federal workers now just went out and got degrees. It’s that the type of worker that’s looking this year is very different, much more educated than last year. But beyond that, we are seeing growing movement of very specialized workers looking. In this recent report, we didn’t necessarily look at it, but a few months ago we published a similar report that was looking at the types of jobs that these workers were looking for. And interestingly enough…one of the fastest-growing search terms on our platform coming from federal workers was “horticulturist”. So we saw the USDA cuts were showing up, the people with these horticulture skills were very clearly coming and saying, let’s see what horticulturist jobs I can find on Indeed. And so we very much see that as we go down the list. You see that a lot of the compliance jobs that you find like in CFPB, you see a lot the human resource employee relations type of jobs showing up after the cuts to DEI and the peeling back of DEI measures. Those are all very clearly showing up in these workers with specialty skills looking for jobs on our platform.

Terry Gerton I’m speaking with Cory Stahle. He’s a senior economist at the Indeed Hiring Lab. So one of the typical landing spots for federal employees who depart federal civil service is going to be as a government contractor. What is the data telling you about what’s happening with the contracting workforce and the contracting employers?

Cory Stahle This is a really interesting thing, right? Because I think a lot of the attention has been paid to the immediate, primary federal workers as part of DOGE’s efforts. But another big piece of what DOGE and the administration has done is said, hey, we’re going to also cut federal spending in general. And so when we look at the Indeed data, what we’re seeing is that that’s having impacts in scientific research jobs. We’ve seen those pull back. But then more recently, we’ve started looking into how that’s impacting employers who depend on that federal funding. And what we saw in this recent report was that if we look at the top 25 employers who received the highest amounts of money from the government, we see that their demand for workers right now is very different than in the rest of the labor market. So from January 20th, the day of the inauguration, through basically the end of May, what we see is that for these federal contractors who depend on that funding, that their job postings have pulled back by 15%. Now you compare that to everybody else, all the other companies, they’ve only pulled back by about half a percent, right? So you’ve got 15% drop versus a one-half percent drop. Clearly, there’s a big difference that that federal funding is making in terms of the people that they’re looking to hire in the coming months.

Terry Gerton So a lot more supply of highly qualified, interested workers and a lot less demand. That makes for a tough employment market.

Cory Stahle It certainly does. We look at the contractors here – obviously those would be natural landing spots for many of these federal workers. They’re familiar with the processes in many cases, with the type of work these people are doing and these companies are doing. And now some of those opportunities are drying up because of the cuts to funding. And then if we look even beyond that, we see a similar pattern in the rest of the economy in terms of things are holding up pretty well overall, but even within the broader labor markets, there’s a pretty clear difference in the types of jobs available. We see that health care jobs are pretty abundant. If you’re leaving the VA as a federal worker, you’re probably in pretty good shoes. You know you can find nursing jobs in the private sector. But if you’re a software developer and you are trying to go from a job working for the Department of Defense to working in a private software position, software development jobs, there’s about 40% fewer of them now than there were before the pandemic. Not only the contractors are limiting the supply, but just in general, there’s just fewer opportunities for white collar knowledge workers right now.

Terry Gerton Are you able in your data to see geographic trends? Are there particular areas of the country where the market might be more open to relocating federal workers?

Cory Stahle We are able to track that. Typically we look at job postings at a state level or at a metropolitan level. And I think what’s interesting is when we start diving into that data, there’s very clearly trends that if you look at the tech centers, the tech hubs, a lot of these kinds of knowledge worker hubs, they’ve pulled back a lot more dramatically in their demand. You know, you look at the Seattles, the San Franciscos of the U.S. and they very much have a lot fewer job opportunities than they did a few years ago, whereas interestingly enough, you look at some similar sized hubs, you know, you see they’re like, there is a little more demand in places like Denver or Phoenix. They maybe have a little bit more of a diversified labor market. So there are opportunities out there, but right now, by and large, the story across the U.S. Is that if you’re in healthcare or a skilled trade, there’s quite a few opportunities if you’re in marketing or data analytics or software development. There’s still opportunities, but there’s a lot fewer opportunities than there were a few years ago. And you might have to expect that your job search is going to be a little more difficult.

Terry Gerton So all of the things you’re just talking about seem to me to be just multiplied in complexity by the deployment of artificial intelligence as it’s upending the job market in one way, but also changing HR practices in another. So when you look at all of this data overall, what advice would you have for federal workers who now are in need of a job? Where might they start?

Cory Stahle It’s going to be very individual…based on the skills, based on the education that you have. I do think that, again, there are fewer white collar, knowledge worker type jobs available. Again, it doesn’t mean that there aren’t. You know, if there is a good fit, certainly don’t let anything I say, you now, stop you from going out and finding the right fit. But I do you think that especially as we talk about artificial intelligence, to some degree, it’s been a little bit overblown as to the impacts because a lot of the knowledge worker trends I’m talking about predated the rise of the household popularity of the ChatGPTs of the world. AI is certainly changing the labor market and going to change the labor market going forward, but right now, there’s a broader economic story that’s playing out. So just realize that we are in this market economy where things tend to go down, they tend to come back up. As we start to look towards, okay, well, where are opportunities going to come back up in the future? I think AI is an important part of that. So right now could be a good opportunity if you’re looking at pivoting in your career right now, maybe you’re like, well I don’t really want to go from working in software to being a nurse, but maybe now is a good time to say, hey, but let’s start investing in some of these AI skills because businesses are saying that’s where they want to grow their workforces where they’re looking for people. So, investing in skills, continuing to develop yourself, that’s going to open up a lot of doors. That’s why all of this data is so important – because it can help to see where the current demand is, and it can also show in a longer term that yes, things go down, but they tend to come back up. We tend to see an up and down wave. And so, careers are really built over the course of decades, not a couple of years. So thinking kind of that broader term, where are things going five years, 10 years from now?