Goldman Sachs says companies are getting better at hiring - and doing less of it

"Most of the pullback in churn reflects a decline in job separations within one or two quarters after hiring, a pattern that suggests that workers and firms have gotten better at identifying 'good' matches over time. Historically, short-term separations have been common because some hires turn out to be poor matches between employers and workers."

"In our opinion, the best explanation of the decline in short-term separations is that increased information and improved screening processes have increased both firms' and workers' ability to identify 'good' matches. Platforms such as LinkedIn, Glassdoor, and Indeed give workers insight into company culture and working conditions before they accept a role."

Hiring has slowed across advanced economies, but this decline reflects improved matching between workers and employers rather than labor market weakness. Short-term job separations—workers leaving or losing jobs within one to two quarters of hiring—have steadily decreased over two decades, accelerating after the pandemic. This pattern indicates both firms and workers are better at identifying compatible matches from the start. The decline spans multiple industries and represents a structural shift in how job matches form. Increased information access through platforms like LinkedIn and Glassdoor, combined with improved screening processes and AI tools, enables employers and workers to make better hiring decisions upfront, reducing costly early exits and labor market churn.

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