Shifting Priorities: From Candidate Volume to Applicant Quality

Imbalance in the Labor Market

From the post-pandemic labor market of 2020 until early 2024, the economy of the United States had some of its strongest growth of the generation. In this growth environment—motivated in part by historically low interest rates; the U.S. federal funds rate was essentially zero from early 2020 to early 2022—labor demand across most industries was very high. Individuals were returning to this healthy labor market in steady numbers, as the U.S. labor force participation inched up from around 61% to a peak of roughly 63%, but this increase in the supply of labor was still not matching the steep increase in demand from employers, leaving an imbalance that put pressure on organizations to find new ways to attract candidates.

Much of the economic and business news of that time centered around wage growth, job switchers, and—maybe most of all—“quiet quitting,” with the assumption that because workers had so many options to choose from, they had weak ties to their current jobs and could demand higher wages and benefits from their employers or otherwise easily find them in the job market.

Recruitment teams faced similar challenges to company leadership, and these teams had to sweeten offers to candidates to entice them to come on board. The easiest way to source for workers is obviously to offer salaries and benefits that beat the competition. But while compensation increased at most companies—if for no other reason than for wages to keep up with high inflation—some organizations could offer more than others. Companies with high wages and strong employer brands will always attract candidates. Most companies, however, need help building up a strong candidate pool when market conditions are working against them. Some talent acquisition technologies are designed to do just that.

Candidate Volume Was the Top Priority in Talent Acquisition

From 2020 to 2024, perhaps the biggest challenge we at TTL saw in talent acquisition was for recruitment teams to increase candidate volume. There were too many jobs for the number of applicants, particularly for high-volume hiring organizations. In times like that, our conversations with clients tend to revolve around what tools can help them find candidates that their competitors can’t. What types of tools were available to bring candidates that weren’t already scrolling through Indeed or LinkedIn?

We were talking about programmatic advertising, which spreads job advertisements across a very wide network of job sites and reallocates budget to where advertisements generate the best results. We helped some organizations to identify niche job boards, where they could search for specialists in their industry with ties to professional associations, campus groups, or alumni groups. For other organizations, we examined the pros and cons of social search platforms like HireEZ or Seekout, which have large external candidate databases that organizations can use to search and contact passive candidates, who might be ready to make a move to a new job but aren’t active users of job sites.

Referral platforms also came up in these conversations, because they offered a way for organizations to manage a comprehensive referral program at scale and attract candidates from their employees’ professional networks, where organizations often tell us that they find their best hires. 

Organizations wanted to know more about labor market intelligence platforms, which could help them to find good candidates across the country—particularly in remote areas where large organizations might have facilities but where candidates are harder to come by—and what skills candidates brought to the table. 

Even though AI was not quite as popular as it is in early 2025, organizations wanted to know about conversational AI platforms that promised dynamic career sites and chat capabilities that could move candidates from the career page to pre-screening or assessment to interview in minutes, ensuring that candidates had the easiest, fastest experience possible. The faster the hiring process, the more likely a candidate with many other opportunities would stay in the mix for an open job.

The Conversations Change to Candidate Quality

These conversations started to change around the beginning of last year. By then, the U.S. Federal Reserve had raised its target interest rate several times from essentially zero to just over 5%, with the goal of cooling down economic activity and in turn reducing inflation. The Federal Reserve—talking about as explicitly as it ever has about its labor market impacts—believed that part of the goal of raising rates was to slow down the pace of hiring without leading to a recession. More jobs mean more consumer spending, which can increase inflation. The interest rate increases had their intended effect. Business spending, including on workers, slowed down without sending the U.S. economy into a recession.

Once again, market conditions would alter the goals of recruitment teams. Job openings decreased—and in some industries like technology, organizations laid workers off in large numbers. As the labor supply steadily increased, the decrease in demand for workers rebalanced supply and demand. 

In turn, the number of applicants per job increased. For recruitment teams, particularly at high-volume hiring organizations, there was less pressure to find applicants, either because their organizations reduced the number of job openings or because applicants were more willing to join and remain in the candidate pool, since there were fewer other job opportunities available.

During this time, our conversations with recruitment teams became less focused on technologies to increase the volume of applicants and more focused on technologies to increase the quality of applicants. More of our clients had all the applicants they needed. Instead, these clients need a way to help filter out unqualified applicants to find the best of the group. 

Remember that throughout this period, the decrease in job openings and the increase in layoffs were affecting recruitment teams, as well. These teams were leaner than before and evaluating all of their applicants was getting to be too much, given all their other daily tasks. They began asking TTL what tools were available to help with candidate quality.

Our conversations centered on assessment platforms, which were already growing in response to innovations like AI-based evaluation. We were having more conversations around interview management tools, which help TA teams to quickly prepare unbiased, robust interviews and automatically record and analyze interviews for keywords, responses, and sentiment. Interview scheduling platforms remain a popular topic of conversation, but the focus is more on how they add ROI at low cost—freeing up recruiters for other needs and reducing TA budget constraints—rather than on how they can help to manage candidate volume. 

Over the past year, TTL has also talked more about AI-based phone or chat platforms than before. Tools like Sapia, Scotty AI, Qualifi, or ConverzAI allow organizations to conduct one-way or AI-based interviews and can summarize and even evaluate those interviews automatically to determine the best candidates. In 2024 and early 2025, return on investment—measured in hours or dollars saved—is critical for organizations taking on new talent acquisition technologies. Smaller recruitment teams need tools to help narrow down the larger number of candidates for each job opening.

Economic Outlook and the Impact on Talent Management

The U.S. economy remains strong, and nonfarm employment growth is increasing at an impressive pace given that interest rates remain high and the economic recovery has persisted for several years, so don’t expect a large drop-off in demand for technologies that help to find candidates. Those tools will remain popular, whether for organizations hiring full-time, part-time, or for contingent workers. However, expect to see more growth and innovation in candidate quality-oriented technologies to meet the recent (and continuing) demand for them.

Expect to see demand for talent management-focused tools to grow, as well. As job openings decrease, organizations will be looking for technologies that help them to make the best use of the existing workforce, either through upskilling or through talent evaluation. We at TTL expect to have a lot more conversations about learning platforms, skills taxonomy-related platforms, and internal talent marketplaces, allowing organizations to better understand the resources they already have in-house and to optimize those resources to generate a better impact. 

In fact, we’ve already seen labor market intelligence platforms, like Lightcast, leverage their existing capabilities in evaluating skills for TA to help organizations to evaluate skills for TM. With skills seemingly on the mind of every HR leader, expect to see other vendors take on skills evaluation within the organization. The coming years should bring about a lot of growth in organizations’ internal and external talent evaluation capabilities.

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