Dive Brief:
- The labor market is closing the year on a tempered note: Job postings on Indeed fell considerably (22.5%) since their peak in December 2021, but layoffs stayed historically low (around 1% as of September), according to the platform’s Nov. 15 U.S. Jobs & Hiring Trends Report for 2024.
- Next year’s outlook depends not only on whether the demand for workers continues to fall, but also on whether any future declines come primarily through less hiring rather than more layoffs, the report noted. A prolonged contraction could mean employers start to shed current workers and layoffs start to mount, Nick Bunker, economic rsearch director for North America at Indeed Hiring Lab, explained in the report.
- Over the past year, the participation rate of prime-age workers (ages 25-54) in the labor market rose to levels not seen in 20 years, boosted by a rebound in immigration following the pandemic, the report found. But even if participation among prime-age workers rises to match the all-time high of 1999, and more workers aged 65+ push their participation to all-time highs, after 2025, the “weight of demographics would take over,” and employers could still face a shrinking labor pool due to an aging population, according to the report.
Dive Insight:
This year also signaled the end of the Great Resignation: “It’s clear that workers just aren’t quitting like they used to, at least compared to the rates in late 2021 and 2022,” Bunker pointed out. He attributed the slowdown to declining employee demand for new hires in early 2022.
Even so, “a return to the 2019-era quits rate doesn’t mean workers are suddenly without opportunities to find new jobs or that employers don’t need to worry about retaining current workers,” Bunker cautioned.
One concern is that job seekers are increasingly shifting their interest to postings outside their current field, according to Indeed data. For example, since 2019, the share of civil engineers looking at postings outside their field has increased from 77% to 85%, the report found. “If a growing share of workers in some fields are looking to leave those roles without an offsetting rise in interest from other fields, employers would need to take steps to retain current employees,” such as increasing pay or benefits or making changes to workplace flexibility, Bunker said.
Employers seeking to retain workers will also want to consider investing in employee experience, or EX. Despite bolstering employee engagement, improving productivity and lowering attrition, investments in EX are expected to take a significant hit in 2024, according to a recent Forrester report. What its analysts dubbed an “EX recession" is expected to affect “culture energy” and diversity, equity and inclusion programs, the report found.
With the pushback against DEI and belonging programs in some sectors and the pullback on these initiatives expected to continue, it may be time to reinvent DEIB, panelists noted during an October discussion on trending HR issues hosted by the Florida Bar.
U.S. employers also face pivotal cultural changes next year as Gen Z workers are set to overtake Baby Boomers in the full-time workforce, according to Glassdoor’s Workplace Trends Report. To attract and retain this important share of the workplace, employers will need to address the priorities of Gen Z workers — including community connections, having their voices heard at work, transparent and responsive leadership and diversity and inclusion, the November report indicated.
So far, the labor market has shown that “wage growth can slow without a spike in unemployment” and “workers who left the labor market can be drawn back,” Bunker said. “There’s a case for optimism for 2024, but it’s best not to oversell it,” he concluded.
