The conclusion of the year paints a nuanced picture of the labor market. Job postings on Indeed have experienced a significant decline of 22.5% since their peak in December 2021, according to the platform’s Nov. 15 U.S. Jobs & Hiring Trends Report for 2024. However, the report highlights that layoffs have remained historically low, hovering around 1% as of September.
The outlook for the upcoming year hinges not only on the trajectory of worker demand but also on whether any potential reductions result more from decreased hiring rather than an increase in layoffs, as outlined in the report. Nick Bunker, Economic Research Director for North America at Indeed Hiring Lab, cautioned that a prolonged contraction might lead to employers shedding current workers, resulting in a rise in layoffs.
Over the past year, the participation rate of prime-age workers (ages 25-54) in the labor market has surged to levels not seen in two decades, fueled by an uptick in immigration post-pandemic. Despite this positive trend, the report suggests that even if participation among prime-age workers matches the all-time high of 1999 and older workers aged 65 and above increase their participation rates, the aging population could still contribute to a shrinking labor pool after 2025.
The year also marks the apparent conclusion of the Great Resignation, with workers displaying a notable reduction in quitting rates compared to late 2021 and 2022. Bunker attributes this slowdown to declining employee demand for new hires in early 2022. Nevertheless, he cautions against assuming that a return to pre-pandemic quitting rates implies a lack of job opportunities for workers or that employers can afford to overlook retention strategies.
The aging population could still contribute to a shrinking labor pool after 2025.
One concern highlighted in the report is the increasing tendency of job seekers to explore opportunities outside their current field. For instance, data from Indeed indicates a rise from 77% to 85% in the share of civil engineers looking at postings outside their field since 2019. Bunker suggests that employers may need to take proactive measures, such as increasing pay or benefits and enhancing workplace flexibility, to retain current employees.
While investments in employee experience (EX) have proven beneficial in terms of employee engagement, productivity, and attrition reduction, a Forrester report predicts a significant decline in EX investments in 2024. This anticipated “EX recession” is expected to impact areas such as culture energy and diversity, equity, and inclusion programs.
In the coming year, U.S. employers are poised to undergo cultural shifts as Gen Z workers are projected to surpass Baby Boomers in the full-time workforce, according to Glassdoor’s Workplace Trends Report. To attract and retain this demographic, employers must address Gen Z priorities, including community connections, transparent and responsive leadership, and a commitment to diversity and inclusion.
Despite the fluctuations in the labor market, the report suggests that the past year has demonstrated that wage growth can decelerate without causing a spike in unemployment, and previously disengaged workers can be lured back into the labor market. Bunker concludes on a cautiously optimistic note for 2024, emphasizing the need to avoid overstating the positive outlook.
