Labor Market Trends
Updated: May 12
It is not a secret that the labor market in recent years has been experiencing *significant* changes, with a shake-up to just about every aspect of work: competitive hiring, the push for hybrid or remote work environments, wage pressures, quitting (ahem, The Great Resignation) and lay-offs just to name a few. As recruiters, our job is to know about jobs! So naturally we field the question: “tell me about the current labor market” almost daily. And while the news of lay-offs and the continued churn of the labor market might paint a daunting picture, we remain optimistic about the current overall labor trends and what it means for the near-term future.
By the Numbers: The overall job market, including unemployment rate, new job creation, and wage growth, is strong as of the end of April 2023. The unemployment rate has decreased to 3.9%, the lowest it has been in the last four years. This low unemployment rate is a sign of a strong labor market where employers are looking for new employees to meet their business demands.
Additionally, the job market has seen an increase in new job creation in various sectors, including technology, healthcare, and finance. This increase in new job creation is a positive sign for job seekers who are looking for new opportunities. We see the continued push to hire in our day-to-day work as well – there are jobs for those who want them.
Wage growth has also been positive in the last four years, and this trend is expected to continue in the coming years. The increase in wages is driven by the high demand for workers in various sectors and the need to attract and retain top talent. As a recruiting firm, we have seen this trend, and we believe that it will continue in the coming years.
So What About all the Lay-offs?: One glance at a news outlet and you’ll know, there is no shortage of lay-offs across a number of different industries in the United States. While this may seem like bad news – and contradictory to the information above - we believe that these layoffs provide an opportunity. This is a resettling: we experienced a huge hiring surge coupled with limited company drive layoffs. Organizations’ were so concerned about having enough employees, they were over-looking inefficient operations and holding on to as much of their labor force as they could! Businesses are now forced to evaluate their organizational structure, overall operations and yes, employee headcount, in a new light. As a recruiting firm, we have seen that many companies are using this opportunity to restructure their organizations and adapt to the changing business environment. Organizations are looking for candidates with specific skill sets that align with their business goals. While certainly not pleasant, we believe that these layoffs are not necessarily a negative thing, but rather an opportunity for companies to improve and adapt to the changing business environment, while providing employees an opportunity for the next step in their career.
The holistic job changes: competitive hiring, the push for hybrid or remote work environments, wage pressures, The Great Resignation, do not happen in a silo. What we are experiencing today is a result of the previous 4+ years of labor market changes shaking out. Our team at TalentFund is optimistic these changes will lead to new job openings in different sectors, creating opportunities for job seekers who have been affected by these layoffs.
Lasting Changes: Finally, we will continue to see the settling in some long-term shifts related to work, including hybrid and remote work and a more flexible overall work schedule. Many companies were forced to adopt remote work, and this trend is expected to continue, with reports predicting that up to 30% of the workforce is completely remote. This is because remote work has proven to be effective in many cases and offers benefits to both employees and employers.
Additionally, we have seen companies adopting hybrid work models, where employees work from the office and from home. This model allows companies to provide flexibility to their employees while also maintaining a physical office presence. As a recruiting firm, we believe that these shifts in work models provide opportunities for our clients to attract and retain top talent who value work-life balance and flexibility.
So how to we answer the “tell me about the labor market question”?
In summary: the labor market in 2023 is strong, and there are opportunities for job seekers and employers. While there may be a shake-up in certain industries, we believe that this presents an opportunity for companies to improve and adapt to the changing business environment. We will continue to see shifts in work models, including hybrid and remote work, which provide opportunities for employers to attract and retain top talent. As a recruiting firm, we are optimistic about the future of the labor market, and we are committed to providing staffing solutions that meet the needs of our clients in Kansas City and beyond.