Four Market Trends to Know

We are putting a bow on 2023 and getting ready for a fresh start. As we look ahead to 2024, we’ve observed several notable trends through our discussions with clients and candidates at NW Recruiting Partners. The following four trends are expected to shape the job market and business landscape in the coming year:

  1. Core Inflation Hits a Slowdown

While consumer prices remained essentially unchanged in October, there’s a bright spot in the fight against inflation. As reported by Yahoo Finance, core inflation – inflation rates with volatile food and fuel markets taken out of the equation – rose 4.0% year-over-year, making it the slowest pace since September 2021.

The slowdown of inflation is a good sign for the health of the economy, not to mention the willingness of consumers to spend. While inflation does seem to be trending downward, there’s still a little way to go before it hits overall targets. The market will still need to cool further before interest rates begin dropping again, among other factors. Still, an ease of core inflation is one more positive indicator that a “soft landing” is possible.

  1. Increased Confidence in the Economy

More experts are indicating confidence in the U.S. economy, riding on positive trends about inflation, among others. November’s jobs report showed a growth of 199,000 jobs, an uptick from the previous month’s 150,000 additions. This increase likely owes a significant portion to resolving major labor strikes in Hollywood and the auto industry, sending those workers (and those in associated jobs, such as Hollywood crews) back to work.

Perhaps because of these positive trends, 67% of business leaders in an Employer Associations of America report believe the economy will improve or stay the same in 2024, as reported by Staffing Industry Analysts. In contrast, just 49% said the same at this time last year. Talent acquisition remains the top concern for those leaders, but this confidence boost is welcome news as we get the new year underway.

  1. Salary Increases vs. the Cost of Open Jobs

On the one hand, research from WTW, a leading global advisory and brokerage firm, found that U.S. employers are planning an average salary increase of 4.0% in 2024. That’s lower than the actual annual average of 4.4% in 2023 but higher than the 3.1% seen in 2021. Inflation and a competitive labor market continue to drive these increased salaries. Still, this tick downwards indicates a potential cooldown in the labor market and an easing of some of these pressures.

On the other hand, companies must carefully consider the cost of unfilled jobs, not just the costs of paying to secure top talent. According to a Fiverr and Lightcast report, unfilled jobs cost the economy $1.08 trillion per month. On average, a single open role costs a business $25,000 per month in lost output, and open roles for highly skilled professions cost even more. It’s an indication that securing top talent – and retaining them – must remain a top priority for leaders in 2024.

  1. AI Worries Flare Up

Even as the use of AI accelerates, professionals across roles are expressing their concerns about the possible outcomes. One study focused on the use of AI in resume screening and recruiting found that the use of higher-quality AI to “assist” recruiters actually led to worse assessments of job applications, while recruiters using lower-quality AI assistance exerted more effort, spent more time evaluating resumes, and were less likely to automatically select the AI-recommended candidate. While AI can help to streamline the recruiting process, it’s clear that real, human expertise must still take the reins to truly identify the right fit for a role.

Similarly, concerns over AI generally are higher than they were a year ago. Ernst & Young found that 48% of respondents are more concerned about AI today than a year ago, and 75% are concerned that AI will make certain jobs obsolete. 41% also believe AI is evolving too fast, while 72% are worried it will hurt their salary or promotion chances, 65% are worried about how to use AI ethically, and 77% are concerned about the legal risks of the technology. While AI may be an exciting frontier, incorporating AI, as with any technology, must be done to prioritize employee security and respect their hard-earned knowledge and expertise.

If you are thinking about your talent acquisition and retention strategy for 2024, now is the time to schedule a conversation with the NW Recruiting Partners team. Please reach out to set up a time to discuss your goals, and we are happy to share up-to-date insights based on the current hiring market.