If there’s one word that has defined many of our discussions with clients and candidates in 2023, it’s “change.” This year has been one of shifts, both large and small, that have impacted the workforce in unexpected ways. At NW Recruiting Partners, we’re here to keep you up-to-date with evolving market dynamics so you can stay at the top of your game!
These four topics have been coming up the most in our recent client conversations.
Slower Growth in New Jobs and Wages
As the weather cools, so does the job market, or so it seems! In October 2023, the U.S. economy added 150,000 jobs, according to the U.S. Department of Labor, which fell short of Dow Jones’ consensus estimate of 170,000. Pay growth has also slowed down, according to the ADP National Employment Report, with workers staying in their jobs experiencing a 5.7% year-over-year increase, the slowest since 2021. Those changing jobs saw a pay increase of 8.4% in October, the smallest since July 2021. These numbers indicate a gradual cooldown of the labor market, making it less likely that the Fed will continue to hike rates to combat inflation. This held true on November 1, 2023, when the Fed held rates steady for now.
Which sectors made headlines amid these new numbers? Service-providing industries led the way, with 107,000 jobs added. Goods-producing industries added 6,000 jobs, with construction seeing a notable increase of 4,000 jobs. Education/health services also saw significant growth, adding 45,000 jobs, while professional/business services actually experienced a decrease of 10,000 jobs. Also worth noting, sectors such as manufacturing were likely impacted by the United Auto Workers strike, which slowed manufacturing but has since wrapped up.
GDP Defies Expectations
Many of us have been stressed this year over fears of a recession, but there’s good news on that front! The Bureau of Economic Analysis reported that the US gross domestic product (GDP) grew at an annual rate of 4.9% in the third quarter, surpassing expectations and marking an acceleration from the previous quarter’s growth of 2.1%.
According to Reuters, this robust economic performance can be attributed to higher wages and consumer spending. As consumer confidence rebounds, so does the economy, making it more likely that we’ll exit the potential crisis with a much “softer” landing than initially feared.
A Resilient Job Market
One common conversation we’ve been having with clients is about the overall resilience of the job market. So far, the trends show that despite economic challenges, the job market in the US remains resilient. According to a report by recruiting software provider Top Echelon, 73% of HR professionals reported increased job openings over the past year, with 63% expecting this trend to continue in the coming year. This optimism is driven by a strong desire to hire and a shortage of qualified talent.
If you’re wondering how work-from-home plays into this, we’ve got that covered, too. For the moment, the workforce, in general, seems to be leaning towards a middle ground: neither a complete “return to office” nor a total shift to WFH. However, Top Echelon reports that 85% of HR professionals have noted an increase in remote job opportunities. It’s a signal that more employees are looking for flexibility around when and how they work, even if they’re not planning on working remotely all the time.
Pay Transparency Matters
As we all know, recent laws – such as one now in effect in Washington – have required companies to disclose salary ranges in job postings. While it might not be a popular trend among employers, the reverse is true among employees. According to a survey from Randstad, 80% of employees consider pay transparency extremely important when applying for jobs or accepting offers.
Additionally, 67% of workers consider salary and compensation the most important factors for job satisfaction. Pay transparency is also a youth-driven trend, though not exclusive to that demographic: workers aged 18 to 24 are also increasingly comfortable discussing salaries, and 68% of respondents would request a raise if they discovered wage disparities among coworkers in similar roles. Compensation is just one part of the overall employee experience. Still, as these numbers show, a policy of transparency can help set organizations apart from the competition, especially when recruiting in-demand talent.