302: Job Market Prognosis for 2024
Job Market Prognosis for 2024
There is a lot of confusion about the current job market – perhaps the most I’ve ever heard of outside of the 2008 recession. I wanted to bring you some facts today – as well as a translation of those facts into action steps you can take to increase your chances of success.
Here’s a quote from Nick Bunker, Indeed Hiring Lab Director of Economic Research for North America:
“Outside of some risks – the ones we know about and the ones we don’t – things look pretty good so far. There’s lots of indications that the probability of the economy pulling off a ‘soft landing’ has gone up.”
Here are five economic trends that will shape the job market for 2024:
1. Ongoing worker demand
Simply put, high employer demand for workers will need to continue. However, the labor market outlook for 2024 not only hinges on whether employer demand for workers continues to fall, as it has in recent years, or not – and on how employers reduce their demand.
There could be a round of widespread layoffs as employers look to shed workers. If, on the other hand, employers hoard labor as many think will happen, job postings and openings could fall without unemployment rates rising.
In other words, if you’re in you’re in – but if you’re out, you’ll find it difficult to get in.
Why would employers hoard labor, even if their financial results don’t support it? Because of the difficulty they faced just a few years ago when trying to ramp back up after Covid’s effect on the labor market. They don’t want to be in line to hire from a scant supply of workers, nor do they want to lose productivity as they train and ramp up a new workforce.
What this means for you: Keeping your skills and credentials current is extremely important – we are past the labor market of a few years ago where a pulse was just about all you needed for some jobs. Make it difficult for your employer to let you go.
2. An influx of younger workers.
More prime-age workers (defined as 25-54) need to enter the workforce to counteract the long-term drag of an aging population.
As many older workers opt for retirement or reduced working hours/responsibilities, coupled with a flat rate of immigration, the number of prime-age workers in the U.S. will continue to decrease.
This drop-off may not happen in 2024, but it is inevitable that it WILL happen. According to the U.S. Bureau of Labor Statistics, we reached the highest percentage of labor force participation in 2018, with a steady decline expected through 2030.
The labor force participation rate is the percentage of the population that is either working or actively looking for work. I did some math on this: The current population of the U.S. is about 332 million. Currently, about 62.5% of those people are in the labor force – or want to be; that equals about 207 million.
Come 2030, the expected population of the U.S. will be about 360 million. With an expected labor force participation rate of 62%, that equals about 223 million.
At the risk of geeking out on you, that means we currently have about 125 million people NOT in the work force and not wanting to be. In six years, we are expected to have 137 million people NOT in the work force and not wanting to be.
12 million more people NOT filling jobs.
What this means for you: I want to approach this from a different angle. What these statistics tell me is that the need for new entrants into the workforce to hold jobs that supply services and products to older Americans is only going to continue to grow. I would NEVER tell someone to enter a career field they were not passionate about – but how could you point your skills, values, and passions in the direction of a career path that has higher than average job security, such as serving older Americans?
3. A steady quitting rate.
Employees quit at an unprecedented rate in 2021 and 2022; we need to maintain a steady quit rate.
Here’s what the quit rate indicates: Employees’ confidence in either finding another job or pursuing other meaningful work, such as self-employment. Higher quit rates often equate to increases in salary and benefits – as well as more work flexibility, such as remote work.
Of course, within a fairly robust economy where employees have options, a quit rate can also be the equivalent of “I’m mad as hell and I’m not taking it anymore.”
I also saw a lot of employees quit during the pandemic because the economic, political, and public health conditions created a perfect storm for people to reevaluate their career path – and, in many cases, take a career pivot or career reinvention.
Many employers, especially in such sectors as hospitality and leisure, are putting incredible emphasis on talent attraction and retention measures.
What this means for you: Do your homework before quitting without another job lined up. In some sectors, you may be hired quickly; in others, you may find yourself unemployed for several months.
If you believe you are on the wrong career path, invest in working with a career coach like me – it’s well worth the money. If you are attracted to entrepreneurialism, try it on while you are still employed – you may decide you love it, but only as a side gig.
4. Declining wage growth.
This may sound like bad news. Nominal wage growth will need to continue or decrease by a little, but not too much. For workers to maintain and increase purchasing power, wage growth cannot fall below the rate of inflation.
As a result of the intersection of the three trends above — a decrease in employer demand, an increase in labor supply and depressed levels of quitting — wage growth is expected to return to the 3.5% to 4% range early next year. This is a “healthy and sustainable rate seen before the pandemic” and a marked cooldown from the January 2022 peak of 9.3%, per data from the Indeed Wage Tracker.
What this means for you: Don’t get greedy with your salary expectations if you are in the job market – especially if you changed jobs during the peak wage increases of a few years ago. Do your homework, using the U.S. Department of Labor’s statistics and other sources to determine a reasonable expectation for your compensation package.
5. AI adoption.
AI tools are expected to boost productivity growth and fundamentally change the labor market in the near future. It is expected that demand will increase for jobs related to creating AI-based tools, as well as for jobs that use them.
We will likely see a considerable upsurge in job postings that mention generative artificial intelligence (GenAI).
What this means for you: No matter what kind of work you do, you will be well served to learn AI tools – especially as they relate to your career field and industry. There is no shortage of courses out there – or you can teach yourself, as I have.
As for WHAT jobs will be in demand in 2024, I really don’t want to go down that road because I want your career choice to be based on your skills, values, and passions, rather than where the jobs are.
Having said, that, there IS value in knowing what sectors are hiring within your chosen career path – and what emerging skills or competencies employers in those sectors are looking for.
This question obviously opens up a world of possibilities, so I encourage you to do your research on what’s happening in your career field, where the hiring is occurring, and any niche specifics on how to make yourself more marketable.
The final piece of advice I want to give you is how to prepare for any of the possibilities I’ve talked about in this episode. I won’t go into detail here, because these are things I’ve taught you about in other episodes – in many cases, ad nauseum.
And, of course, if you need help with any of these things (and trust me, you do), reach out and let’s talk.
-Make sure your skills and credentials are current and marketable; begin acquiring any new ones that will increase your marketability and/or promotability
-Update your resume
-Freshen up your LinkedIn profile
-Create a plan to energize (or in some cases, begin) your networking efforts that is intentional and strategic
-Have a conversation with your boss, if appropriate, about how to make yourself more indispensable in your current role – what new project or duty can you take on to expand your skill set?
-Practice your interviewing skills – preferably with a professional
And finally – spend some time really thinking about where you want your career to go next. Make sure you are being proactive with your career, not just reacting to the job market or other external forces. If you can invest in yourself to work with a career coach for this, I promise it will yield tremendous ROI for your career.