March 15, 2023
March 15, 2023
Photo by John Salvino on Unsplash
The start of 2023 has everyone wondering about the labor market. With bad news about layoffs, big cuts in the tech sector, and more big cuts the first month of the new year, employers and job seekers alike are worried and want to know what’s coming. Although it hasn’t all been bad news, as the latest Labor Department data posted that less than one percent of the workforce experienced layoffs in November 2022.
Business experts on Forbes are predicting uncertainty about 2023’s labor market because of a rocky global economy from continuing supply chain issues and political upheavals. The U.S. labor market may be currently strong because of a strong economy. However, it’s unpredictable because of quickly evolving issues including mass layoffs and hiring freezes in some sectors and workers unsatisfied after two years of working through a pandemic. Let’s take a look at job market trends and emerging workplace issues affecting the 2023 labor market.
Employers and employees face a competitive labor market coming off of two years of a worldwide pandemic. Forbes contributor Kara Dennison sees upskilling, internal mobility, and flexibility with a four-day work week and remote work as 2023 sticking points. Business leaders are looking at hybrid work schedules, remote work, and shortened work weeks to keep workers onboard and tackle retention issues.
Talent acquisition professionals like Gartner agree, calling it “quiet hiring” to focus on internal talent mobility and upskilling to support organizational needs along with turning to alumni networks and gig workers for workforce flexibility on an as-needed basis. Workforce flexibility in 2023 and going forward will include what Gartner survey shows workers want: control over their schedules and schedule stability and paid leave, flexibility in what they work on, who they work with, and the amount of work they complete.
Gartner sees support for managers with flexibility and career opportunities as an important 2023 job market trend to address the managerial skills gap. Employers will need to pursue nontraditional candidates to meet their workforce needs that traditional sourcing methods have been unable to address. Pervasive mental health challenges from two years of worldwide pandemic conditions mean employers must support their workforces with things like offering and approving adequate paid time off, reduced meeting schedules, and attention to worker needs before and during high-demand work periods.
Another labor market trend employers and workers will face in 2023 is the Gen Z skills gap from the pandemic-induced isolation that hit young people. The pandemic affected education and career preparation, leaving many without the necessary workforce preparation and soft skills employers and employees need. Businesses needing economical workforce options in a tight labor market may face negative impacts of the erosion of social skills, burnout, and career insecurity and need to address professionalism in their organizations.
2023’s job market will see some new issues that weren’t around pre-COVID, according to CNBC’s lead work reporter Jennifer Liu. Recruiting experts like ZipRecruiter chief economist Julia Pollak say blue-collar work may be more secure than white-collar work.
That’s thanks to the Federal Reserve’s interest rate hike campaign that negatively impacted finance, real estate, and tech sectors more sensitive to borrowing and interest rates. Those areas saw more layoffs in the second half of 2022, leaving those workers with less job security. Workers are looking to professional and business services, construction, retail and manufacturing, as well as healthcare and social assistance jobs for more security.
High turnover has long been an HR metric that employers and recruiters looked to reduce, and it's not going away anytime soon. Pollak says it’s the new normal, as workers are quitting even amidst economic uncertainty. Add to that remote and flexible work that makes it easier for employees to change jobs, leaving employers chronically short of needed workers.
Workers continuing to claim unemployment benefits–jobless–fell under pre-pandemic levels according to the Society for Human Resource Management (SHRM). CNBC quotes the ADP jobs report that says the U.S. gained 235,000 jobs recently, creating worry that the hot jobs market will prompt the Fed to continue aggressive rate hikes into 2023. With high jobless claims generally thought of as the precursor to layoffs, lower jobless claims are a surprising indication of a strong job market.
Government reports show that job openings remain strong and the U.S. economy is gaining hundreds of thousands of jobs. However, the Fed is predicting slower growth and higher unemployment in 2023 and 2024. By the end of 2023 the unemployment rate is predicted to increase amid the recession. Additionally, it’s predicted that the first few months of 2023 will see thousands of new jobless claims as temporary holiday jobs come to an end, possibly distorting job market data.
Uncertainty, good news, and bad news are what the job market for 2023 looks like. WorkLife News reports that recruiting platform Employ’s recent survey shows job seekers are pickier and accepting 40 percent or fewer job offers, leading recruiters to believe hiring in 2023 will be difficult. Employers need to take reskilling/upskilling, quality hiring processes, and prioritizing Gen Z and millennials’ values of social responsibility and diversity and inclusion to be competitive in a tight and uncertain labor market.