Recent US government data show that the job market is weaker than previously thought and the unemployment rate, at 4.3%, is at its highest level in almost four years. Many entry-level workers are struggling to find jobs, as employed Americans are hugging their current roles out of concern that it would be difficult to find something else.
To make sense of the implications of this jobs climate for both employers and white-collar workers, we reached out to Chris Martin, lead researcher at Glassdoor, the employer rating platform. Here are excerpts from our discussion, edited for space and clarity:
How would you characterize the outlook for hiring? What are the most significant questions you have about where we’re headed?
The labor market has been frozen, and that has meant fewer people quitting their jobs—this ‘job-hugging’ trend of people being unsure about entering the labor market, and so sticking with the job that they have where they have some security—but it’s also been slower on the hiring front too. You would think that there would be this pent-up demand and that it might be taking less time to fill roles, but we’re actually seeing the opposite too. Our friends at Indeed are tracking time to fill a role, and that’s actually been creeping up over the past 18 months. So not only do we have less quitting, but we have slower hiring. There’s even been a downtick in the number of laid-off workers over the past six or eight months.
There are regime changes in terms of the set of rules that companies are operating under in terms of who you can hire, how you can import, which companies you can partner with, and what the cost of moving goods across borders will be. We don’t even have resolution currently on what the tariff regime, for example, will look like in 12 months because it has been such a moving target. So what’s been happening on both the company side and the employee side is that everyone has been in a wait-and-see game to see if we can get more information about what things will look like, what might be rolled back, or what actually does go through.
AI kind of fits into this same mold of ‘we think it might be changing things a lot, but we’re not quite sure how it’s going to change hiring.’ Additionally, we might be entering a labor market downturn, or a broader market downturn could be triggered by these regime changes.
What I think we’ll start seeing over the next six months is the labor market starting to thaw, and then we’ll see how much the labor market remakes itself, or the market more broadly remakes itself for this regime change.
What are the implications of the current jobs climate for employers and how should they rethink their talent strategy?
In the labor market, the power dynamics have shifted towards employers, but key talent is still relatively mobile. They’ve got the easiest chances at securing another job. They’re most likely to leave. So even though you’ve got this ‘job hugging,’ I would say think about employees that you would really hate to lose and make sure you’re still investing in retaining and motivating those employees. That’s evergreen advice, but it’s especially true today. You may see less voluntary attrition, but make sure you’re still guarding against the attrition you would really dislike.
The second piece is you want to react but don’t overreact. An overreaction is starting with hiring and firing. Those are big decisions. They’re expensive decisions especially to roll back and so get really clear on your business strategy and then build a talent strategy that secures the future of that business strategy.
The thing I would guard against is firing a team or hiring a team for some half-baked initiative that you then need to roll back or realizing that you got rid of a whole team that you actually want to include in your function. It makes sense to move slowly.
What are the implications of the current jobs climate for white-collar workers? Do you have any advice for how they should be rethinking their career strategies?
It’s an open debate, the degree to which white-collar work will be remade and the timeline that remaking will happen. What we do see in the data is that white-collar work is less insulated from economic turmoil than it has been in the past. It used to hold this privileged position where you were less likely to get laid off, you had an easier time finding new work if you did lose your job.
That premium that white-collar work holds in the market seems to be decaying a little bit. So if there is an economic downturn, white-collar workers are going to feel it more than they felt it in previous downturns. That seems to be clear in the data. But my advice to these workers would be similar to the advice I’d give to businesses, which is you want to react to the changing environment, but don’t overreact.
Focus on your subject matter expertise, focus on building that expertise and applying it. If you’re in the early career position, that’s hardest because you may have some skills theoretically, but you don’t have the domain expertise from having been in your line of business for years. So focus on finding a job that can help you start to build those skills and the network.
If we look back at the Great Recession, it was a really hard time to graduate from college and start your career then too. But many of us who graduated during that time have managed to find careers all the same and find meaning in work and build professional lives that are really gratifying.