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The last three years or so have completely upended the labor market, first with the shift to working from home during COVID, then the Great Resignation as workers leveraged their power to demand changes, and now with a series of layoffs, most notably in the tech sector, which may be putting some of the power back into the hands of employers.
It can be a little difficult to understand exactly what's happening, or where all of this is going. but a new report from Indeed and Glassdoor helps shed some light on what's important to employees, and how employers are responding to these new demands.
The Hiring & Workplace Trends Report zeroed into on five key labor market trends that these companies believe, "will persist beyond the near-term fluctuations in the business cycle, and likely withstand even a potential global recession."
An aging population equals a shrinking workforce
The first trend that the report outlines is a tightening labor supply, mostly due to demographic changes; namely, many countries in the west have aging populations. In the U.S., for example, nearly one in four Americans will be 65 years and older by 2060, while the number of people aged 85 or more is going to triple, and the country will add a half million people who are least 100. In the UK, there are over 11 million people aged 65 currently, and in ten years that is expected to increased to 13 million people, or 22% of the population.
At the same time, numerous countries are seeing declining birth rates as well. Between 2015 and 2021, the total fertility rate in Germany was between 1.5 and 1.6 children per woman; at the beginning of 2022, it had dropped to 1.3 and 1.4, a 10% decrease. Canada's birth rate hit a record low in 2020 to 1.40 children per woman.
All of this is going to lead to a smaller workforce in the coming years, which might be a good thing for workers, though, as they will be able to ask for more from their prospective employer, who will have less people to choose from.
"Despite looming talks of recessions, Indeed and Glassdoor economists believe that hiring
will remain challenging for years to come driven by demographics and evolving preferences. Workers will continue to have the leverage to press for higher pay, stronger benefits, scheduling flexibility, and a variety of other perquisites," it says in the report.
The proliferation of remote work
One of the most obvious changes brought about by COVID was the shift to people working from home: before the pandemic, only 6% of the employed worked primarily from home and about three-quarters of workers had never worked from home. By May 2020, over one-third of employees were doing so.
Even though now things have gotten back to normal, and some prominent companies are trying to go back to the way things were by mandating that their workers come back into the office, the reality is that it's likely never going back to the way it was before.
As the report shows, not only are more workers searching for jobs that are remote, companies are posting more of those types of jobs as well. The biggest increase in remote job postings came in Canada, jumping 275% from September 2019 to September 2022, while the highest percentage of searches for these jobs is coming from workers in the U.S.In fact, wanting a remote job is now the biggest factor for women wanting a new job, though "higher pay" is still the biggest motivator, by far, for both genders.Ultimately, remote work could be a double edged sword, though; as the report notes, it might benefit some workers while possibly excluding others.
"Remote work could intensify economic inequality and gender roles (women seek remote jobs at higher rates than men). At the same time, remote work eliminates the commute, which has allowed workers with disabilities to find and maintain employment. In addition, remote work has the potential to create much more diversity in the workforce," it says.
"Remote work at this scale is new territory for employers, and it is imperative they continue to monitor and adjust their policies to ensure the inclusivity, equity, and diversity of their workforce."
Increased focus on benefits
Along with the aforementioned higher pay that workers always want, the other thing that can entice employees to come to a new place of employment, or stay where they already are, are increased benefits, something that employers are now more frequently advertising.
The percentage of job postings that include retirement plans, paid time off, and, especially, health insurance, have doubled since the beginning of 2019, right before the pandemic hit. The targets of these job postings are, predominantly, lower wage workers who are employed in roles that, as the report notes, "require attendance at a worksite," meaning they can't take advantage of remote work. Employees are seemingly making up for this by giving them added benefits.
From August 2019 to August 2022, sectors like personal care and home health saw paid time off rise from 21.3% to 38.8%. In all, between 2019 and 2022, the percentage of low-wage sectors offering paid time off as a benefit increased from 17% to 34%.One area where employers are increasingly stepping up is in providing mental health services: the percent of companies offering these benefits has gone up 18 percentage points since 2017, and are now they are included in 63% of benefit reviews on Glassdoor.Happiness and Wellbeing Matter.
While the Great Resignation was in large part, again, about money, it was also about more than that: the second largest reason cited for people seeking new employment was feeling disrespected at work. In other words, company culture matters and people want to feel happy at their jobs and less stressed.
A recent study from Indeed showed 46% of people saying their expectations around happiness at work had increased in the last year, and 86% reported that how they feel at work impacted how they felt at home. Research from Glassdoor also found that, unsurprisingly, workers who are more satisfied with their current jobs are less likely to look for another one; in the US, employees who rate their companies two out of five stars are twice as likely to apply for a new job on Glassdoor, compared to those who rate their companies 5 stars.
In fact, even a small increase in worker satisfaction can keep people from leaving: in the UK, a one star increase for a company correlated in a 19% decreased in workers looking for a new job, while that percentage drop was 25% in France.
Diversity, equity, and inclusion
Among the newer generation of workers is a demand for more diversity, equity, and inclusion (DEI), something that has now come to the forefront as the older workers leave the workforce.
For workers aged 18 to 34, 72% said they would consider turning down a job offer or leaving a company if they did not think that their manager (or potential manager) supported DEI, while 67% said they would do the same if there was a gender imbalance in leadership, and 65% said they would consider doing so if there was a lack of ethnic diversity in leadership.
In each circumstance, the percentages of workers who said they would leave or turn down an offer went down with as the age of the workers went up.
Interestingly, after the percent of benefit reviews on Glassdoor citing their diversity program had big increases in 2020 and 2021, they went down in 2022 in both the UK and the US, while continuing to increase in Canada.This slowdown in DEI efforts could have a negative impact for employers on their ability to hire
and retain workers, the report stated.
"The workforce of tomorrow will care deeply about DEI initiatives and employers will use these programs to continue to differentiate themselves in a continuously competitive labor market. Plus, it’s not only good for workers—it’s good for business and for society," it said.
(Image source: istockphoto.com)
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