Title: American Workers Feel Restless as Job Market Tightens, Particularly for White-Collar Jobs
As the labor market in the United States tightens, American workers are growing increasingly restless in their current jobs. However, the struggle to find new employment opportunities in the white-collar sector has become more challenging.
Over the past couple of years, millions of workers seized the chance to switch jobs, enticed by abundant openings and substantial pay raises from companies desperate to hire. However, the market for salaried, white-collar jobs has cooled off in recent times, while workers’ desire to find new work has not. A new LinkedIn survey reveals that roughly 85% of 1,000 polled U.S. professionals are contemplating changing jobs this year, compared to 67% just a year ago.
The reality for those actively seeking employment is that they have less bargaining power compared to the recent past. Data from job boards indicate that companies are offering new hires less generous pay and flexibility and showing reluctance in negotiations over perks such as additional vacation time.
Nevertheless, even for those fortunate enough to receive an offer, the market for white-collar jobs, including positions in finance, marketing, and software development, has dipped below pre-pandemic levels, according to data from Indeed, a prominent job site. On LinkedIn, there is currently only one job opening available for every two applicants, a stark contrast to the situation a year ago when jobs outnumbered applicants two to one.
Consequently, many workers find themselves feeling stuck in their current positions, contributing to widespread job dissatisfaction. Challenges such as maintaining work-life balance and witnessing pay raises being overshadowed by inflation have become increasingly prevalent. Furthermore, employees are being asked to accomplish more with limited resources. Recent Gallup survey research suggests a decline in job engagement among U.S. workers during the second half of 2023, following a slight rebound in the first half.
Catherine Fisher, a LinkedIn vice president who tracks job trends, emphasizes that the power dynamic has shifted back in favor of hiring managers. Layoffs have further fueled the urgency for some workers to find new jobs. Sarah Sterner, for example, had been adjusting to her role as an educational coursework designer when her position was unexpectedly eliminated in a layoff. Despite applying to over 350 positions and participating in 18 interviews, she remains unemployed. The one offer she did receive was for a position advertised at $17,000 less than her previous salary. After negotiating an $8,000 raise, Sterner decided to decline the offer when her request for more than two weeks of paid time off was not met.
The premium in pay for switching jobs is also diminishing across the U.S. workforce. Data from the Federal Reserve Bank of Atlanta reveals that in August 2022, individuals who changed jobs saw an average pay increase of 8.4%, compared to those who stayed in their positions. However, by last month, the average raise for job switchers was only 5.7%, while those who remained with their employers received a 4.9% increase. Hiring decisions are increasingly influenced by companies’ leverage, especially now that many have halted their aggressive recruitment drives and, in some cases, initiated new rounds of layoffs.
Economists are cautiously optimistic that the hiring environment for white-collar roles will improve in the coming year if interest rates decrease. A drop in interest rates could lead to companies feeling more comfortable about hiring and making investments simultaneously. Julia Pollak, chief economist at ZipRecruiter, an online employment marketplace, notes that the period from April to August is typically a relatively strong hiring season.
The Wall Street Journal surveyed economists who forecast an average of 64,000 job additions per month this year, significantly less than the average in 2023. Sectors such as professional services and high-tech information are expected to experience slower growth. Additionally, some executives and analysts anticipate that corporate roles will continue to be scrutinized as artificial intelligence gradually assumes tasks previously performed by knowledge workers.
In this job market, job seekers must adopt a strategic approach. LinkedIn’s Catherine Fisher suggests incorporating networking into daily routines and reassessing skills that can transfer to other job categories. Younger workers, especially Generation Z and millennials, are particularly eager for job changes, with approximately 90% of Gen Z and 92% of millennials considering a switch this year. In contrast, 83% of Generation X workers and 48% of baby boomers are contemplating a change.
For some early-career professionals, searching for a new job is not optional but necessary. Peyton Nibblett, a 23-year-old graduate of Northwestern University, is willing to accept a pay cut after being laid off from a $75,000 position at an executive-search firm. Despite sending over 1,700 job applications to companies seeking entry-level analysts, he has not yet found success. After months of unsuccessful job hunting, Nibblett returned to live with his parents in the Roanoke, Va., area. His primary concern is that his limited work experience puts him at a disadvantage compared to other candidates.
As the job market in the United States evolves, workers face increasing challenges when seeking new opportunities. Despite shifting dynamics, workers are encouraged to adopt a strategic mindset, explore networking opportunities, and reevaluate their skills to navigate the changing landscape successfully.
