In January 2023, the US market added 517,000 new job openings, which led to a 0.1% decrease in the unemployment rate. The latter has already been the lowest in the last 53 years and has held quite steadily at a rate of 3.4%. Still, despite these optimistic numbers, many job seekers feel insecure about their employment chances, which is not that surprising considering the economic recession associated with the past COVID crisis and major political upheavals worldwide.
So, what should we expect from the US labor market this year? Who will have the upper hand in 2023 — job seekers or employers? While there is still no definite answer to that — mostly because it is very industry- and company-specific prediction — there are a few trends we can safely count on in 2023.
Table of Contents
The labor market uncertainty may persist
Even though by the end of the last year, unemployment rates had dropped significantly in the US, there is still a certain degree of uncertainty about the market —mostly because the US economy cannot be seen as a stand-alone mechanism. The pandemics and changing political landscapes worldwide disrupt logistics chains, leading to a lot of layoffs and economic instabilities.
On the other hand, there is reason to believe that, as far as common jobs across different states are concerned, the situation will remain more or less stable. In fact, there is reason to believe that the number of vacancies will keep growing because even as some companies are cutting expenses and introducing layoffs, the more straightforward thinkers are actively searching for new talent.
Up-skilling and education within the companies
As some companies are investing their best effort to hire employees, others are working on educating their existing staff members. Up-skilling within one company is a trend that will most certainly continue in 2023. But there could be one catch, though. Generally, education and improved skills within a company equal promotions and salary increases. And while this may certainly still be the case in 2023, many employees have shown interest in up-skilling opportunities even when a promotion or higher pay is not at stake.
For employees, continuous education is a long-term investment in their future career opportunities. For employers, educating existing staff is a way to increase staff retention and minimize turnovers. Such a policy also results in a better qualified, and so, more productive staff. This means that many companies will keep introducing new programs to educate their team members — both internally and externally (paid courses, certificates, etc.) For people in the early stages of their careers, this is a truly unique opportunity worth taking. However, established professionals will certainly benefit from this trend, too.
Shifting to shorter work weeks and flexible hours
The tendency towards a better work-life balance and a shorter business week has been developing for some time now, and remote work during the COVID pandemics strengthened it even more. More and more companies are shifting to a 4-day work week, and while many insist on keeping the number of hours the same, some enterprises are reducing the work time, too. Of course, reduced work hours are not something that can apply to all industries — it is most common in high-skilled intellectual professions. Less skilled jobs may imply shifting to a 10-hour work day during a four-day business week.
In any case, whatever the actual billable hours’ arrangement may be, it is hard to argue employees’ willingness to have more days off to themselves. Also, the up-skilling trend discussed above plays a major part in the shortening of a business week. As experts grow professionally and become more productive during their business hours, the 5-day, 40-hours work week becomes less of a necessity — especially since it’s already been proven that high-skilled people can accomplish more over a shorter timespan when given enough motivation to do so.
Competition for high-skilled jobs may grow
Even though many companies are already working on educating their employees and creating more up-skilled teams, some other businesses may choose to hire top talent rather than educate it. There is really no definite answer as to which strategy is better as far as management is concerned. Still, one thing is pretty clear — as more companies invest in employee education, the competition for high-skilled jobs will increase, too.
However, this does not mean that highly qualified experts will have to settle down for low-skilled jobs. The reason why so many employers choose to invest in staff education is that higher workforce retention within a company generally results in higher productivity. So, any professionals with reasonably balanced hard and soft skills will always be in high demand, particularly so with managerial and executive positions. Traditionally, people like this will have the upper hand when it comes to employment prospects.
Salary transparency trend is becoming a norm
The growing tendency towards all-inclusiveness and non-discrimination has eventually resulted in salary transparency as well. Major US corporations, including American Express and IBM, have already announced that they would make salary ranges within their companies publicly available. Right now, legislation for disclosing wages is already in the work, and even though it is highly unlikely that every employees’ salary will be posted online to the cent, this growing transparency trend is more obvious than ever.
The idea behind salary transparency can eventually lead to better market matching, which in the long run, usually translates into higher productivity levels within companies. So, while not all businesses today are equally enthusiastic about the change, it is not necessarily something to be alarmed about.
These are some of the top labor market trends that should apply to all US industries in 2023. Of course, depending on the industry, there can be other tendencies that influence hiring and employment prospects. Still, the situation seems stable on the whole, despite uncertainty and the growing inflation rate. So, there is no real reason for concern — especially for qualified experts who are willing to learn and invest in the development of their professional skills.
