A Look at the State of the Job Market Heading into 2024

While looking back can help us understand how and why the current job market reacts to certain tried and true challenges — if we’ve learned anything over the past few years, it’s to expect the unexpected and prepare for everything in between.

Inflation, uncertainty, shifting expectations – the list goes on – but one thing is for sure, TZR remains a leader in the recruiting space due largely in part to our team of experts, who are ready to face a new year and everything that comes with it.

Balance of Power

Job openings have fallen 36% over the last 16 months and, with that, the power employees held over employers started to shift.

“It’s one hundred percent true that employers are regaining control of hiring again—across every industry across the board,” says Jacob Zabkowicz, vice president and general manager of Korn Ferry’s Recruitment Process Outsourcing business,” Korn Ferry.

We saw this coming back in Q1, 2023 and predicted a slow -down in Q3 and Q4. But a decrease this substantial is still quite surprising.

Keep in mind, though, that this is a macro number and does not take into account specific industries that tend to stay more resilient in down times. For instance, the construction industry recently presented data showing very high growth needs for talent in both the residential and commercial sectors.

While having an eye on larger trends is necessary, what sets TZR apart is our subject matter expertise in the industries we serve.

Numbers Matter

The drop in job openings will, of course, impact potential employees’ leverage as they search for new roles and negotiate potential offers.

“Overall wages are still growing far more slowly than they were a year ago. And in some instances, companies are testing whether they can pay new employees less.”

“Salaries for posted jobs are 5% below what they were in 2022, according to recent data.”

And that’s if companies decide to extend their search beyond their own ‘four walls’.

“Companies are trying to rein in some of the costs they had to absorb over the last two years to attract talent. Rather than bring in new recruits—and consequently increase payroll—more and more firms are reassigning people from roles that are no longer needed.”

But this shift of expectations is slow-going and doesn’t mean employers should start underpaying.

The number of overall job openings is still high, meaning competition hasn’t disappeared, and attracting the best talent means being willing to offer employees an overall compensation package that reflects their worth.

And, rising inflation (and interest rates) means that candidates can still justify the need for a higher salary since their money isn’t going as far.

History Has its Eyes on us

The balance of power between employers and employees is constantly shifting; and both sides would do well to remember that what comes up, must come down.

It wasn’t long ago we were working with clients to manage high candidate expectations while keeping the competition from coming in and landing their most valuable targets. Now, things are changing.

“The declining number of openings also means organizations are less fearful that their existing workers will quit. Indeed, the percentage of people quitting their roles each month—which spiked to an all-time high of 3.0% in April 2002—is now down to 2.3%, comparable to the rate of the late 2010s.”

And while this may make some employers breathe a sigh of relief – we continue to encourage our clients to do the best they can for the talent they want to attract.

“To be sure, 8.8 million is still a lot of job openings. In February 2020, before COVID-19 threw everything into chaos, there were about 7 million openings. Barring a steeper decline from here, it might be unrealistic for firms to trim salaries and benefits if they expect to lure top talent.”

“Still, the decline is returning some leverage to employers. “The market was artificially high. Will it be overcorrected? I don’t know, but it’s being corrected now,” says Doug Charles, president of Korn Ferry in the Americas.”

It doesn’t hurt the market for the tides to shift back to the employer simply to balance the equation. But we should be wise enough to recognize this will all happen again…and again. 

If you’re ready to feel like you know that you truly have a handle on things, and that you have an expert on your side to guide through the hire process and find phenomenal talent then reach out to us – we’re already getting started for you.