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The Job Seeker’s Guide To 2024’s Job Market

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Despite a lot of fear and uncertainty, the U.S. job market enjoyed a surprisingly smooth 2023, even amidst a fair share of volatility and tailwinds from factors like inflation and high interest rates. It remained fairly strong even after many projections for a recession, a banking crisis, geopolitical crises, and a historically fast tightening of monetary policy by the Federal Reserve. While that's an impressive feat, events like a reduction in layoffs, increased hiring numbers, slow wage growth, and an influx of AI tools in the market had to happen to enable the economy’s soft landing.

Whether the 2024 labor market will continue to maintain strength remains to be seen. From every indication, things should look good this year, economy-wise. As reassuring as that can be to job seekers, there is a need to brace for the unexpected, as past performance is no guarantee for future results. For the 2024 labor market to progress smoothly, there are five economic trends that will need to maintain their momentum during this year in order to see a strong and fruitful job market for job seekers.

Economists Believe Job Seekers Should Look Out For These 5 Economic Trends in 2024

According to an Indeed research director, there’s a case for optimism in 2024, but it’s best not to oversell. Below are about five economic trends that will shape the 2024 labor market, including which industries are predicted to do well or struggle:

1. Moderate hiring demand:

The demand for workers has moderated in 2023, but further reductions could be upsetting. That’s why, in 2024, it needs to stay strong, either through increased job postings or employee retention.

Even though we saw a hike in the number of available jobs last year, they were still lower than recent job market peaks. For instance, job openings as of late November 2023 were down 62,000 to 8.79 million from their March 2021 peak, and part of the decline is likely because employers have been able to fill many positions.

With that said, the labor market outlook for 2024 depends not only on whether worker demand continues to fall or not but also on whether any future decline will come primarily from less hiring rather than more layoffs. When hiring continues to cool, it becomes easier for the Federal Reserve to cut interest rates and reduce inflation. However, it has to be done gradually, as a rapid descent may spike unemployment.

2. An influx of prime-age workers:

Over the past several years, the participation rate of prime-age workers from ages 25–54 in the labor market experienced one of the largest surges we’ve seen in over 20 years, bolstered by elevated immigration levels after the pandemic and the return of previously sidelined workers.

The prediction for 2024 is that an increase of younger workers will continue to join the workforce if the labor market remains tight and immigration flows stay high. Additionally, the share of the aging population aged 65 and above is expected to rise from 17.5% in 2023 to 20.9% in 2035, indicating that, overall, the labor force will grow this year.

However, even with the increased participation levels of the aging U.S. population, employers could still face a shrinking talent pool in the long-term future when these workers retire and the number of prime-age workers in the labor force decreases.

3. Stable quitting rate:

The quit rate among workers plateaued in 2023, coming in at 2.3% back in September, marking the end of the Great Resignation. However, it will need to hold firm at its current pace, a level consistent with the 2019-era rates but still elevated by historical standards.

A stable and fairly low quitting rate bodes well for 2024. This means that employers might have to hire more people who are currently unemployed, instead of those who already have jobs, to fill open positions. This will help reduce wage growth and inflation.

Although the days of high quits rates are behind us and a return to pre-pandemic levels within sight, that doesn’t mean workers are suddenly out of new job opportunities or that employers don’t need to focus on retaining current staff. Employees are still quitting and job-switching at near-historic rates. This simply means that we’re coming out of the unusual trends that the pandemic set for the job market. As such, businesses will still need to improve their talent retention measures, such as market appropriate salaries and benefits or changes to workplace flexibility, to earn employee engagement and loyalty.

4. A downward trend in wage growth:

One of the determinants for measuring the labor market cooldown is that nominal wage comes down from its all-time highs. With the predictions for low hiring demands, growth in the labor force, and a decline in the quitting rate considered, wage growth is expected to return to a pre-pandemic pace. All the same, proceed with cautious optimism, as nothing is guaranteed and we don’t know how long the return will take or whether inflation will follow a similar trajectory.

For now, indications point to slowing wage growth, which could hit the 3.5%-4% sweet spot before the middle of this year and well below the January 2022 peak of 9.3%, as per data from the Indeed Wage Tracker. While the gradual fall in wage growth may not spike unemployment, as seen in 2023, it may, however, affect workers' purchasing power. Therefore, wage growth cannot fall below the rate of inflation, and employees need to keep receiving those inflation-adjusted raises to keep up.

5. Increased usage of Generative AI

Ever since the emergence of artificial intelligence, especially Generative Artificial Intelligence, at the end of 2022, it has found adoption in various industries as companies recognized its potential to transform operations and increase efficiency.

For 2024 and beyond, GenAI may spread rapidly through the economy and boost productivity growth. In fact, it could reconfigure a wide variety of jobs and potentially create new ones.

Though we don’t see AI displacing workers in 2024, it will impact hiring in multiple ways. Jobs creating AI tools and ones leveraging them for other roles, such as marketing, will likely surge—reshaping the way people work.

How Certain Industries Will Fare in 2024

According to Indeed data, job seekers are increasingly shifting their interest in jobs outside their fields. As such, quitting levels have increased compared to 2019 in certain sectors, such as leisure and hospitality, versus rates for professional and business services.

At the same time, employers changed their hiring plans in light of the slowing U.S. economy, shifting consumer demand, and high-interest rates. Now, previously high-flying industries, including finance, software, IT, marketing, and media, saw an uptick in layoffs and a decline in job postings. In contrast, sectors related to companies that offer in-person services, including restaurants, hotels, and hospitals, enjoyed robust hiring demand—and that may continue in 2024.

Tips to Prepare for the 2024 Job Market

The job market in 2024 will likely be highly competitive. However, with careful preparation and an understanding of industry trends, job seekers can set themselves up for success. Here are some tips to get started:

Research your industry

One of the best ways to prepare for the job market is to research the industries and companies that you are interested in. This will help you identify the skills and qualifications that employers are looking for, and it will also give you a better understanding of the current job market trends.

Update your skills

The job market is constantly changing, and it is important to keep your skills up-to-date. This may include taking continuing education courses, attending workshops, or learning new software programs. By actively seeking ways to upskill and reskill, you stay ahead of the curve and become more marketable to potential employers. Additionally, think creatively about transferable skills that are industry agnostic and how you can leverage your unique experience, skills, and values.

Network with professionals

Networking is an essential part of any job search, and it is especially important in the 2024 job market. Attend industry events, connect with people on LinkedIn, and reach out to friends, family, and colleagues for referrals. The more people you know, the more likely you are to hear about job openings. These days, capitalizing on employee referrals to get in to companies you’re excited about working with will go much further than an application.

Prepare your resume and LinkedIn Profile

Your resume and LinkedIn are sometimes your first chance to make a good impression on potential employers. These are the physical representations of your personal and professional brand and your value proposition, so it’s important to make sure that they are well-written, error-free, and present you as the industry leader or expert you are. Highlight your skills, experience, and achievements, focusing on the results you’ve been able to accomplish throughout your career as well as what makes you unique as this will help you stand out among the crowd.

Practice your interview skills

Interviews can be nerve-wracking, but there are a few things you can do to prepare and make sure that you put your best foot forward. Review your resume, your accomplishments, and your results and ensure you know your best, most impressive stories backwards and forwards. Practice your elevator pitch so you can deliver it confidently and directly. Prepare for any objections you think may come up in the interview so you can overcome them confidently. Make sure to practice either with a coach, a friend, or even with yourself by recording your answers and watching them back to see how you can improve.

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