Labor Market Trends That Shape Employer Expectations

EY-Parthenon EY Macro Pulse – August Employment via Lydia Boussour Labor conditions not collapsing, but visibly softening 📉 Cracks are increasingly showing in the economy’s main pillar – the labor market – as increasing operating costs and acute policy uncertainty push firms to keep a tight lid on new hiring. The labor market added only 22k jobs last month while the unemployment rate ticked higher to 4.3%, reaching its highest level since October 2021. Notable downward revisions to prior months’ job gains point to a weakening trend with US employment falling in June for the first time since December 2020 and the three-month trailing average of payrolls at a paltry 29k in August. 🏭 Industry details reveal that tariffs and uncertainty are significantly impacting goods-producing sectors and that services industries are not immune. At the government level, federal #job cuts continue to shrink the workforce, with 15k fewer jobs in August and 97k positions lost since January 2025. 📊 The Household Survey painted an equally soft picture, with the unemployment rate rising a tick to 4.3% and breaking out from its narrow range of 4.0% to 4.2% since May 2024. While many firms are choosing to retain their workforce during these uncertain times, performance-based and strategic #layoffs are increasing amidst lingering uncertainty and slowing consumer demand. The labor force participation rate edged higher by 0.1ppt to 62.3% but it remained well below its April 2025 peak of 62.6% as tighter immigration policies are increasingly restraining labor supply. 💵 On the wage front, average hourly earnings rose a moderate 0.3% while wage growth rate moved lower by 0.2ppt to 3.7% y/y. Employers’ continued focus on wage containment amid a slowing economy may lead to a further deceleration in wage growth toward 3.5% by the fall. ⚠️ Recent labor market indicators highlight a fragile balance: labor demand and supply have become subdued, while layoffs are rising. There are now fewer job openings than unemployed individuals and the hiring rate is near its lowest level since 2013. Labor market sentiment has also deteriorated, as shown by the Conference Board’s labor market differential – which tracks the gap between jobs plentiful and jobs hard to get—dropping in August to its lowest level since February 2021. 🔮 Looking ahead, labor market momentum is poised to remain subdued as firms—grappling with softer final demand, higher costs and interest rates, and elevated uncertainty—continue to restrain hiring. Job growth is expected to remain below trend, averaging around 30k per month through year-end and pushing the #unemployment rate toward 4.7% by December. 🏦 With labor market conditions becoming increasingly fragile and #Fed Chair Powell signaling openness to a rate cut in his recent Jackson Hole speech, an “insurance cut” at the September #FOMC meeting appears more than likely.

In today's rapidly evolving job market, advanced degrees like MBAs and Ph.D.s, once considered gateways to secure employment, are no longer guarantees of job security. Recent data indicates that professionals with higher education are experiencing longer periods of unemployment compared to their less-educated peers. Several factors contribute to this trend: -> Remote Work and Global Talent Pool: The rise of remote work has enabled companies to source skilled labor from around the world, often at lower costs, reducing domestic opportunities for advanced-degree holders. -> Shift to Skills-Based Hiring: Employers are increasingly prioritizing specific skills over formal credentials, leading to a diminished advantage for those with advanced degrees. -> Advancements in Artificial Intelligence: AI technologies are automating tasks traditionally performed by highly educated professionals, particularly in white-collar sectors, leading to job displacement. This paradigm shift underscores the importance of continuous skill development and adaptability. Professionals must proactively update their skill sets to align with current market demands. Simultaneously, employers should recognize the value of experience and invest in reskilling initiatives to harness the full potential of their workforce. As we navigate this changing landscape, a collaborative effort between individuals and organizations is essential to redefine career pathways and ensure economic resilience. https://lnkd.in/eCrENmce

🌟 𝗤𝟭 𝟮𝟬𝟮𝟱 𝗛𝗥 𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 🌟 As we close out the first quarter of 2025, here’s a look at the key trends shaping the HR job market: 🔹 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗪𝗼𝗿𝗸𝗳𝗼𝗿𝗰𝗲 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗧𝗮𝗸𝗲𝘀 𝗖𝗲𝗻𝘁𝗲𝗿 𝗦𝘁𝗮𝗴𝗲 Rather than rushing to hire, organizations are prioritizing internal mobility, skill-based hiring, and targeted capability-building. The focus is on getting the right people in the right seats—not just filling headcount, but future-proofing the business. 🔹 𝗣𝗮𝘀𝘀𝗶𝘃𝗲 𝗛𝗶𝗿𝗶𝗻𝗴 𝗮𝗻𝗱 𝗦𝗲𝗹𝗲𝗰𝘁𝗶𝘃𝗶𝘁𝘆 𝗔𝗿𝗲 𝗗𝗲𝗳𝗶𝗻𝗶𝗻𝗴 𝘁𝗵𝗲 𝗠𝗮𝗿𝗸𝗲𝘁 Nearly 50% of our placements come from passive channels—roles that aren't even advertised. Hiring is highly intentional, and companies are engaging with strong HR talent well ahead of business needs. Pipelining, not posting, is the new norm. 🔹 𝗗𝗲𝗺𝗮𝗻𝗱 𝗳𝗼𝗿 𝗛𝗶𝗴𝗵-𝗜𝗺𝗽𝗮𝗰𝘁 𝗛𝗥 𝗥𝗼𝗹𝗲𝘀 𝗜𝘀 𝗦𝘁𝗿𝗼𝗻𝗴—𝗯𝘂𝘁 𝗦𝗼 𝗜𝘀 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝗼𝗻 Functions like Total Rewards, People Analytics, and HR Ops are seeing high demand. Candidates must demonstrate strong commercial acumen and the ability to drive strategy and tech adoption, especially in an AI-driven environment. 🔹 𝗧𝗮𝗹𝗲𝗻𝘁 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻: E𝗮𝗿𝗹𝘆 𝘀𝗶𝗴𝗻𝘀 𝗼𝗳 𝗥𝗲𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗕𝗲𝗴𝗶𝗻𝘀 Companies are rebuilding leaner, more specialist TA teams, with deeper ties to key talent pools. 🔹 𝗔𝗜 & 𝗛𝗥 𝗧𝗲𝗰𝗵 𝗔𝗿𝗲 𝗥𝗲𝘀𝗵𝗮𝗽𝗶𝗻𝗴 𝘁𝗵𝗲 𝗙𝘂𝗻𝗰𝘁𝗶𝗼𝗻 AI continues to be the most talked-about trend. From automated recruitment to predictive performance management, organizations are investing in tools that enhance efficiency, reduce bias, and support internal mobility. 🔹 𝗟𝗼𝘄 𝗔𝘁𝘁𝗿𝗶𝘁𝗶𝗼𝗻, 𝗛𝗶𝗴𝗵 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗙𝗼𝗰𝘂𝘀 Voluntary attrition remains low, which makes passive candidate engagement more difficult. 🔹 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: 𝗨𝗻𝗱𝗲𝗿𝗴𝗼𝗶𝗻𝗴 𝗠𝗮𝗷𝗼𝗿 𝗖𝗵𝗮𝗻𝗴𝗲 Outdated metrics no longer cut it. Organizations are overhauling performance processes to align with business impact, capability-building, and ROI-driven outcomes. HR is playing a central role in redefining success. 🔹 𝗙𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝘃𝘀. 𝗥𝗲𝘁𝘂𝗿𝗻-𝘁𝗼-𝗢𝗳𝗳𝗶𝗰𝗲: 𝗦𝘁𝗶𝗹𝗹 𝗘𝘃𝗼𝗹𝘃𝗶𝗻𝗴 Most of our clients now expect 3 to 5 days in the office, but flexibility remains a key reason people move. Increasingly, the onus is on People Leaders to provide individual-level flexibility—a more human and tailored approach to hybrid work. 🔹 𝗛𝗥 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗕𝘂𝗶𝗹𝗱 𝘃𝘀. 𝗕𝘂𝘆 𝗗𝗶𝗹𝗲𝗺𝗺𝗮 As companies drive HR transformation, many are facing tough decisions: invest in up-skilling internal teams, or make external hires with future-ready skills? In some cases, we’re seeing reductions in force followed by strategic rehires to close capability gaps—particularly in areas like AI and workforce planning. 📩 Want the full report? Reach out to me directly and I’ll be happy to share #HRTrends #HRJobs

At #IndeedFutureWorks, I shared an overview of the latest US labor market trends and what they mean for employers. Here’s what employers need to know: --> The labor market has cooled — but we’re not in a recession yet. Employer demand is down from its post-pandemic peak, yet still sits above pre-pandemic levels. Layoffs are historically low, but hiring has slowed to levels last seen in 2013. Workers are staying put, which means fewer opportunities to backfill roles or grow teams. --> Labor shortages are on the horizon. With workers aging into retirement and prime-age labor force participation stalling, we’re heading toward shortages in many industries. Immigration has helped fill gaps, but interest from foreign workers is fading. Employers are responding with more visa sponsorships and broader talent searches. --> AI is reshaping — not replacing — jobs. The 2025 edition of our AI at Work Report shows that while all jobs are impacted by GenAI, only 26% of them are highly exposed, and human oversight remains essential. For employers, the message is clear: * Stay flexible and evolve with the market. * Build teams that can use and supervise AI effectively. * Let data guide your decisions in real time. Dive deeper into the insights from my FutureWorks session here: https://lnkd.in/gk6mZ_25

White-Collar Hiring Slumps as Economic Pressure, Not AI, Drives Job Losses Introduction Layoffs are rising and hiring is slowing across white-collar industries, fueling fears that artificial intelligence is already destroying jobs. But economists argue that AI is being used as a convenient scapegoat. The real drivers behind today’s weak labor market are high interest rates, policy uncertainty, and tighter corporate budgets, not widespread automation. What the Labor Market Is Signaling Clear Signs of Weakness Unemployment rose to 4.6 percent, while job seekers now outnumber available openings. Long-term unemployment is increasing, entry-level hiring is slowing, and career ladders inside companies are flattening. Healthcare and construction remain the only sectors showing meaningful job growth. Why AI Is Taking the Blame Companies are publicly embracing AI as part of “efficiency” strategies, unnerving workers. High-profile firms are using AI tools to streamline tasks, reduce headcount growth, and reshape hiring. A popular chart linking declining job openings to ChatGPT’s launch has amplified fears of immediate displacement. The Economic Reality Behind the Slowdown Interest Rates Are the Dominant Force The federal funds rate rose more than five percentage points between 2022 and 2024, sharply increasing borrowing costs. Higher rates make expansion, hiring, and long-term investment more expensive for businesses. Federal Reserve Beige Book reports consistently cite rates and inflation, not AI, as reasons for layoffs and hiring freezes. Tariffs, Policy Uncertainty, and Labor Constraints Rapidly changing trade policies and tariffs are discouraging corporate investment. Declining immigration is reducing labor force growth. Corporate cost-cutting campaigns have been framed as productivity gains rather than financial necessity. Why AI Is Not Yet the Main Culprit Economists say AI adoption is uneven and still immature in most industries. Evidence of AI-driven job losses is limited to narrow areas like call centers and accounting support roles. Both skeptics and optimists are likely overestimating how fast AI will reshape employment. Why This Matters The current white-collar downturn reflects macroeconomic tightening, not a sudden AI takeover. While automation will eventually disrupt jobs, today’s hiring slump is rooted in high interest rates, tariffs, and corporate caution. Misdiagnosing the problem risks misguided policy responses, when the real lever for recovery remains monetary conditions and economic stability—not chatbots. I share daily insights with 35,000+ followers across defense, tech, and policy. If this topic resonates, I invite you to connect and continue the conversation. Keith King https://lnkd.in/gHPvUttw

We’ve wrapped up the holiday season and stepped into 2025, what does the data tell us about where we’re headed? Our December SmartMatch Employment Report shows that while overall employment was up 7.6% YoY, we saw a slight dip of -0.1% MoM, the first in over a year. Median hourly wages continued their steady climb, reaching $42.20 (+4.5% YoY), but not all sectors felt the same momentum. Winners: Tech: Median hourly rate hit $63.50/hour (+3.7% MoM). Demand for skilled talent shows no signs of slowing. Construction: Annual wage growth of +6.9% YoY highlights the resilience of this sector. Lagging sectors: Retail & Hospitality: A soft holiday season with just +3.8% YoY employment growth and wages dipping -0.1% MoM—proof that consumer confidence impacts business decisions. Casual workforce: Employment rose +13.3% YoY, but average hours dropped significantly (-10.7% QoQ), showing more shifts, but fewer hours. What stands out to me? Workers aged 45–54 saw the highest wage growth (+5.5% YoY), but younger employees (18–24) saw reduced hours (-1.3% YoY), indicating that employers may be opting for experience and stability in uncertain times. This data shows that while optimism remains, businesses are still navigating increased costs, compliance pressures, and shifting workforce expectations. The question for 2025 is: how do we build resilience and growth? Check out our full report here: We’ve wrapped up the holiday season and stepped into 2025, what does the data tell us about where we’re headed? Our December SmartMatch Employment Report shows that while overall employment was up 7.6% YoY, we saw a slight dip of -0.1% MoM, the first in over a year. Median hourly wages continued their steady climb, reaching $42.20 (+4.5% YoY), but not all sectors felt the same momentum. Winners: Tech: Median hourly rate hit $63.50/hour (+3.7% MoM). Demand for skilled talent shows no signs of slowing. Construction: Annual wage growth of +6.9% YoY highlights the resilience of this sector. Lagging sectors: Retail & Hospitality: A soft holiday season with just +3.8% YoY employment growth and wages dipping -0.1% MoM—proof that consumer confidence impacts business decisions. Casual workforce: Employment rose +13.3% YoY, but average hours dropped significantly (-10.7% QoQ), showing more shifts, but fewer hours. What stands out to me? Workers aged 45–54 saw the highest wage growth (+5.5% YoY), but younger employees (18–24) saw reduced hours (-1.3% YoY), indicating that employers may be opting for experience and stability in uncertain times. This data shows that while optimism remains, businesses are still navigating increased costs, compliance pressures, and shifting workforce expectations. The question for 2025 is: how do we build resilience and growth? Check out our full report here: https://lnkd.in/gwMTKbSf

ICYMI: Last Thursday, we learned that job cuts in January increased to their highest level in 10 months and more than doubled from the previous month. But then, the very next day, the Labor Department announced that the US added an eye-popping 353,000 jobs, almost doubling expectations. So what gives? It’s an undeniable sector shift, a change in labor demand, and both job seekers and employers are navigating this reality. Most of the job shedding is coming from the tech sector. Post-pandemic overhiring, a tight market for investment capital and the proliferation of AI have led to a record number of lay-offs in an otherwise good job market. And the sectors adding jobs? Professional and business services, health care, retail, government, social assistance and manufacturing. So what does this mean for employers that are hiring and talent who are looking? A lot, actually. Job seekers with experience in tech companies must consider what may be different about employers in a new sector. While job roles may look similar, hiring practices and processes may differ. Where do these industries typically post jobs? Where do people in these industries typically network? How may the culture and values of these companies differ? How does one find out? Employers in these industries, like manufacturing and healthcare, looking for candidates in a job market filled with talented tech job seekers must ensure they attract and hire the best. Job seekers list progressive cultures and benefits as key reasons they previously worked at tech companies. They seek to understand an employer's complete package before they choose where to apply. Many tech companies have evolved recruitment marketing and employer brand strategies that have helped them attract and retain top talent over the last few years. The most coveted candidates will expect the same from an employer in a new sector.  Successful talent acquisition requires candidates and employers to align not only on skills and experience but also on culture and values. As candidates and employers consider recruitment across new sectors, it will be interesting to see how both sides rise to the occasion. If you’re a hiring manager or looking for a role, I’d love to hear your thoughts. What do you look for when it comes to crossing sectors?

For more than a decade, employees have held the advantage in the workplace. That era is ending, and most people aren’t ready for what’s next. Since 2010, the labor market has been shaped by a historic bull run. Employees entering the workforce during this time have known one dominant theme: employers competing for talent, prioritizing flexibility, and building cultures centered on experience. For many, that has been the only version of work they’ve ever encountered. The shift we are seeing now reaches beyond layoffs and headlines. It marks the return of structural pressure—and with it, a very different day-to-day reality inside the workplace. Recent data shows the early signs of this shift: • A 5% drop in employees who believe leaders demonstrate integrity • A 3% decline in confidence around transparency in decision-making • A 4% decrease in belief that coworkers protect more vulnerable team members These are not abstract metrics. Instead, they point to a real breakdown in trust as uncertainty rises. As power dynamics shift, the effects often surface in subtle but important ways. Employees begin to question decisions, hesitate to speak openly, and focus more on self-preservation than team support. When alignment starts to erode, organizations can either ignore the signals or respond with intention. These three essentials can help employers and employees adapt before small misalignments become lasting damage: • Making the shift explicit, so expectations are reset in real terms • Reinforcing trust behaviors when confidence is low • Recalibrating transparency and communication to reflect the workplace people are in today—not the one they entered a decade ago This is a cultural inflection point that will define how people experience work for years to come. Leaders who engage with this shift early, rather than reacting to its fallout, will be the ones shaping what comes next.

Today's labour market data from the ABS presents a mixed picture. While employment shows resilience, rising underemployment and a steady unemployment rate reveal a more complex reality for employers and HR. Key Data Points: 1. Unemployment Rate: Steady at 4.2%. However, the Roy Morgan estimate puts "real unemployment" at 9.1%, down 1% from July, double the ABS estimate, aligning more closely with the ABS unemployment and under-employment figure of 10.5%. 2. Participation Rate: Record high at 67.1%, showing strong workforce engagement. 3. Employment: Increase in part-time roles by 50,600, with a decline in full-time positions by 3,100. 4. Underemployment Rate: Slight rise to 6.5%. 5. Youth Unemployment: Remains at 9.8%. It's important to remember that Australia's labour force has grown significantly in the past year, with a population increase of 684,000, more than double the average annual growth over the last 25 years. This has driven workforce growth to over 15.7 million, leading to a rise in employment by 640,000. While 'real' unemployment is down by 263,000 to 9.1%, a high 18.6% of the workforce (2.92 million people) remain under-utilised. Despite positive trends, tackling persistent unemployment and underemployment remains a critical priority for the government. Here’s what this all means for you: Despite the economic slowdown, demand for labour remains high so employers are should approach hiring cautiously, balancing the need for talent with cost efficiency. Boards are increasingly focused on cost control, driving a push towards automation and AI to optimise workforces. Sectors such as construction, healthcare, energy, and technology continue to face skills shortages, creating pressure for wage inflation in these areas. With a more competitive market, developing internal talent and creating robust CRM nurture strategies are key to future-proofing the workforce. A strong employer brand highlighting workplace culture, flexibility, and benefits will continue to be crucial in attracting and retaining top talent. With annual growth at its slowest pace since the early '90s recession (excluding the pandemic period), consumer spending is down, affecting business investment. Evidence suggests companies are "hoarding" workers by reducing hours instead of redundancies, potentially delaying but exacerbating future unemployment spikes if conditions worsen. While inflation is easing, wage pressures persist, particularly in sectors experiencing skills shortages. HR leaders must navigate the risk of a wage-price spiral carefully. The August labour market data reflects an economy in flux. While employment figures are holding, underlying factors like economic slowing, labour hoarding, and rising underemployment signal that caution is warranted. For HR leaders and talent acquisition teams, the path forward involves a mix of agility, strategic planning, and a proactive focus on employee well-being to navigate this evolving landscape effectively.

One of the best reports that exist. Huge fan 🙋🏼♂️ What is it about? The World Economic Forum’s bi-annual Future of Jobs Report has followed evolving technological, societal, and economic trends to understand occupational disruption and identify opportunities for workers to transition to the jobs of the future. The report comprehensively analyzes the interconnected trends shaping the global labor market. Key Takeaways: 🎯 Broadening digital access is expected to be the most transformative trend with 60% of employers expecting it to transform their business by 2030. 🎯 Increasing cost of living ranks as the second most transformative trend overall with half of employers expecting it to transform their business by 2030. 🎯 Climate change mitigation is the third-most transformative trend overall while climate change adaptation ranks sixth with 47% and 41% of employers, respectively, expecting these trends to transform their business in the next five years. 🎯 Two demographic shifts are increasingly seen to be transforming global economies and labor markets: aging and declining working-age populations, predominantly in higher-income economies, and expanding working-age populations, predominantly in lower-income economies. 🎯 Geoeconomic fragmentation and geopolitical tensions are expected to drive business model transformation in one-third (34%) of surveyed organizations in the next five years. Impact on the Labor market: 🎯 On current trends over the 2025 to 2030 period job creation and destruction due to structural labour-market transformation will amount to 22% of today’s total jobs. The creation of new jobs is 14% of today’s total employment, amounting to 170 million jobs. This growth is expected to be offset by the displacement of the equivalent of 8% (or 92 million) of current jobs, resulting in net growth of 7% of total employment, or 78 million jobs.  🎯 Frontline job roles are predicted to see the largest growth in absolute terms of volume. Care economy jobs and Personal Care Aides are also expected to grow significantly over the next five years, alongside Education roles such as Tertiary and Secondary Education Teachers. 🎯 Technology-related roles are the fastest-growing jobs in percentage terms as well as Green and energy transition roles. 🎯 Clerical and Secretarial Workers are expected to see the largest decline in absolute numbers. Similarly, businesses expect the fastest-declining roles to include Postal Service Clerks, Bank Tellers, and Data Entry Clerks. On average, workers can expect that two-fifths (39%) of their existing skill sets will be transformed or become outdated over the 2025-2030 period. Data set: This year’s edition captures the perspectives of over 1,000 employers – representing more than 14 million workers across 22 industry clusters and 55 economies. #economy #labormarket #jobs