More than three years after the first alarm bells were sounded over COVID-19, the effects of the global pandemic are still rippling through the economy. In the past three years, a substantial number of workers have changed careers, gone back to school, or otherwise sought better working situations. This seismic shift in the labor market has upended the hiring process and could have lasting effects on the job market.
In this blog, we’ll evaluate the shift in the labor market and how it might affect today’s job seekers. Here’s what we’ll cover:
- What is the shift in the labor market?
- Why is this shift happening?
- How does the current hiring situation affect job seekers
- Tips for a successful job search in today’s labor market
What is the shift in the labor market?
The shift in the labor market is a general term used to refer to a number of new trends including a change in the average number of hours worked, the number of people in the workforce, the number of jobs available, and the competition for those jobs.
How did the shift begin?
Since all labor markets are slightly different, for the purpose of this blog, we’ll focus on the American labor market for which there are many statistics including the Labor Department’s monthly jobs report.
It comes as no surprise that the global economy took a hit during the pandemic. The United States GDP fell by almost 9 percent in the second quarter of 2020 – a drop not seen in 70 years. That dip in the production of goods and services was the result of companies adapting to the changing conditions.
Many hospitality businesses, like bars and restaurants, were forced to close, either by temporary shutdowns or because of a lack of customers. Meanwhile, other workers, like nurses or delivery drivers, found themselves on the brink of burnout because of the increased need for their skills and services. For office workers, the pandemic largely meant a transition to remote work. While many employees had been pushing for more flexible working conditions for years, the pandemic pushed companies to give it a shot. Many people discovered they were just as productive with more free time to spend with family.
The combination of all of these situations led to a shift in attitudes towards work and the types of opportunities people began to look for. Furthermore, almost one percent of the American working-age population stopped working during the pandemic and hasn’t returned. Many people retired early, went back to school, or decided to care for family full-time. A lack of workers is one of the biggest factors driving the current shift in the labor market, according to U.S. News & World Report.
Why is the shift in the labor market happening?
The current shift in the labor market is a result of the fact that there are more job openings available than there are candidates to fill them. As of December 2022, there were almost two job openings for every applicant, with an unemployment rate of 3.4 percent, its lowest level in half a decade.
Businesses are struggling to find and hire new workers, with 51 percent of small businesses reporting openings they couldn’t fill. At the same time, many companies can’t keep the workers they do have. A record number of employees have quit their jobs due to burnout or lack of flexibility.
While a lack of job seekers is partly to blame, there’s another factor at play: many employees are working fewer hours at their current jobs, according to Harvard Business Review. The pandemic changed people’s attitudes towards work, with many cutting back hours at the office to spend more time with family or pursue leisure activities.
How does the shift in the labor market affect job seekers?
The current shift in the labor market means that the demand and supply of workers are out of balance. On the surface, there are plenty of opportunities for qualified candidates. Many employees are quitting and companies are actively looking for people to replace them.
However, the reality is a bit more complicated. There is a lot of churn in the labor market and competition for positions is steep. Companies are looking for the single best person to fill their needs. Companies are choosing candidates carefully and making sure to fully evaluate their skills and training so that they don’t lose money hiring the wrong person.
5 Tips to succeed in your job search in the current labor market
- Be flexible. As the labor market shifts, it's important to be open to different industries and occupations. Consider expanding your job search to include industries that are growing and occupations that are in demand.
- Invest in your skills and training. To remain competitive in the job market, consider investing in additional training or education that can help you develop the skills that employers are looking for. This could include taking online courses, attending workshops or conferences, or pursuing a certification in your field.
- Tailor your job search. When applying for jobs, make sure to tailor your resume and cover letter to each position you apply for. Highlight the skills and experiences that are most relevant to the job and show how you can add value to the organization.
- Network. Networking can be a valuable tool in finding job opportunities, especially in a tight labor market. Reach out to contacts in your industry or join professional associations to expand your network and learn about job openings.
- Be patient. With increased competition for jobs, it may take longer to find employment. Stay positive and persistent in your job search, and consider taking on temporary or contract work in the meantime to build experience and connections.
- The current shift in the labor market is the result of employees’ changing attitudes towards work and new, flexible working situations brought on by the pandemic.
- While there are plenty of jobs available, competition for those jobs is steep, with employers spending more time evaluating each candidate before hiring.
- To improve your chances of landing the interview, make sure to invest in your skills and training so that your resume shows you can meet the needs of a potential employer.