The latest employment numbers continue to offer more confusion, than answers. The unemployment rate dropped to 4.2%, up from the lowest rate of 3.4% in April of 2023, but slightly down from the elevated 4.3% in July, reversing the upward trend caused by higher interest rates. Still, the hiring rate decreased about 30% from the average of the last 12 months, and June and July numbers were revised down by 86,000. Perhaps, a part of why it happened was the number of people settling for part time work. In August, full-time workers’ numbers decreased by 438,000, but the part-time workers’ numbers went up by 527,000. For a while, job postings were telling a different story. To this day, many companies with no ability to hire post jobs on their sites and on job boards. While at first, it seems like a misrepresentation of facts, the reality is quite different. Companies want to hire, and in some situations, even need to hire, before their overloaded and overworked current employees break down, but the unpredictability of the current market is causing their C-level executives and boards to suspend all new headcount.
Another factor is that for well over a decade, most companies hired staff from staffing and consulting companies. In this market, paying 20-25% of salary or an extra 30%+ on consulting fees, just doesn’t seem attractive for companies. With the overly complicated advances in technology, it’s no longer possible to just talk to people with the required skills. The prescreening of misrepresented proficiencies is a very time-consuming process, not fit for automated ATS systems, plus most internal recruiters have been laid off, along with many HR reps, who mostly never excelled at qualifying technical resources in either case. Meantime, existing technical staff is already overworked, wearing multiple hats, trying to compensate for shortage of employees. Hence, a hiring manager may do an occasional search on LinkedIn, not investing too much time in the process, as getting a hiring approval after finding that ‘diamond in the rough’ candidate, picture-perfect aligned for their need, is still a task from Mission Impossible, rather than business as usual.
Generally, there are 2 types of open positions: replacement roles, mostly with higher urgency, as work goes undone; and growth ones, where upcoming new projects are demanding to hire additional workers, or even entire teams. The pressure to fill replacement positions is always higher, and here is a useful bit of recent statistics: workers are staying put and not leaving.
Some of the most common reasons for leaving are: career advancement, learning new skills, an increase in pay, and overall stagnation. Contract end and layoffs tend to be ahead of other motivations. Less common ones include relocation; a change in management, causing subordinates to leave, sometimes following the existing boss to the new place, or just not getting along with the new boss; company or department closing; and a change in direction or responsibilities. While all of those seem like great reasons to look for a job, the difficulty in finding a better role usually turns people off, causing them to stay and wait till thing improve.
Another major reason, arising from the pandemic, is remote work. Many workers relocated far from their office to less expensive states, or simply places with a different standard of living. The dynamic marketplaces of New York City or Los Angeles attract many job seekers, but a good part of them would rather avoid the foot traffic of the former, or the car traffic of the latter, plus the unusually elevated rent prices. Finding a new remote job has gotten so tough, that most people will not ever risk their current job, if it’s currently remote, often ignoring a slew of minor imperfections.
Leaving a stable job for something new, which may seem exciting, but less reliable in this market, just doesn’t seem like a winning strategy. GenAI hasn’t replaced too many roles yet, although companies like Klarna are already bragging about the trend. Yet, the uncertainty on how soon this tendency will take over most functional and many technical roles is causing for candidates to fear a layoff by companies, looking to lighten their payroll and office rent in favor of LLMs.
Bonuses are usually paid by companies in the first quarter. After being paid for last year’s work, a lot of employees make their moves. So it was in the days past. 2023 bonuses were down as much as 36% from 2022, and thus far, despite the stock market frenzy in 2024, it’s anyone’s guess, what will happen in 4-5 months. Even if bonuses bounce back after 2024, the motivation of trading imperfection for uncertainty isn’t as great.
Those are the main reasons there is a lack of replacement roles with a clear urgency to hire. Growth roles are also hard to come by, as high interest rates often cause companies to skip improvement projects, in favor of waiting to see, if GenAI will finally become capable enough to replace hires, or when interest rates will finally come down.
With all those factors, it may appear that looking for a job, short of being laid off, isn’t a great idea in 2024.
The reality is likely as different as can only be imagined.
The last time technology underwent such a revolutionary transformation was 2001. Y2K was over, parting ways with decades of mainframe-based computing. J2EE and JavaScript revolutionized web and application development, despite the .com bubble bursting, often laying groundwork for e-commerce commercialization. The .net framework automatically created n-tier architecture. PHP left ColdFusion, as a distant memory. Python made PERL seem overly complicated and incapable of handling web work.
Not so different from the industry leaders above, all companies will soon lose their ability to generate revenue without offering chatbots; LLM-powered platforms; ML and NLP-based replacements for complex algorithms, which carried the development efforts for so long; and RPA-directed robots. Companies will be sure to engage in partnerships with industry leaders or just close doors, but what about their employees? Even now, toward the end of 2024, lack of AI skills makes it difficult to get traction in job search efforts, but in another year or so, purely traditional stack expertise will seem just a tad more attractive, than Cobol skills did in 2001. There won’t be a government directive to embrace new technology, as there was leading to Y2K, but markets determine trends far more than government compliance in either case. Staying put in a job for the sake of stability may provide some temporary relief, but long-term effect will be substantially felt in ways, far worse, than procrastinating after college graduation.
In addition, layoffs tend to affect projects and employees with skills least relevant to companies’ goals. No matter how loyal, or even inexpensive, you may be, if your skills suddenly become obsolete, there will be no incentive for any firm to keep you on staff. Only by acquiring the in-demand skills, in any economy, can you assure, that you will not be viewed as disposable.
That’s not to say, that short-term contracts should suddenly become attractive, and people should abandon their jobs for a pay cut with sinking startups to work with newer technologies and methodologies. Good judgement should still be applied. Putting food on the table, and paying rent and mortgage on time, still come first. Yet, lack of moving forward in your career and not learning and daily applying the current essential new trends in this market is reminiscent of the White Rabbit telling Alice, that momentarily stopping equates to moving backwards, and merely slowing down is akin to remaining in the same spot.
