Eleven Labor Market Trends HR Professionals Should Prepare For

What is one labor market trend that we're experiencing now, or is about to unfold?

To help organizations stay ahead of labor market trends, we asked HR professionals and business leaders this question for their best predictions. From the continued expansion of remote work to early Baby Boomer retirements, there are several labor market forecasts that may help you prepare for what’s ahead. 

Here are eleven predictions for labor market trends: 

• Remote Work will Continue and Expand
• It is Truly a Job Seeker's Market
• The Gray Wave is Getting Bigger
• Geographic Wage Differentials
• More Talk About Retention
• Employers Standing Out Through Innovative Recruiting
• Workers want and need faster pay
• Hiring remote talent
• Software Engineers are moving
• Contributors Will Demand More Freedom
• People are not going back to the way things were

Remote Work will Continue and Expand
Businesses that embrace remote work now have access to a talent pool beyond their geographical boundaries. This opens up the opportunity to hire for less and get more, depending on the labor market they target. We know from experience that rewards don't come without risk and it's no different here. HR professionals that can navigate this new world by understanding the compliance complexities across states (and possibly countries) will be in high demand.

Dawn Myers, Founder & Partner, Guided Leadership Solutions

It is Truly a Job Seeker's Market
Much like the housing market in many areas of the US, the job market is experiencing certain parallels. Candidates are receiving multiple offers, salary counters are more prevalent, and interview "ghosting" seems to occur with every search. Employers need to quickly adapt to the current environment by being flexible, nimble, and efficient with their hiring processes. Remote or at least hybrid work is #1 on the list of requirements for many job seekers, often ranked well above salary and benefits. Organizations that are able respond effectively to the changing wants and needs of today's job candidates will thrive while those that do not adapt will struggle.

Jeffery Palkowski, Sr. Human Resources Specialist, University of Wisconsin-Madison

The Gray Wave is Getting Bigger
We've known for a decade that Baby Boomers were going to start retiring at record levels, but then we forgot about it, and Covid just made it much worse! One of the issues we are seeing in labor markets is a fact we've known about for a decade but didn't pay much attention to. The three largest segments of the Baby Boom generation will retire in 2021, 2022, and 2023, and many will go early because of Covid. So, on top of having an already short labor supply, we are seeing millions more leave the workforce over the next three years without any solution for replacement.

Tim Sackett, CEO, HRUTech.com

Geographic Wage Differentials
With COVID-19 necessitating a quick shift to a remote workforce, many employers didn't have time to update their compensation systems. Now as employers are finding a moment of stasis, they are grappling with the question of how to compensate employees who have moved to different parts of the country. The "right" approach to adjusting wages for geography is one that blends external equity (the need to successfully compete for talent) with internal equity (what is fair, transparent, and sustainable for the employees and the organization).

Jennifer Loftus, National Director, Astron Solutions 

More Talk About Retention
In discussions with our research advisory council, which is made up of talent and HR executives from employers representing millions of workers, one of the biggest priorities right now is retention. While hiring is all over the news and it's difficult to find talent, the easiest job to fill is one in which you don't lose the current employee! That's why we're doing research right now on what demographics of the workforce are specifically likely to be leaving, why, and what companies can do about it.

Ben Eubanks, Chief Research Officer, Lighthouse Research & Advisory

Employers Standing Out Through Innovative Recruiting
The economy is rapidly recovering, and businesses now face a new challenge—finding the staff they need to meet pent-up consumer demand. A number of external factors are keeping job seekers from returning to work, including childcare challenges, health concerns, and industry pivots. As seen in the record-low labor force participation rate, new job creation is outpacing worker engagement. This mismatch has put candidates in the driver’s seat. To stand out, employers are adjusting their recruiting processes in new and innovative ways. From exploring fresh talent pools and offering creative incentives to providing upskilling opportunities and doubling down on their employer brands, businesses across all industries are adapting. As the labor market continues to evolve, we’re sure to see companies iterating on these initial approaches to continue standing out.

Kelly Peters, Content and Communications Manager, JazzHR

Workers want and need faster pay
The labor market is experiencing an unprecedented shortage of workers with 90% of businesses saying it's difficult or very difficult to find workers right now. As a result, workers have more leverage than ever before when it comes to negotiating pay and benefits. One benefit trend that's gaining more and more traction is that workers want faster pay - either daily or weekly paydays instead of biweekly or monthly. It's estimated that as many as 70% of Americans live paycheck-to-paycheck. These workers need their earnings sooner in order to make ends meet and avoid taking on high interest debt like payday loans. We've surveyed over 2,000 workers and found that 90% of 1099 contractors want daily or weekly pay; 72% of hourly workers want faster compensation; and 64% salespeople want commissions within a week. Companies can stand out during the hiring process by adopting modern payroll solutions that speed up payday and support the financial health of their workforce. 

Ron Ross, Co-founder, Everee

Hiring remote talent
Hiring remote talent helps people in traditionally disadvantaged communities gain access to top jobs, regardless of their location. This shift is driving a transfer of wealth away from traditional population centers and into economically depressed regions. At a global level, it’s bringing a democratization of employment. We are starting to see a re-population and the economic revival of declining post-industrial regions. Remote work has also given employees seeking the benefits of regional relocation, an opportunity to move outside of major population centers and into more affordable satellite communities. 

John Mazzone, VP of Finance, Globalization Partners

Software Engineers are moving
Software Engineers and other highly technical members of the workplace are moving away from historical hubs for technology. More than ever, software engineers are no longer beholden to work in an office building. We can expect to see their cross-functional peers follow suit.

Brian O'Connor, Talent Acquisition Recruiting Manager, DailyPay

Contributors Will Demand More Freedom
Management as a discipline has been undergoing a slow but steady renaissance, getting reshaped for the 21st century. From its origins in Industry 1.0 - it has placed itself on the threshold of possibility of letting contributors free. Look closely at enabling humans and we can see how Employee Satisfaction moved towards Employee Engagement and for the past decade or so, is hovering around Employee Experience (EX). Now more than ever, this trend is set to reach a 'Tipping Point'. I'm really glad that HR is ready and prepared for this.

Anish Aravind, Co-Founder & Principal Consultant, SS Consulting

People are not going back to the way things were
In the midst of the Great Resignation, many people are leaving jobs but not jumping to new ones right away. People of all walks of life are taking time off to reflect and recover, especially after the stress of the past year and a half. With over 10 million open jobs, there are an abundance of options out there, but many people don’t want to go back to the way things were. Instead they want work environments that motivate them, align with their values, allow needed flexibility, pay fairly, offer benefits they need and appreciate, and allow them to achieve their best and grow their careers. People have always wanted these things, but in this labor market, they can choose the opportunities that provide them, and even wait until they find that opportunity. It will be up to People Operations teams to make sure job postings accurately describe the role and the perks available to attract the right talent.

Danny Speros, VP of People Operations, Zenefits

What labor market trends are you prepared for? Learn more about labor market trends impacting HR at SHRM21 and on the SHRM Blog.