The pandemic created challenging circumstances, but the labor market suffered several blows. The lockdown and social distancing mandates led several businesses to close
operations. A few others laid off their employees because they were not generating revenue and couldn't afford to pay salaries.
The overall economic downturn worsened this issue, causing uncertainty, resignations, and desperation. The vaccines have thankfully returned things to normal to some extent. Hence, the economy and markets are picking up pace again, leading to job creation and increased demand for employees.
This blog post will address some predictions for 2022, discuss challenges for hiring in today’s labor market, and present a few solutions.
Predictions for 2022 Labor Market
2022 is already nearing the end of the second quarter, so some labor market dynamics have become evident. The current situation and forecasts have provided several insights into the potential trends.
Here are the top labor market trends everyone needs to consider:
Employee Retention Will Fluctuate
Despite the economic downturn and high unemployment rate, employee retention is surprisingly low. Several employees are switching jobs more frequently, while organizations struggle to operate with consistent team changes.
This employee retention fluctuation will reportedly continue into the second half of 2022. They show that economy and workplace behaviors are undergoing changes, and you need to keep up. The more updated you remain about the work trends, the more likely you will adjust to changes.
Higher Demand for Work-Life Balance
The pandemic was an eye-opener for people who were devoting
their health and well-being to work. Two years of anxiety due to the pandemic helped them look at things differently and prioritize work-life balance.
Employers have repeatedly mentioned how several employees are demanding remote work or flexible work arrangements. They have also mentioned the presence of more assertive takes about PTO and other holidays.
Younger employees are demanding better work-life balance, and the trend will continue for the remaining year.
Increased Focus on Diversity
Businesses are making a conscious effort to be more diverse and inclusive during their recruitment process. They are also readjusting company culture and policies to promote inclusivity, adding necessary diversity training to increase awareness.
It is difficult to tell if a single event led to these efforts. However, there has been an increase in the demand for diverse workforces from younger employees. More companies are buying into the trend and taking the same actions.
Increase in Wages
The average wages in several states have increased, and there is a possibility of further wage changes across the country. The move makes sense considering the general rise in inflation and the recent changes in fuel prices.
There is no telling where the economy is headed, but a wage increase is a decision welcomed by the people it applies to.
The Challenges
A critical part of adjusting to labor market trends involves working with the challenges. Here are some of the primary challenges affecting hiring in today’s labor market that you need to consider:
The Great Resignation
47 million Americans left their jobs in 2021 despite the economic crisis. A phenomenon termed the Great Resignation by experts started before the pandemic but became significantly worse as we entered a new normal.
Several surveys show that many employees choose to quit rather than accept working conditions they deem unfair. The surprising part is that this preference has led to employees getting bargaining power despite high unemployment rates.
Demand for Remote Work
Employers used to argue against remote work previously, mentioning the potential risk to productivity. However, the pandemic's work-from-home requirement quickly proved the argument wrong as productivity grew rather than suffered while people worked remotely.
Offices are now opening back up; however, not everyone is willing to return. Of course, remote work only applies to people whose jobs can be done remotely.
Recovering Economy
Although the economy is in the process of recovering, it hasn't recovered yet. Several supply chain disruptions have yet to ease, and the world will need more time to adjust.
Potential Solutions
Most of the challenges mentioned above concern the entire labor market. You may not be able to solve the issue, but you can make organizational changes to adjust following are two important ways you can improve your situation:
Focus on Employee Retention
Increasing employee retention requires hiring suitable candidates and keeping them happy. You can use
post-employment testing to ensure you select the best people and design employee-centric policies to boost their satisfaction and happiness.
Incorporate Flexibility Where Possible
Try to incorporate flexible work arrangements where possible. Much of the Great resignation results from employers not accommodating valid requests and employees choosing to leave.
In short, hiring in today’s labor market requires incorporating work-life balance, flexible work arrangements, and adjusting salaries. You will need to review hiring policies to minimize the impact of challenges facing employers currently.
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