The latest labor market data confirmed that the job market remains remarkably resilient. In January, the U.S. economy added an eye-popping 517,000 jobs and the unemployment rate fell to 3.4%, the lowest in more than a half-century.
Still, even in a strong job market, fortunes vary as evidenced by recent layoffs at companies like AmazonAMZN +1.9%, Disney and Salesforce. So, if you want to switch jobs this year, you'll need to be as strategic as ever in your search.
To help you better understand this somewhat puzzling job market, I read through several recent labor-market reports. Here are my main takeaways, along with a few tips on how to make the most of these trends.
The State of the Labor Market. There are more openings than workers. The December Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Bureau of Labor Statistics says there are 1.9 jobs available for every person seeking one. The main drivers behind this are the aging of boomers, curtailed legal immigration and declining population growth. Given the deep-seated and long-term supply dynamics, Indeed and Glassdoor economists say it's unlikely that the talent shortage will ease anytime soon.
2. Remote work is here to stay. But expect fewer fully remote opportunities. Earlier this month, The Wall Street Journal reported that the return-to-office rate — a measure of office occupancy in 10 major U.S. cities — exceeded 50% of pre-pandemic levels for the first time since early 2020.
This doesn't mean employers have abandoned remote work, but more are moving toward hybrid models that require employees to be in the office at least part of the time.
Tip: As more employers adopt hybrid employment models, be sure to ask if a job is remote, in-person or hybrid before accepting an offer. Not all virtual jobs are fully remote, so read job postings closely and ask smart questions in the interview. Be aware that FlexJobs found that most of its "remote job" postings in 2022 required employees to work in a specific region, city or state.
3. Pay increases are solid but slowing. As the labor market emerged in spring 2021 from the initial economic shock of the Covid-19 pandemic, wages and salaries started to rise. They are still rising, most recently at a 4.4% annual pace.
This squares with data from the Indeed Wage Tracker, which is based on Indeed.com job ads. It found that 82% more job sectors slowed wage growth in November than they did six months earlier. Given the current trajectory, Indeed says that posted wage growth should return to its 3% to 4% pre-pandemic pace by the second half of this year.
Tip: Do your research when negotiating a salary for a new job. Talk with your network, check sites like Salary.com and Glassdoor.com, and scour job postings (a number of states require employers to post compensation ranges when advertising jobs) to set a realistic salary range. Don't forget to consider the value of benefits, such as retirement savings, gym memberships and health insurance. Employers increasingly highlight benefits to compete for talent.
Job Search Trends. Video interviews are here to stay. According to the 2023 Career Industry Trends Report — a summary of findings from a career-service providers' annual meeting called Career Jam — 82% of employers implemented video interviews because of Covid-19, and a whopping 93% of them say they plan to continue to do so.
Additionally, some job boards include an option for employers to pose questions to candidates via video and LinkedIn has "Demonstrate Skills," which allows individuals to write or record videos to demonstrate select skills.
Tip: Incorporate video into your LinkedIn profile. Doing so will help to build your brand and demonstrate your proficiency with technology, an especially important skill for older job seekers to tout.
5. Hiring managers prize skills over degrees. Companies like WalmartWMT -0.2%, GoogleGOOG +1.2%, Apple and IBMIBM +1.8%, as well as some state and local governments, have pledged to implement skills-based practices. This means that if you've got the skills, your lack of a degree may no longer be the deal-breaker it once was in some roles. The trend is still emerging, but career services providers report seeing more job postings requesting a degree "or equivalent experience."
Tip: Once you have your eye on a job, identify specific skills needed to land it. If you lack them, try short-term courses and certificate programs offered by industry associations, community colleges and sites like LinkedIn Learning, Coursera.org and EdX. The Trends Report says more than 10% of U.S. workers in low-paying jobs — many without a degree — landed higher-paying work in the last two years by "upskilling" in this way.
After acquiring the right skills, highlight them prominently on your resume, in your LinkedIn profile and during any interview.