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The US job market witnessed a lot of ups and downs in the last two years. From people losing jobs in 2020 to the great resignation in 2021, the market’s instability impacted employers, employees, and job seekers. After rigorous efforts from the government and employers, 2022 looks promising in most aspects. In this article, we will have a look at what the US job market would look like this year. But before that, let’s recap the US labor market in 2021 to analyze the changes better.
- The changed US government was expected to deliver good news for immigrants in terms of more jobs and opening up borders to allow more immigrant students and workers in the country.
- The number of freelancers in the US has increased to 57 million.
- The workforce also witnessed more White females coming back to the labor force compared to men and Black females.
- Location-independent hiring through LinkedIn increased by about 10%.
- About 50% of the professionals aged more than 55 retired from the US workforce in 2021.
- The US government also ended the provision of unemployment benefits to the unemployed population in 2021.
Now let’s have a look at what the US labor market is expected to look like in 2022.
The Great Resignation
The Great Resignation that began in 2021 is expected to not only continue, but also increase this year. According to Melissa Dexter from Uprise Health, “people are more aware of their mental health needs post-pandemic and there has also been a philosophical change in the perception of work”. The Great Resignation has influenced a change in the ways of working that can further be described by the “The Great Reimagination”, “The Great Reset”, and “The Great Realization.” This has resulted in many people leaving their jobs and moving to a career more aligned with their needs and preferences.
Joblist’s data shows that about 74% of the currently employed professionals are planning to quit their full-time jobs while 51% may leave their part-time roles in the next 12 months. Most employees are now seeking flexible work for a better work-life balance. This has also resulted in companies striving to be ‘desirable employers’. For this, most of them have moved to a hybrid or remote-only format.
The Rising Rate of Freelancers
In the last couple of years, freelancing has become one of the most sought-after ways of employment. It allows professionals to work at their pace, on their own terms and conditions. As seen last year, the number of freelancers rose to about 50 million. This year, this number is expected to go even higher to 70.4 million. The steep rise indicates the favorability of freelancing.
It is expected that more than half (approx 64%) of these professionals will be under the age of 34 while only about 21% of them would be over 45. The freelancing industry is growing at a fast pace and currently contributes about $1 trillion to the US economy. This is approximately 4.8% of the US GDP. In the coming years, it is only expected to grow. Freelancing has gained momentum due to the following reasons:
- It allows you to control your workload.
- You get a chance to work on different projects with varied clients, avoiding monotony.
- It gives better control of your rates/wages.
- It is an extra source of income for employed professionals.
- It allows you to enjoy permanent work from anywhere in the world.
Increase in Immigrant Workers
The number of immigrant workers was expected to increase last year. However, due to the previous government’s policies and COVID restrictions, the net international migration in 2021 was at the lowest levels in decades. However, the speeding up of visa processing and opening up of borders could soon increase the number of immigrant workers in the US. Additionally, the government is also looking to modernize H1B Visa requirements and ease F1 visas for students.
Immigration is also said to solve the labor supply shortage in the US. If immigration had continued at the same pace as the pre-pandemic level, there would have been two million additional immigrant workers in occupations like manual labor and computer science. In December 2021, the government announced that they would be adding 20,000 seasonal guest worker visas to the allotment of 33,000 for the winter to support jobs like landscaping, construction, and hospitality. These are some of the industries that are in dire need of workers.
Remote work is said to be more satisfying and flexible for most employees. According to a survey, about 97% of the employees don’t want to go back to offices full time. Most employers are aware of this changing need. This is why they have introduced remote work or hybrid mode of work for their teams. This has resulted in location-independent hiring and easier interviewing processes. As a result, candidates are open to applying to all their desired positions which were earlier unavailable due to their location. For example, an Indian job seeker is eligible to apply for a position based in Germany, where they can work at their convenience from their homes in India.
More Diversity and Inclusion
As mentioned earlier, employees are now more aware of what they want and need. Diversity and inclusion is one such initiative. Experts say that job seekers will be looking for employers who are actively working on enhancing D&I initiatives at their companies. The Board of directors will take a data-driven approach while relying heavily on D&I data to develop strategies and implement them. This will open up new opportunities for many candidates from diverse backgrounds, also helping companies hire the best available talent.
Four-Day Working Week
After embracing the remote and hybrid models of working, many companies are ready to hop on the ‘four-day working week’ train. Some companies in Japan, New Zealand, Spain, Scotland, Ireland, and Belgium are now allowing their employees to work four days a week without taking a salary cut. The goal is to give employees more freedom to work on their terms and get more time off from work. While this is quite new in the US market, one can expect many companies to adopt this in the long run. In fact, some companies like Dockwa are already on board and may introduce this new system of work soon. Some benefits of introducing a four-day working week are:
- Higher productivity in employees
- Better employee engagement
- Enhanced mental and physical wellbeing
- Reduced overhead and other costs to business
- An improved work-life balance
- Higher employee retention
Employers competing for the best talent
The days of employers having an upper hand over employees have long gone. With a supply shortage in the US, employers are struggling hard to retain their talent. For this, they are looking at ways to improve employee experience and satisfaction. One of these ways is the hike in salaries that candidates can expect. In 2022, U.S. companies are expecting to pay an average of 3.4% raise to their employees. In fact, some of them are also open to paying hikes of 5% or more. Some other initiatives that companies are working on include career advancement, mental and physical health, social security, allowances, paid vacations, and more.
Fastest and Slowest Growing Industries
Some of the industries expected to grow at a high rate in 2022 in the US are:
- Theatre and Drama
- Travel Insurance
- Travel Agencies
- Information Technology
- Real Estate
- Financial Services
Some industries that may witness slow or no growth in 2022 are:
- Unmanned Aerial Vehicle (UAV) Manufacturing
- Record Stores
- Coffin and Casket Manufacturing
- DVD, Game, and Video Rental
The growth of the above industries is based on different factors like consumer demand, changing consumer preferences, technology innovation and application, and the availability of substitutes. For example, the healthcare sector is continuously growing at a high rate due to the changing technology and innovations. Tech has made healthcare more accessible, cheaper, and more convenient for consumers. On the other hand, evolving technology has also resulted in the declined growth of many industries like record stores and DVDs & games. With technology, movies, series, and games are at your fingertips, only a download away.
The US job market has experienced major highs and lows in the last couple of years. However, it wouldn’t be wrong to say that it is now on its path to recovery. While there are many industries that are doing well, there are some that are struggling to find the right talent. So in terms of opportunities, there is a vast pool that is yet to be tapped. Additionally, the awareness about employee wellbeing and mental health has also risen in the last couple of years. This means that most companies will take measures to keep you sound and safe, mentally and physically. If you are a job seeker looking to find your dream role in the US, 2022 may be your year!