The Most Unexpected Trends of the Labor Market In 2023

Prologue

Out from 2022, and in with 2023. With it, a new job market. In this article, we’re going to break down what the labor market is going to look like this year and how to best take advantage of what’s coming our way. 

So, first of all, a big happy new year and let us welcome you to 2023 in the great labor market that’s about to unfold in front of us. As 2022 goes down, it’s probably one of the most exciting years we’ve experienced so far as the labor market is concerned. This whiplashing effect back and forth. Whether it is the employer market or the employee market, all of you have lived through this.

We’ve seen just the craziest things going on and as we first started off this year we ran a major economic boon and it was an employee-driven market. So, employees were in high demand just about across every industry wage growth was through the roof, we were seeing people getting multiple offers, bidding wars, and especially those who were in high-demand jobs like tech, and other places where they just couldn’t hire enough people quickly. 

Unfortunately, this advantageous labor market seemed to come to an end very abruptly, almost as quickly as it started. Not really that fair to the employee but, such as life. This implant pendulum swings back and forth, the pendulum was firmly in the employee’s side at the start of the year, we get to the mid-point of the year, and now swinging kind to the center, and then at the end of the year, as we finished into 2020, that then end of 2022 and now here into 2023, the pendulum seems to have swung somewhat drastically into the other direction.

Now, this isn’t for all industries, but I think in a lot of industries we’re seeing major corrections in the labor market and in particular, industries that were really booming or job types that were really booming. For example, the recruiter job market has fallen off a cliff. Six months ago, you couldn’t trip over multiple offers to be a recruiter. But now, it’s very rare to find a very solid offer it’s becoming a much more difficult labor market for them. 

Then, of course, we’ve got the tech industry which led the pace in this employment. It seems like the spigot got shut off immediately. In fact, I can’t log into LinkedIn or read the news without seeing another major employer announcing a massive layoff and that can be pretty disconcerting if you’ve been a job seeker throughout the process and you see this great labor market kind of come to an end and now suddenly we’re getting into a more difficult labor market 

The Year of Buzz Words

We also saw 2022 become the labeled job market where it seems like every single employment movement suddenly got a trendy label attached to it. First, we had the great resignation which happened somewhere in the 2020 to 2021 range when people got tired of working these careers that were unfulfilling only to look around to all their fellow employees being laid off and they suddenly decided to reevaluate what they truly wanted in their work. So, a lot of people voluntarily left the workplace and that whole phenomenon was very very popular for that period of time.

In fact, everywhere you turned there was another article about the great resignation, which filled the economic boom and there was the rise of the quiet quitters. Quiet quitting has had a bad rap and I think honestly the term has been manipulated somewhere along the lines really.

Originally, when that term became a thing, it was about people who were tired of their jobs but didn’t want to quit so they literally scaled back to doing almost nothing but a mouse wiggle. I mean it was literally you quit without physically quitting. You’re still collecting a paycheck and because employers were so desperate for employees at that time, they looked at it as if a little employee productivity was better than none.

However, the corporate world kind of manipulated and morphed it into some sort of negative or derogatory term for people who are just working for their wages. So they literally seem like they changed the definition here to people scaling back from doing all this extra work just simply doing what they’re paid to do and rightfully so a lot of people have taken exception to it.

However, the spirit of quiet quitting was completely different when it first started. So employers took exception to the quiet quitters and then started to quiet fire. So employers could nudge people out of their nests without actually firing them and if they can get them to quit themselves it would be even better. Then that concept turned into loud layoffs. Loud layoffs are the people who are very vocal about being laid off.

They’ll log into LinkedIn and they’ll loudly declare to anybody who’ll listen that they’ve been laid off. The purpose of that in theory is to get more attention to their profile and hopes of landing another job quickly. Whether it works, we don’t really know. However, we’ve seen plenty of people declaring that they’ve been loudly laid off. So the latest trend is this career cushioning. But the moral of the story is that media loves these tag phrases and that’s been a big trend in 2022 something tells us that this is here for good and we’re going to continue to see this throughout 2023.

In the spirit of layoffs, we ended the year and saw a lot of people experiencing very traumatic layoffs at very inopportune times in some cases people were getting laid off right before the holiday break and they are many people who’ve laid off in between Christmas and the first of the year. So talk about really crappy timing happy new year to those folks. 

Company Loyalty Is Dead

And what that taught a lot of folks and especially those who were caught in 2020 as well, is that there’s no such thing as corporate loyalty. We’ll probably talk about that whole concept in future articles. But gone are the days when you can work for a single employer for 30 years collect a pension and retire comfortably not only it is not realistic but it’s not particularly healthy if you value your career growth.

Now, it’s not to say that there isn’t a company out there that doesn’t have good career growth where people have worked long term. But I’m talking about in general across all industries across all jobs the idea of corporate loyalty is dead. The corporations are not loyal to the employees and therefore the employees should not be loyal to the company. This is where the concept of acting like a free agent comes in.

What’s In Store For 2023?

So, what do I think is in store for the labor market going forward, now that we’re in 2023. Well, if you look at labor market indicators there are still some signs that were in a relatively strong labor market as compared to the overall economy and the inflation rate. If you look at the labor market indicators coming up from the department of labor there are still some signs that we’re in a decent labor market overall. Especially, as compared to 2020 and historically.  

The Volatility Factor

However, it’s certainly not as rosy as it was before because as we take a look at the labor statistics, some days it looks like it’s all peachy and roses, and the next day it looks like it’s gloom and doom. This probably has to do with how people are interpreting that data. So, it would always be wise to take the middle road but not get excited either way at the same time and it would be suggested that we are going to be in for a definite cooling in the labor market and so it started happening at the end of 2022 and is expected to continue throughout 2023. 

There’s been a who’s who of layoffs in the tech industry and I think we’ll start to see that spill over into some of the other industries that haven’t yet been affected. And we’re already seeing some of that happening, like the major layoffs happening in the automotive and manufacturing industries and I also came across some indicators that there’s going to be some layoffs in banking and some other industries that are not related to tech and it would be good to wait and see on how deep those cuts might potentially be and how closely they’ll mirror the economic conditions as a whole.

The End of Remote Work?

We’re also noticing that there is a continued war on return to work and here we’re using the term work purposefully where it feels like employers are demanding a certain thing and employees are demanding the opposite of that and it’s a great tug of war back and forth. However, there are a lot of corporations that are trying to force people back into the office and if you had made plans for daycare or you’ve built your life around remote work it can be a very disruptive thing to suddenly be forced back into the office kind of against your will.

Now there are some companies that are continuing to look at hybrid models but even some of them are being scaled back with more emphasis being on the office than less. So, probably we’re going to continue to see companies waging war on this remote work especially if the corporate culture was not remote first, to begin with. 

It’s also predicted that we’re going to see wage growth slowly, considerably, especially where we were 12 months ago compared to today. Gone are the days we were seeing massive bidding wars for talent as companies simply don’t have the stomach for that anymore unfortunately it’s not the same labor market that it was at the beginning of 2022 as there are a lot more employees in the labor pool and companies aren’t fighting over employees the same way that was.

Increased Bidding Wars for Top Talent

So I think it’s going to be somewhat unusual to see bidding wars for all but the top talent and things like massive signing bonuses and crazy perks are going to be the things of the past as we just don’t see companies offering that kind of stuff because they don’t need to anymore and I’d like to put an aster here and say this is not every single job there are still some employers and still some industries where there are some labor shortages and probably will continue to be so.

But in general, across the entirety of the labor market probably this is going to be a continuing trend. So if you’re somebody that is laid off or you’re somebody that is thinking about testing the waters. What is our recommendation for 2023? Personally, if I’m somebody that is considering a new job but is gainfully employed, I might hold off for just a little bit to see what happens as we go into 2023 into these first, second, and third quarters just to get the feel of the labor market.

I don’t think you should be jumping headfirst into the labor market, even quitting a job without having another one lined up unless you truly need to get out of the toxic situation. I would just play it safe at this point and I think being cautious is probably a better strategy than being reckless 

What Situations You Should Be Prepared For?

Especially if you’re unemployed your strategy should remain the same. Along with keeping an eye on layoff indications, you should also be aggressively looking for jobs, making sure that your resume absolutely stands out and that it’s the best possible version to get a recruiter to call you. So don’t think that it’s a hopeless situation, however, I do think that you should be aggressive if you’re unemployed and cautious if you’re employed currently.

Keynote

So the bottom line is that you should be always career cushioning and that’s probably a good rule of thumb in general in your career is to always be prepared and always act like a free agent. So that’s what I think we’re going to be heading in 2023, we all are anxious to see how things unfold. It could get a little rocky so make sure you buckle up and get yourself in order so as to speak and let’s see what happens over the next few months.