After COVID, companies fought each other to hire new employees to fill vacancies created by massive layoffs, retirements and “quiet-quitters” that surged during the pandemic. The rate of employee departures went from 2.3% each month to 3% at the beginning of 2022. Fighting for highly skilled workers at all levels made companies go toe-to-toe with one another, and it was considered by most to be the new normal.
Forbes reported, “With estimates that the global talent shortage could reach 85 million people by 2030, it’s clear that a market-wide talent shortage is on for the long term, and business leaders need to take it seriously. The future of your company could depend on it.”
However, employers have begun to curb their hiring. The Federal Bureau of Labor reported that America added only 175,000 new jobs to the market, below their initial projection. In June 2024, companies began to cut 386,000 jobs, with Nike and Tesla announcing that they would be conducting layoffs in the coming weeks.
Nearly half of employees have said they are so frightened of mass layoffs that they have begun saving their income for they were to be laid off, according to MarketWatch. Artificial Intelligence (AI)has already started taking over the workforce by storm, replacing specific jobs that would be more cost-efficient if worked by AI. With ongoing layoffs, workers have begun to realize their advantage has waned and strikes have fallen from a high of 76% to 40% between September and March of 2024. Companies have also begun to no longer accept unruliness, especially against their business. Google fired 50 of their employees for protesting their cloud-computing deal with Israel’s government. This deal, Project Nimbus, offered Israel’s government advanced AI capabilities such as facial recognition, data harvesting and object tracking. Project Nimbus was agreed on in 2021, before the outbreak of the war and Israel’s genocide charges from the International Court of Justice. Pro-Palestine Google employees were outraged, protesting that they should know what their work would be involved with the project. After being notified of this strike, Google decided to move along and fire 50 employees who had expressed their discontent.
Though businesses are cracking down on employees, 70% of bosses state that they still struggle to fill positions. Although 5% smaller than last year, it is more extensive than ten years prior, which was around 46%. However, they claim that employment shall remain tight because the World Bank projected that, “throughout the 2020s, the share of America’s population aged between 20 and 64 will fall from 59% to 56%.”
A second reason is a growing mismatch between employees’ skills and the ones employers need as the economy digitizes. “The emergence of generative artificial intelligence has heightened that concern,” says Anu Madgavkar of McKinsey, a consultancy (Economist, 2024).
With mass layoffs looming over employees’ heads, nine out of 10 employees say they are willing to sacrifice to keep their jobs. Sixty-three percent of employees state that they are willing to take pay cuts, 37% said they are willing to accept a demotion, and around 51% are eager to take on additional responsibilities. More than 40% are willing to relocate for work. With 24% of workers stating that they will run out of money within two weeks of being laid off, and 40% say they will run out of cash within the month if laid off, this situation has opened up new concerns about saving habits of employees, AI entering into the workforce and how will the market react to significant layoffs and lack of hiring with new graduates entering the market every year.
