- Karin Kimbrough, LinkedIn’s chief economist, gives a brief but valuable insight into employee turnover and hiring for the year.
- Despite 2022 offering a fresh start for a number of people, it's likely that many of the struggles around employment will remain this year.
- These issues could even take a turn for the worse as Omicron and the Delta variant continue to spread around the world.
No matter which way you slice it, 2021 was a tough year. It was hard for managers, keeping teams motivated. It was hard for staffers, just showing up. It was hard if you were a parent. It was hard if you were an essential worker. And, well, was there anyone it wasn’t hard for?
It would be nice to say that 2022 is a fresh start on all that, but many of those same challenges will be here for a while as omicron and delta continue to wreak havoc.
But business must go on, as they say. And on the heels of employees stepping back, quitting, staffing crunches, and supply chain issues, that also means hiring.
What will hiring look like in 2022? Who’ll be taking the jobs? What will happen to wages? And what is motivating staffers now?
Karin Kimbrough, LinkedIn’s chief economist, shared what she’s predicting for employee turnover and hiring.
US workers can afford to be choosy when seeking new jobs
Americans quit their jobs at record monthly rates in 2021. That was especially the case in sectors like retail, restaurants, and hospitality, said Kimbrough, in what she refers to as first-line jobs. And it’s true that many of these folks are not immediately rejoining the workforce, which is where the idea of the Great Resignation comes in.
But there are many others who are quitting in order to take better jobs, Kimbrough explained. And that’s where the idea of the Great Reshuffle comes in. This didn’t happen in 2020 at the height of the pandemic; it’s only happening now that there’s a glut of jobs, fueled by workers’ choosiness about what they will or won’t do.
November data from the Bureau of Labor Statistics show there was less than one unemployed person (0.7 to be exact) for every job opening in the US. In other words, more jobs than takers.
This puts job-seekers in a position to be quite choosy about the jobs to which they apply—they’re typically only willing to switch jobs if it’s for more money or better career opportunities.
“I don’t think we’re at some sort of crazy hyperbolic loop where people will, you know, quit in ever shorter periods of time to get that next incremental dollar and salary,” Kimbrough said. But she thinks the elevated pace of job switching will stick around for a while.
The “reservation wage” will go up
To a certain extent, everyone last year was asking themselves the same question: What is life about?
They wondered: How much time do I have? Am I spending it the way I really want to spend it? They asked work-specific questions like, Why am I commuting two hours for a job? Why am I working with people I don’t want to work with? And financial factors played a role too: As home values rose, those who could wondered: Why not retire or take a pause? For first-line workers, in jobs with low agency, the questions centered around dignity and flexibility and having more control over their time.
Enter the reservation wage.
That’s the minimum wage (not to be confused with minimum
wage) that a worker will accept in order to participate in the labor market. And covid, and the questions it prompted, made workers calculate it differently.
Said Kimbrough: With covid, you had staffers valuing their life a little bit more, and weighing the risks of working in a new way. Certain jobs suddenly looked a lot less attractive. And so you saw the reservation wage go up.
Pay in the US will keep rising
“For this year at least there’s going to be pressure on employers to cater more to the wants and demands of employees or potential employees,” Kimbrough said, pointing to an increase in promotion rates as one sign of employer’s efforts to retain staff.
And we’re going to see that in continued wage pressures this year, she said. According to the most recent BLS data, average hourly earnings were up 4.8%.
Working remotely will continue to be valued by employees and helpful in hiring
Kimbrough said remote work is one in a “range of features that employee employers will offer,” alongside flexibility—what hours you work, and when—as well as balance, as in the sense that you can step away from work for a moment without the world falling apart.
But remote work seems to be of particular importance. Pre-pandemic, 1 in every 67 US jobs on LinkedIn jobs was remote. Now it’s around 1 in 6, said Kimbrough. Job seekers are now “two-and-a-half times more likely to apply for a remote job than a non-remote job,” she said.
There are definitely upsides for employers. Once a role is potentially remote, said Kimbrough, hiring managers can search for talent across a much wider geography. This is a plus for employers trying to attract more diverse talent and trying to attract very rare talent with skills that aren’t easily found.
And of course, for employees, now “you can live in one place and work technically in another,” said Kimbrough, which is “hugely attractive.”
Have you read?
The work skills in greatest demand: digital and oh so human
Asked what skills are most in demand, Kimbrough points to two buckets.
Right now you can’t find many roles that don’t require some need for digital skills, she said. And that includes jobs you wouldn’t typically think of as “digital.” You could be working in a warehouse, using a handheld device that helps you monitor all the stock. Or you might be working as a nurse using technology and software to maintain records and monitor patients.
The second bucket of skills in wide demand is more challenging in a way, because they’re skills that can’t really be done by a robot or AI, but also can’t easily be taught. These are skills like empathy, judgment, and leadership.
“You can coach people towards it, but it’s hard to train for,” said Kimbrough. So when you find employees who pair kindness and reason with inherent leadership qualities, hold onto them—if you can.