A new study by economists at Glassdoor and Indeed Inc. suggests that workers are likely to have the upper hand in the labor market because demographic changes make it more difficult for employers to hire and retain employees.
An aging population and reduced immigration has resulted in a smaller pool of workers overall, according to the joint report, which analyzed employment trends across the United States, Canada, France, the United Kingdom, Germany, Australia, Japan and China. As a result, employment in certain industries will remain a challenge for years to come, according to what was reported by “Bloomberg”, and viewed by “Al Arabiya.net”.
The report stated that fears of a possible recession in 2023 may temporarily limit the employment of companies in the short term, with Recent group hairstyles for tech giants like Meta Platforms and AmazonHowever, the long-term effects are likely to skew market power towards job seekers, according to the study.
“At a moment like this, with so many layoffs at large companies, it can feel a little strange to talk about long-term staffing challenges,” wrote Aaron Terrazas, chief economist at Glassdoor. “But the truth is that it is at moments like these that it is easy to lose some trees to the forest.” “It’s easy to confuse short-term cyclical fluctuations with long-term structural challenges in the labor market,” he said.
In particular, the effects of an aging workforce, already accelerated by the pandemic, are becoming more acute as baby boomers average 65 in 2022. “The declining baby boom has been a slow-moving train wreck over the past 20 years,” Terrazas said.
Graf shows the evolution of the basic labor force in some countries
Moreover, the working-age population is expected to contract significantly in the US, UK, Canada, Germany, France and China, as the report notes that “the stage is set for continued employment challenges”.
Contraction of the workforce
Terrazas said that despite speculation earlier in 2022 from economists that inflation might force some baby boomers back into the job market, it did not hold. A recent study from Indeed found that the rate of retirees returning to the workforce has slowed, even as new retirements continue to increase.
This demographic shift is exacerbated by the sharp decline in immigration. The United States has an immigrant labor deficit of about 1.4 million compared to its pre-pandemic trajectory, Terrazas said. This means that employment will continue to be a struggle for sectors such as healthcare, restaurants and hospitality that have tended to rely on immigrant labour.
As a result of this shortfall, in order to remain competitive, the report’s authors write that employers will need to be flexible about the combination of in-office jobs, can be done remotely, offer attractive wages and benefits, cultivate a healthy company culture, and renew focus on business initiatives. Diversity, equity and inclusion.
“It is a scary moment for many companies right now,” Terrazas wrote in the report. “But the companies that will emerge from this crisis by the end of 2023 successfully are the ones that are watching long-term trends.” “You don’t plan a business for the next quarter, you plan a business for the next 10 years,” Terrazas said. “So these moments of crisis, and the moments of fear that the economy is going through, are in fact the perfect moments to think: What are people ignoring? What will happen after the fire breaks out, after the urgent needs are met?”