Over the last year, we’ve witnessed the beginning of a transformation in labor market dynamics. The once-powerful employee-driven job market is slowly but surely shifting in favor of businesses and employers. This shift is marked by several key trends reshaping how workers approach their careers and how employers manage their workforce.
A CHANGING LANDSCAPE
One of the most noticeable shifts is the increasing advantage for workers who choose to stay in their current jobs rather than jump ship for a higher salary elsewhere. This trend is a result of several factors, including a decrease in the availability of desired positions and a stabilization of pay rates.
“The raises Americans earn from switching jobs is shrinking, narrowing their advantage in wage gains versus job-keepers. That stands to reduce inflation, as companies benefit from lower costs when snagging new employees. While it’s happened without mass layoffs, weaker pay gains signal that the labor market’s balance of power is shifting back to businesses,” according to a report from Reuters.
DESIRED POSITIONS DWINDLE
As the economy quickly expanded post-pandemic, skilled workers often had their pick of job opportunities, with companies competing fiercely to attract top talent. Today, however, landing a dream job is no longer as straightforward. As lucrative positions become scarcer, employees are thinking twice before leaving their current roles in pursuit of greener pastures.
This scarcity in desired positions is due in part to businesses’ ongoing investment in technology, especially in the trades and industries we serve, commercial printing and packaging. Automation and artificial intelligence are increasingly being integrated into various sectors, leading to reduced demand for a large workforce and somewhat dampening employees’ negotiating power.
PAY RATES STABILIZE
Another critical aspect of this evolving job market is the stabilization of pay rates. Companies eager to secure top talent were willing to offer hefty paychecks, bonuses, and benefits packages to attract the best candidates. This year, pay rates have begun to even out. Employers are now able to maintain a greater level of control over compensation packages, and this has made it less enticing for workers to seek new opportunities solely for a salary boost.
ADP reported pay growth continued its slowdown in August. For the first time, all 50 states and Washington, D.C., experienced a slowdown in pay growth. While people staying in their jobs saw a year-over-year pay increase of 5.9%, the slowest growth since October 2021, for job changers, pay growth decelerated sharply to 9.5%. “The gap between the two has narrowed by nearly half since last year, approaching where it was in late 2020, when inflation last ran below the Federal Reserve’s target,” according to Reuters.
BUSINESSES EMBRACE EFFICIENCY
Businesses are also looking inward to find ways to improve their profitability. This has led to a focus on internal efficiencies, which not only boosts profits but also minimizes the ongoing HR challenges that employers have grappled with in recent years. Employers are investing in better talent management practices, employee development programs, and more effective onboarding processes to enhance productivity and employee retention.
A CALL TO ACTION FOR COMMERCIAL PRINTERS
All of the factors have led to a decreased “quits rate,” which is back to 2019 levels and an end to the Great Resignation. However, economists say it’s still a workers’ job market with jobs remaining well above their pre-pandemic level, so companies must stay alert and flexible. (That’s where we come in!)
Commercial printers and others in the graphics industries are certainly still feeling the pinch. There continues to be a need for more skilled workers in these fields, as fewer individuals choose training and careers in commercial printing and related trades.
To combat this shortage of talent, commercial printers must take proactive measures. Creating opportunities for training and education within the industry is paramount. Offering mentorship programs and apprenticeships can go a long way in attracting and retaining skilled workers.
Commercial printers looking to fill their workforce should consider reaching out to local trade schools and high schools to promote the value of a career in the field. Highlighting the advantages of a stable job, competitive wages, and opportunities for skill development can generate interest among potential candidates.
For industries like ours facing a talent shortage, the key is to invest in the future workforce by offering training, education, and mentorship opportunities. By actively engaging with local educational institutions and emphasizing the value of these careers, businesses can help bridge the gap and ensure a steady stream of skilled workers in the coming years.
In the meantime, building a flexible staffing plan that keeps workers happily employed while providing resources when and where you need them is a smart move. The labor market may be evolving, but with the right strategies, employers and workers can thrive in this new era.