The job market has seen a notable shift, with a growing number of people actively seeking employment. According to a report from the Federal Reserve Bank of New York’s Center for Microeconomic Data, the percentage of individuals searching for a job in the last four weeks surged from 19.4% in July 2023 to 28.4% in July 2024. This marks the highest level of job search activity since March 2014.
This increase in job-seeking activity is accompanied by a rise in the number of people who believe they might be unemployed in the next four months, reaching a record high since July 2014. Additionally, more workers now expect to switch employers or receive a job offer within the same period.
Job satisfaction appears to be waning, particularly in areas related to wage compensation, benefits, and promotion opportunities. This decline is more pronounced among women, individuals without a college degree, and those earning less than $60,000 annually. The report highlighted that only 88% of those employed four months ago remained with the same employer, a record low since 2014, down from 91.4% in July 2023. The transition rate to a new employer climbed to 7.1%, the highest since 2014, with women driving much of this increase.
The financial outlook for workers has also seen some changes. The average expected annual salary for the next four months decreased slightly from $67,000 in 2023 to $65,000 in 2024, though it remains higher than pre-pandemic levels. Interestingly, the average reservation wage, or the minimum salary workers would accept for a new job, rose from nearly $79,000 in 2023 to $81,000 in 2024. This figure is just shy of the record high set in March 2024.
Despite these fluctuations, employee sentiment showed signs of recovery in early 2024 after a steady decline in the latter part of 2023. This rebound, reported by Eagle Hill Consulting, suggests that workers may be less inclined to leave their current jobs. However, retention remains a challenge for many employers, with about half reporting a turnover rate of at least 15%, as per a Gallagher report. While retention has improved, issues related to employee experience and productivity persist.
Particularly in industries like leisure, hospitality, trade, transportation, and utilities, attrition rates are high. Companies in these sectors need to address factors such as burnout, workplace culture, lack of career progression, and compensation to reduce turnover and improve employee satisfaction.
