To Understand Today’s Labor Market, Look at These 3 Industries

Between the arrival of fall and the rollout of another month’s worth of labor market data, I can’t help but think about how the changing of the seasons also applies to our economy. Much like the warmth of summer gives way to the chill of fall, the economy goes through cycles of expansion and contraction, too.

Our barometer in the workforce solutions industry is the unemployment rate, which continues to fuel anticipation that the economy might pull off a soft landing.

According to BLS data, employment increased by 187,000 in August pushing the unemployment rate up slightly to 3.8%.

This cooler showing could foreground a pause in interest rate hikes, bringing relief to businesses that have been squeezed by high costs. Corporations have adjusted their expectations accordingly. An April survey revealed that business economists were roughly split on whether the U.S. would slide into a recession in the next 12 months, reflecting broad uncertainty about the future of the economy. By July, however, a more definitive picture came into view, with nearly three quarters of those surveyed favoring the odds of policymakers successfully accomplishing a soft landing over a recession.

Driven by improved profit margins and the ongoing resilience of the labor market, this marked uptick in sentiment from a diverse cross section of businesses could have broad implications across leading industries, including pharmaceuticals, technology, and manufacturing. If their predictions pan out, the U.S. could be on track to accomplish what previously seemed at best improbable: a rebalancing in the nation’s economy without a recession.

Although none of us has a crystal ball, these insights — and others — presented in AgileOne’s Workforce Solutions Market Overview: Fall 2023 Edition offer the clearest picture yet about where the global economy is headed. Combining the latest economic data from around the world with leading workforce solutions, the report is the latest in a series of resources we’re offering to help companies find opportunities amid global uncertainty.

As seasons change, here’s a summary from our report of three industry-level trends I’ll be keeping a close eye on:

●?????? The pharmaceutical industry is set for rapid growth over the next decade, driven by an aging population, rising chronic diseases, and a growing global population.

In the U.S., demand for medical scientists is projected to grow by more than 17% from 2021 to 2031, creating roughly 10,000 job openings annually.

These experts will focus on diseases like Alzheimer's and cancer, and a shift is expected toward conducting clinical trials in pharmacies to reach wider audiences.

However, the industry faces challenges such as a 20% surge in demand for STEM roles and a talent gap in pharma digital skills.

To address this, companies must get creative, moving away from traditional HR-driven recruitment and focusing on opportunities for reskilling and upskilling.

●?????? After facing a tumultuous period marked by high costs, supply chain issues, and geopolitical uncertainty, the technology sector is showing signs of stabilization with fewer layoffs reported in recent months.

In August, tech companies worldwide let go of the fewest employees since December. Meanwhile, 98 companies reported laying off staff in July — one of the lowest numbers in the past year.

As innovations in fields like AI and cybersecurity continue to evolve, there's a growing need for skilled talent, which has only been amplified by the dominance of countries like China and India in the tech sector. Private industry in America has a unique role to play, supporting STEM education and building internal programs to reskill and upskill workers.

●?????? The global manufacturing industry is grappling with labor shortages and competitive pressures in 2023. In the United States, there are approximately 550,000 openings sector-wide — a significant drop from a year prior, when there were more than one million openings, but still indicative of a market in which workers are hard to find. Meanwhile, hiring has been flat, with manufacturing job growth flat since the beginning of 2023. To maintain competitiveness — especially in the era of emerging technologies like electric and autonomous vehicles — companies are adopting total talent solutions, which offers a unified approach to workforce management that includes temporary workers, freelancers, permanent staff, and even robots.

Across each of these industries, there’s a common theme: in an era of labor market tightness, it’s imperative for companies to deepen their talent pools. According to one study, companies that hire so-called “hidden workers” — people from diverse backgrounds who are often cut out of traditional hiring processes — were 36 percent less likely to face talent and skills shortages compared to companies that stick with traditional candidates. More companies are turning to talent communities, too. The premise is straightforward: companies that incorporate strategic workforce planning during economic uncertainty will be better positioned to come out ahead. By bringing together groups of candidates interested in working for a company but not yet ready to commit, employers can keep a pipeline of candidates engaged until the time is right for both parties. This cuts down on costly search processes that are too often driven by tight timelines and pressing needs.

Changing times call for a change in approach, and at AgileOne, we’re with you every step of the way as we navigate the seasons of our economy. Download our Workforce Solutions Market Overview, Fall 2023 Edition here to explore the data for yourself, and reach out today to discuss how we can put our expertise to work for you.