Job Market Trends Suggest Uphill Battle for C...

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The COVID-19 pandemic sparked changes to the workforce that continue to evolve today. From retirees returning to the workforce to new hires not showing up for their first day, the work landscape is a strange new world for many employers. Workers are holding employers to higher standards and many of the perks they seek can be found through freelancing.

Freelancers May Have the Upper Hand as Higher Costs Wipe Out Wage Increases

U.S. added 428,000 jobs in April as the labor market remained strong.
A record number of workers quit their jobs in March.
Hourly wages increased by 0.3% in April and have increased 5.5% from a year earlier.
To fight inflation, the Federal Reserve boosted interest rates by the most in 20 years.

According to the most recent US Jobs Report, the U.S. labor market added 428,000 jobs in April. This is in line with Upwork’s research which found that 68% of companies are planning to hire in the next 6 months. The current unemployment rate of 3.6 percent is close to a 50-year low.

The U.S. Bureau of Labor Statistics also recently reported that a record number of workers quit their jobs in March. While the U.S. economy has regained nearly 95 percent of the jobs lost at the height of coronavirus-related lockdowns in 2020, workers continue to leave their jobs at record paces. It’s possible that many of these workers may turn to freelancing. Last year, Upwork research found that 56% of non-freelancers say they are likely to freelance in the future.

The continuing exodus of workers has put the squeeze on employers and the April US Jobs Report showed average hourly earnings were 5.5 percent higher than a year earlier. However, inflation has all but wiped out wage increases for many. This could further drive workers to freelancing as Upwork found that 44% of freelancers say they earn more freelancing than with a traditional job in 2021, this was up from 39% in 2020 and 32% in 2019. In response to rising costs, the Federal Reserve boosted interest rates by the most in 20 years. Read more in The New York Times’ breakdown of the April jobs report.

Retirees are Returning to Work and Seeking Benefits Offered by Freelancing

2.4 million more Americans retired in the first 18 months of the pandemic.
1.5 million retirees in the US alone have returned to work.
Employers faced with worker shortages are targeting retirees.

The Washington Post reports that while 2.4 million more Americans retired in the first 18 months of the pandemic than expected, around 1.5 million retirees in the US alone have returned to work. Increases in the cost of living, reduced fears about the pandemic, and more flexible working conditions are among the reasons cited for the return. Some of this influx of retirees could be attributed to the fact that some employers faced with worker shortages have turned to explicitly targeting retirees.

The conditions causing retirees to return to the workforce pair well with freelancing. Upwork found that 68% of new freelancers say that ‘Career Ownership’ is a top draw, followed by the ability to work remotely at 54%. Upwork also found that 78% of skilled remote freelancers cite ‘schedule flexibility’ as a key reason for freelancing, 73% cite location flexibility, and 73% say freelancing allows them to pursue work they find meaningful. As additional benefits become available to freelancers through programs such as Upwork’s partnership with Catch, traditional employers will need to work harder to satisfy workers.

Companies Must Evolve to Meet the Demands of Millennial and Gen Z Workers

50% of managers said turnover within their team has increased compared to before the COVID-19 pandemic
49% of U.S. Millennials and Gen Zers would quit if required to return to the office.
15-20% of new hires are ghosting their expectant new employer.

The availability of more benefits to freelancers isn’t the only threat to traditional employment arrangements. 50% of managers said turnover within their team has increased compared to before the COVID-19 pandemic. This makes sense given that workers have more options than ever and Millennials and Gen Zers have high expectations for their employers and their careers. This is especially true as more companies ask employees to return to the office. In Upwork’s white paper The Grand Redesign, it was reported that 49% of U.S. Millennials and Gen Zers would quit if required to return to the office.

Even if a company manages to impress a worker in the interview process, the attachment may not stick. According to The Wall Street Journal, employers are reporting higher numbers of new hires accepting offers, scheduling their first day, and then not showing up. As many as 15-20% of new hires are ghosting their expectant new employer. Workers reported receiving better offers before their start dates or changing their minds about roles after learning of poor working conditions.

Further adding to the high turnover rates, in what’s being called the ‘You Only Live Once’ economy, Time reports that Millennials and Gen Zers are expecting to have multiple careers over the course of their lives. Furthermore, they’re more focused than ever on finding jobs that match their values. As such, companies have to work harder than ever to keep their employees. In a Time article on the future of work, Susan Arthur, CEO of CareerBuilder, believes the days of the long-term, loyal worker are over. From their first day on the job, she’s exploring ways to keep new hires. “I now have to think about what I can do that is uniquely special to help this person grow.” Jennifer Shappley, vice president of talent acquisition at LinkedIn, believes “...companies must clearly articulate their values and help candidates see that their organization is a fit for their values. This is a huge shift for companies to attract and retain talent.” Upwork has posited that organizations “need to not only provide tools, training, and best practices for virtual work and collaboration but also become more transparent overall, helping employees connect with the core activities and values of the organization.”

What’s your take on workers pushing back against employment norms? How do you think the situation will evolve in 2022?