An Update on The Labor Market
Labor shortages continue to wreak havoc on the American economy, affecting people from all walks of life. Economic growth has remained static despite solid labor demand and low vacancy, and labor demand is predicted to rise through the end of the new year. U.S. economists blame the pandemic for the drop in employment levels, and policymakers hesitate to enact policies that dissuade individuals from going back to work when COVID-19 programs come to an end.
Trends in Labor Force Participation Rates
Accounting and finance are among the industries severely damaged by the pandemic but are predicted to recover by 2023. The new year is expected to bring exceptional opportunities for recruiters and job seekers in a “candidates market.”
The finance and accounting sectors are expected to increase in the next year. As employees return to the office, hiring in the financial industry, especially investment banking and accounting, has already seen a significant step up. In fact, the financial sector is expected to reach pre-pandemic levels before the end of 2022.
Companies in the financial sector have also seen how valuable remote work can be to their businesses in cutting costs and boosting productivity from employees who are more comfortable at home. To aid in hiring and retention, more companies in the financial industry are considering telecommuting options.
The pandemic still impacts the low labor force participation rate. The employment market resilience and the recovery rate in the Southeast, Texas, the Pacific Northwest, and the Mountain West remain encouraging, with most nearing complete recovery. Cities like Phoenix, Dallas, and Austin see significant talent retention and development increases.
The Midwest, Northeast, and Gold Coast are struggling to recuperate lost employment or skills. Los Angeles, New York, Chicago, Boston, and San Francisco continue to rank at the bottom of the list. States like Hawaii, New York, Louisiana, and Alaska continue to struggle to recover lost jobs, and the path to economic recovery is likely to be slow.
Recruitment and Talent Acquisition Trends
U.S. economists predict that top-performing metropolitan regions will increase new hires through 2022. Businesses plan to fill job vacancies by bringing in talent from urban areas struggling to re-establish their labor force. Employers and companies should consider adopting a systematic approach to keeping personnel with the necessary skills and abilities. Despite the desire for higher compensation, the skill pool remains thin, and companies are hesitant to fill jobs with unqualified workers.
The increased demand for workers in areas such as New York, Chicago, and Los Angeles is expected to decrease the unemployment rate. Analysts predict that job searchers in these regions will reclaim lost positions by 2024.
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