The US jobs sector has undergone rapid change since the start of the Covid-19 pandemic, with businesses struggling to retain employees amid a “war for talent” that is being driven by the Great Resignation and quiet-quitting trends as employees seek a better work-life balance, according to recruitment experts.
The Great Resignation in the world’s largest economy has given employees more bargaining power during one of the “hottest employment markets” not seen since the dot-com boom of the 1990s, says David Brown, chief executive of recruitment company Hays US.
Quiet quitting — the act of doing only what is required on the job within specified work hours — is also emerging as another obstacle for employers struggling to motivate employees.
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“There is a war for talent like I’ve never seen before,” Mr Brown tells The National.
“Employees are calling the shots right now — they want salary increases, sign-on bonuses, flexible working.
“They want increased benefits, learning opportunities; they want to be developed. They want either education stipends or technical training and companies that have an emphasis on well-being.”
Despite record-high inflation of 8.5 per cent and fears of recession, 4.2 million employees in the US quit their jobs in June, according to the Bureau of Labour Statistics’ monthly job openings and labour turnover summary.
Meanwhile, US job growth surged in July as the economy added 528,000 positions, defying expectations of an economic slowdown, Bureau of Labour Statistics released on August 5 showed.
However, finding the right talent continues to be a challenge for business leaders in the US, according to new research by global consultancy PwC.
About 38 per cent of respondents to the PwC survey, which polled 722 senior US executives and was released on August 18, said talent acquisition was a serious risk as they continue to explore new ways of working, such as expanding work options.
“Organisations are still walking a tightrope when it comes to talent as we begin to see the longer-term impacts of the Great Resignation,” Bhushan Sethi, joint global leader for people and organisation at PwC, said in a statement.
“Finding the proper balance between investing in specialised talent, managing headcount costs and driving productivity and morale will remain a top focus.
“Given today’s economic uncertainty and continuing polarisation, the role of business leaders to inspire creativity, enable job fulfilment and manage inequity — many within a hybrid environment — will be more critical than ever.”
The Great Resignation signals that, for many people, the pandemic not only changed how they work, but also how they think about work, says Toni Frana, career services manager and coach at FlexJobs, a US-based subscription service for employees seeking flexible and remote jobs.
“After experiencing this over the past couple of years, many workers are not willing to give it up,” Ms Frana says.
“Some have tried returning to the office but decided they want to work remotely. Others have quit rather than return to the office at all. Working parents, especially, either don't want to or can't return to the office because they're juggling caregiving responsibilities with their children, and challenges like commuting makes it all the more difficult.”
The average salary increase for US workers in 2022 is projected to be about 3.4 per cent, global adviser Willis Towers Watson said in a report in January.
Employees in specialist fields are being offered pay increases of between 10 per cent and 20 per cent, according to Mr Brown of Hays US.
However, record-high inflation in the US, which hit a 40-year high of 7.9 per cent in March, is having a negative effect on salary growth.
“I would say that the real wage growth across the general economy is actually negative,” Mr Brown says.
“It's not keeping pace with inflation in the areas that we're in. Overall, there's this feeling that, ‘I'm making more money, but it's not actually meaning anything because the cost of everything is going so high’.”
Meanwhile, the US Federal Reserve’s efforts to continue reining in inflation by raising key interest rates has signalled the end of the “cheap money” era for consumers.
Higher rates mean a range of personal finance products — from loans to credit cards, mortgages and savings — will become more costly and affect consumers' monthly debt repayments.
Central banks are no longer seeking to ensure money is available for households, companies and governments to borrow at “exceptionally favourable rates” as they did during the Covid-19 pandemic, Vijay Valecha, chief investment officer at Century Financial, told The National in March.
The Fed's rate increases also come amid an uncertain global economic outlook and tumultuous energy and commodities markets that have been affected by the Russia-Ukraine crisis.
“Is there is such a thing as too hot of a market?” Mr Brown says.
“It’s actually overcooked right now, so it does need to be cooled down a little bit,” he says.
“I do think that you'll see salaries moderate during the summer and … increasingly now, you're starting to see companies wanting to turn the knob a little bit and say, ‘We want to get to a hybrid environment’.”
With demand for talent at an all-time high, what is the salary and employment outlook for jobseekers in the US this year? Read on to find out and check out our detailed salary guides from Hays US and The Adecco Group North America.
Are salaries expected to increase in the US?
Job-seekers in the US can expect to be offered higher remuneration this year, with 37 per cent of decision makers anticipating salaries will be higher post-pandemic for the same position and with the same qualifications, according to recruitment company Adecco's 2022 Salary Guide, which polled 1,400 managers about their hiring processes.
About 46 per cent of respondents to the Adecco survey also said they increased their initial salary offer for open positions during the hiring process.
“Maintaining a competitive edge in the current hiring landscape has essentially come down to two factors: offering remote work options and higher salaries,” Adecco says.
Salaries are continuing to rise this year because of the tight labour market, particularly in a number of specialist fields including technology and life sciences, says Mr Brown of Hays US.
“We're seeing that their salary increases are in the neighbourhood of a minimum 10 per cent and, in many cases, up to 15 per cent to 20 per cent,” he says.
“Across the whole US employment landscape, there is an incredible supply-demand crunch right now. There's this insatiable demand for people … that's particularly acute in the more technical fields.”
Will bonuses return in 2022?
Yearly performance bonuses are back on the table, but many employers are also offering sign-on bonuses to potential employees because of the supply-demand labour crunch, Mr Brown says.
“Bonuses are very common these days, both for performance … and now, increasingly, sign-on bonuses,” he says.
“A 5 per cent salary sign-on bonus is not uncommon. In some cases, it is even more.”
Meanwhile, 40 per cent of respondents to the Adecco survey said their organisation had increased the use of sign-on bonuses as part of their total compensation package.
“In this competitive market, finding the right professionals is essential to reduce turnover, avoid the high costs of bad hires and outperform your competition,” Adecco says in its salary report.
“While many factors go into attracting and hiring the best people, it all starts with compensation.”
What benefits will US jobseekers be offered in 2022?
Employees have more bargaining power and are demanding a range of benefits that include paid time off, paid sick leave, mental health days, hybrid or remote working, education allowances and flexible working hours for a better work-life balance, Mr Brown says.
“No longer are work-life balance or remote work nice-to-haves or differentiators,” Mr Brown says in the Hays salary report.
“They have become expectations and the 'new norm' for the world of work. Employees want the total package — this means competitive salaries, flexible working and opportunities to learn new skills.
“Companies mandating five days a week in the office will have a significantly smaller pool of candidates to choose from.”
Meanwhile, a FlexJobs survey found work-life balance to be the top reason why 56 per cent of people consider changing careers, Ms Frana says.
“The pandemic has given people the space and incentive to reconsider their job choices and career options, and many would like to keep working remotely because it provides better work-life balance, more flexibility and higher productivity,” she says.
“They're motivated by the combination of reconsidering their career choices and seeing the strong job market that gives them the confidence to make big changes.”
While not all employees are offered paid time off in the US, it is typically about two weeks' annual leave a year. However, companies are now increasingly offering three weeks or more and even unlimited paid time off, Mr Brown says.
“You're also hearing a lot of talk about work from where you like, when you like as long as you get the work done, so companies are trying to appeal to that as a way to try to retain their employees and reach new employees.”
What will be the most resilient sectors in 2022?
Demand for digital talent has increased on a global scale as businesses were forced to accelerate their technology plans thanks to the Covid-19 pandemic, which forced millions of employees to work from home.
This is no different in the US, with technology expected to be one of the most resilient sectors this year, along with health care and life sciences.
“Technology is an enormous growth industry and I would challenge anybody to say that [it] is going to be a shrinking market over time,” Mr Brown says.
“It used to be that only tech companies were really into it [but] everybody's a tech company … and it will only grow as companies look to automate more and more of their work processes.”
What are the highest-paid jobs in the US?
- Accounting and finance: chief financial officer (California) — $200,000-$300,000 (gross per year)
- Accounting and finance: chief financial officer (New York) — $225,000-$350,000+
- Life sciences: chief medical officer (medical affairs/national) — $400,000-$600,000
- Life sciences: chief scientific officer (R&D/national) — $320,000-$390,000
- Life sciences: medical director (clinical development/national) — $290,000-$350,000
- Property management: vice president (national) — $250,000+
- Property management: real estate manager (national) — $90,000-$150,000
- Facilities management: executive/account director (national) — $175,000-$350,000
- Facilities management: vice-president (national) $150,000-$225,000
- Technology: chief technology officer (New York) — $250,000-$400,000
- Technology: chief technology officer (Dallas) — $180,000-$250,000
- Human resources: chief human resources officer (national) — $163,931-$426,019
- Human resources: vice president (national) — $126,939-$303,591
- Human resources: director of talent acquisition (national) — $93,302-$173,316
- Marketing: director of digital marketing (national) — $98,850-$182,347
- Marketing: art director (national) — $63,594-$117,904
