In 2023, the labor market ended relatively quiet with a slight decrease in open jobs and workers quitting. Throughout the past few years, significant shifts have impacted the labor force, such as the transition to remote work in 2020, the Great Resignation in 2021, and the return to the office in 2022. 2023 seems to have been characterized by a struggle between employers and workers, with CEOs pushing for more in-office work while employees advocated for better pay and working conditions.
Looking ahead to 2024, experts anticipate several trends. The gig economy is predicted to expand, leading to an increase in freelance, contract, and consulting work. The demand for services like Uber, Lyft, and Taskrabbit remains high, and traditional industries are also turning to contractors to reduce labor costs. Additionally, inflation is prompting more workers to take on side gigs. Despite the challenges, new legislation at the state and city levels aims to establish better protections and benefits for non-full-time workers.
On the contrary, constant headcount growth is on the decline, with expectations of more layoff announcements in 2024, following a significant increase in 2023. It's suggested that companies may be hiring and firing more rapidly to appease both employees and investors. As a result, companies are expected to become more cautious in their hiring practices.
In terms of hiring, AI is set to play a more significant role, with both applicants and employers utilizing AI tools in the recruitment process. While proponents believe AI can enhance the hiring process and address workforce aging, there are concerns about potential chaos and inaccuracies in the labor market caused by AI.
Another significant change anticipated for 2024 is the decrease in noncompete agreements. Historically, these agreements have limited workers' job opportunities, but recent legislative efforts may lead to their prohibition or significant restriction.
These trends for 2024 are subject to the decisions of leaders, collective actions by workers, and the effectiveness of recent legislation. As it stands, the labor market is expected to see growth in the gig economy, periodic layoffs, increased AI involvement in hiring, and the discontinuation of non-compete agreements.