More Than Half of U.S. Companies Anticipate Adding New Positions in the Second Half of 2024

August 8, 2024 – Fifty-two percent of companies in the United States plan to add new permanent positions in the second half of the year, according to new research from talent solutions and business consulting firm Robert Half. Another 43 percent plan to fill for vacated positions, and 57 percent said they plan to increase the number of contract professionals on staff, down 10 percentage points from the first half of 2024.

“Today’s workers are more selective when it comes to making a career move,” said Dawn Fay, operational president of Robert Half. “Employers should have a strategic hiring plan in place and remain flexible in order to land in-demand talent and keep projects on track and workloads in check. While hiring remains a priority, employers shouldn’t lose sight of their current workforce. Skilled talent is still in high demand, so it’s crucial to prioritize retention strategies to keep your best employees on board.”

According to the survey, the top factors influencing hiring decisions include company growth (57 percent), employee turnover (47 percent) and project-based work requiring skilled talent (42 percent). However, most employers (86 percent) report hiring challenges, and their major areas of concern include: Lack of applicants with the required skills (48 percent); hiring quickly enough to land the best talent (48 percent); and meeting candidates’ salary expectations (48 percent).

Given these challenges, Robert Half found that nearly two-thirds (62 percent) of managers said they’d be willing to bend on years of experience if the candidate possessed the skills needed for the open role.

Attracting Talent Requires a Strategic Approach

Job growth remains steady compared with the past year, and companies are consistently hiring over 5.5 million workers each month. The unemployment rate is hovering around four percent, and voluntary quits have settled into a range similar to pre-pandemic levels. Despite this, Robert Half found that 86 percent of managers report difficulty finding skilled talent — with three in 10 (30 percent) saying it’s very challenging.

To land the best talent and stand out from the competition, Robert Half found that hiring managers are implementing proactive strategies and offering:

• Hybrid jobs where workers can spend time at home and in-office (41 percent).
• Windowed work, allowing teams to work outside of typical business hours (41 percent).
• Higher starting salaries (38 percent).

Global Outlook

A separate report from ManpowerGroup recent revealed that global hiring intentions are holding strong for the third quarter of 2024, with a Net Employment Outlook (NEO) of 22 percent, though outlooks weaken since Q3 2023 according to the latest ManpowerGroup Employment Outlook Survey. The survey, which gathered data from over 40,000 employers across 42 countries, reveals that while the NEO remains unchanged from the previous quarter, it represents a – six percent decline compared to the same period last year. This year-over-year decrease indicates that economic uncertainties continue to impact hiring plans.

Additionally, the survey found that employers are beginning to identify the impact of artificial intelligence (AI) and machine learning (ML) technologies. More than seven in 10 employers (72 percent) believe AI and ML will have a positive impact on business performance, especially in the IT and financials and real estate industries. Most (70 percent) plan to leverage AI to boost upskilling, reskilling, and training efforts.

Related: Hiring Confidence Slows as Employers Steer Economic Headwinds

“Though labor markets are holding strong in many markets, ongoing economic uncertainty continues to give employers pause,” said Jonas Prising, chairman and CEO of ManpowerGroup. “Most are incrementally more cautious than this time last year, prioritizing hiring for the core skills they need. At the same time – the promise of AI advances is front of mind for businesses across every industry. This data shows organizations are focusing on upskilling their current workforce and maximizing the potential of AI to drive efficiencies and boost productivity.”

Leadership Confidence Falls to Three-Year Low

During the three years that Russell Reynolds Associates has tracked leadership confidence, the world has faced a relentless cycle of multiple, conflicting, and often unpredictable issues. From the conflicts in Ukraine and the Middle East and their destabilizing effects on the world, to inflation, rising interest rates, and the launch of ChatGPT igniting massive interest in generative AI, the leadership landscape has been far from quiet. What’s more, the firm notes that nearly half of the world’s population is set to head to the polls for what many are calling a super election year. “Leaders are taking note,” a recent Russell Reynolds report said. “At every level, leadership confidence in their executive team has progressively declined, implying that the executive team’s ability to address this ongoing uncertainty and ever-increasing complexity is waning.”

“Not only are leaders faced with a layering of issues, but they must also contend with rising expectations and scrutiny from a heightened diversity of stakeholders,” said Constantine Alexandrakis, CEO of Russell Reynolds Associates. “This provides a huge cognitive and emotional load for today’s leaders.”

While North American employers remain the most optimistic with a 27 percent outlook for the third quarter, hiring intentions have fallen – eight percent from the third quarter of 2023 and – four percent from last quarter. Employers in the United States (30 percent) reported the strongest hiring intentions, though the outlook declines five percentage points year-over-year. U.S. employers report one of the strongest global outlooks for the information technology sector at 50 percent.

Latest Jobs Report

Employment rose by 114,000 in July as the U.S. unemployment rate rose to 4.3 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed persons was 7.2 million in July. Employment continued to trend up in healthcare, in construction, and in transportation and warehousing, while information lost jobs.

“Temperatures might be hot around the country, but there’s no summer heatwave for the job market,” said Becky Frankiewicz, president of the ManpowerGroup employment agency. “With across-the-board cooling, we have lost most of the gains we saw from the first quarter of the year.”

“The latest snapshot of the labor market is consistent with a slowdown, not necessarily a recession,” said Jeffrey Roach, chief economist at LPL Financial. “However, early warning signs suggest further weakness.”

“While the labor market has remained remarkably resilient over these past two years of elevated interest rates, it’s important for the Federal Reserve to stay ahead of any further labor market slowing by proceeding with its expected September rate cut,” said Clark Bellin, chief investment officer at Bellwether Wealth.

Related: How to Get Ahead in the Hiring Waiting Game

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media