Workforce Confidence Wavers Amid Job Market Shifts
November 12, 2024 – Workers today generally feel less confident about job security than in previous years, and several factors contribute to this. Vaco‘s Q4 Talent Pulse Report found a drop in confidence compared to the third quarter of 2024. But confidence levels in both job security and financial status were higher compared to last year. Forty-one percent of those responding to the survey reported extreme confidence in their ability to get and hold a job, down from 45 percent in Q3 2024. It is, however, a three percent year-over-year improvement compared to Q4 2023.
“In a year full of economic uncertainty and job market fluctuations, it’s understandable that job seeker and employee confidence has diminished in the fourth quarter,” said Kyle Allen, executive vice president of sales and recruiting at Vaco. “Many have faced layoffs, job shifts, or delays in career progression over the past several months, contributing to a sense of instability. However, as we approach year-end, we’re seeing positive signs—including data that shows job seekers and employees are more confident now than at this time last year.”
“The tide is beginning to turn in Q4,” Mr. Allen said. “Organizations are making more strategic investments in talent and taking a measured approach to expanding their teams. Traditionally, the end of the year is a time when hiring slows as companies focus on finalizing budgets and preparing for the new year. This year, however, many companies are looking to add top talent—in both permanent and contract roles. It’s a prime opportunity for job seekers to capitalize on the last hiring push of 2024.”
Job Security
The percentage of respondents who said they are not confident in their ability to get and hold a job saw a six percent increase quarter-over-quarter, jumping from 26 percent to 32 percent in Q4 2024. This marks a two percent increase year-over-year from Q3 2024. It’s also the second highest percentage reported since the start of the Talent Pulse Report in Q3 2023.
“As we close out 2024, we’re beginning to see a renewed shift in growth after several quarters of stagnation,” said Kevin Jeewan, managing partner at Vaco. “Over the past 12-18 months, many organizations, with time on their side, were largely trying to recruit on their own and relied primarily on internal talent acquisition teams. Now, as more companies ramp up their talent investments, they are once again partnering with niche, professional recruiters who have deep and specialized networks to secure top talent. Speed and quality are of the utmost importance, especially as some organizations look to make key hires before the end of the year.”
“And while there have always been job seekers who hold out for the perfect role, last year and for most of this year we saw a majority of workers staying put, largely due to widespread economic uncertainty,” Mr. Jeewan. “Today, we’re finally starting to see a shift in people open to exploring new opportunities. With interest rates falling and business investments on the rise, job seekers are regaining confidence in the market and their ability to secure new opportunities. The largely remote work environment that characterized much of the last several years has stalled traditional promotion pathways and many feel overdue for the next step in their careers, both from a compensation perspective but also in title and responsibilities. There is a palpable ambition in the market today that we haven’t felt in a while. Employers and job seekers are ready to make moves.”
Financial Status
This quarter, Vaco found that respondents were slightly less confident that their financial situation was improving compared to Q3 2024. Forty-one percent of respondents reported feeling extremely confident in their ability to boost their financial situation in the next six months, down from 44 percent in both Q2 and Q3 2024. Year-over-year, financial confidence is up four percent.
Global Recruitment Outlook Steady for the Fourth Quarter Despite Year-Over-Year Decline
Global hiring intentions are holding steady for the fourth quarter of 2024, with a Net Employment Outlook (NEO) of 25 percent, though outlooks remain weaker compared to the fourth quarter of 2023 according to the latest ManpowerGroup Employment Outlook Survey. The survey, which gathered data from over 40,000 employers across 42 countries between July 1-31, reveals that while the NEO has increased by three percent from the previous quarter, it represents a five decline compared to the same period last year. This year-over-year decrease indicates that economic uncertainties continue to impact hiring plans, albeit with signs of quarter-over-quarter improvement.
Meanwhile, 30 percent of respondents reported not feeling confident that their financial status was improving, a five percent increase from Q3 2024. Despite the quarter-over-quarter rise, the Q4 figure marks a one percent decrease year-over-year, indicating a steady improvement in overall financial optimism.
“As companies look to maximize Q4 spend, many are starting to hire again, and in some cases, make long overdue hires to expand or bolster their teams,” said JT Turba, managing partner at Vaco. “There is strong demand, in particular, for candidates with deep subject matter expertise who can hit the ground running. Strong soft skills, adaptability, and problem-solving capabilities are also key traits we see hiring organizations prioritizing today.”
Related: More Than Half of U.S. Companies Anticipate Adding New Positions in the Second Half of 2024
“In terms of compensation, wage inflation has stabilized relative to what we’ve seen in previous years,” Mr. Turba said. “Many organizations have undergone a period of right-sizing this year as well, resulting in wage corrections that were likely overdue for the last 12 months. On top of all of that, those organizations that are hiring have been exploring variable or incentive-based compensation structures, including performance-based pay, transaction bonuses, and relocation incentives. These material forms of compensation are not only enticing top talent to join new companies, either on a full-time or project-based basis, but also to deliver.”
Career Advancement
In Q4 2024, 44 percent of respondents told Vaco they were extremely confident in their ability to advance in their careers. This is a three percent decrease quarter-over-quarter and a one percent decrease year-over-year. It’s also the lowest confidence level reported since the start of the Talent Pulse Report in Q3 2023.
Finally, the percentage of respondents not feeling confident in their ability to advance in their careers increased from 25 percent in both Q4 2024 and Q3 2024 to 28 percent in Q4, marking a three percent increase quarter-over-quarter and year-over-year.
“For organizations that follow a traditional fiscal calendar, Q4 is a critical time for budget planning, especially when it comes to forecasting headcount needs for the following year,” said Joslyn Osborn, managing partner at Vaco. “This year, however, there’s been a shift in the way businesses are approaching their hiring strategies. Due to pent-up demand and the need to replenish talent pools that have been stretched so thin for so long, many employers are loosening the purse strings ahead of schedule. Organizations spent much of 2024 under tight cost controls, focusing on saving rather than spending.”
“Many adopted a cautious approach, and deferred hiring while focusing on efficiency, cost-cutting, and optimizing existing teams to maintain profitability,” Ms. Osborn said. “While this strategy helped organizations weather the economic uncertainty, they’re now beginning to feel the weight of understaffed teams – and there’s only so long a company can operate with a reduced workforce before productivity, innovation, and morale start to decline. As businesses regain confidence, they’re investing in growth again, which includes adding talent in key areas to stay competitive.”
“In Q4, we’re seeing employers remain discerning about the candidates they’re willing to bring on board, often holding out for individuals who meet all of their criteria, with little willingness to compromise,” said Ms. Osborn. “This means candidates with strong analytical capabilities, proficiency in emerging technologies, and a high degree of emotional intelligence are in exceptional demand. For those eyeing a promotion or the next big part on a project, it’s important to understand that career progression won’t happen by chance – you’ll need to take initiative. Communicate your aspirations clearly and proactively seek out opportunities for advancement. Don’t wait for a formal review to express your interest in taking on more responsibility – schedule a conversation to outline your goals, demonstrate your value, and identify projects you’d like to take on in the year ahead.”
The Q4 2024 Vaco Talent Pulse Report reflects a slight decline in workforce confidence across all key areas measured. “As the workforce continues to feel uneasy about the job market and the economy, contract work remains a viable option for career growth and flexibility,” the report concluded.
Related: Hiring Confidence Slows as Employers Steer Economic Headwinds
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
