Labor Market Outlook: A Conversation with LinkedIn^® Economist Dr. Kory Kantenga

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Text: Wednesdays with Woodward (registered trademark) Webinar Series. Travelers Institute (registered trademark), Travelers, 15 Years. 

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JESSICA KEARNEY: Good afternoon and thank you so much for joining us. My name is Jessica Kearney. I'm Vice President of Public Policy here at the Travelers Institute. And I'm standing in for our host today, John Woodward. Welcome to our webinar series, and we're really glad that you're here. 

Before we get started, I'd like to share our disclaimer, as always, about today's program.

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Slide: About Travelers Institute (registered trademark) Webinars. Text: The Wednesdays with Woodward (registered trademark) educational webinar series is presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance or other advisors about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate.

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And then right off the bat, much appreciation to our partners for today's program, the Master's in FinTech at the University of Connecticut School of Business, The Center for Risk and Uncertainty Management at the Darla Moore School of Business at the University of South Carolina, MetroHartford Alliance, TrustedChoice.com, the National Association of Professional Insurance Agents, and the Connecticut Business and Industry Association. Thank you to all of our partners and a special welcome to all of their networks and members who are joining us today. 

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Slide: Wednesdays with Woodward (registered trademark) Webinar Series. Text: Labor Market Outlook: A Conversation with LinkedIn (registered trademark) Economist Dr. Kory Kantenga. Logos: Travelers Institute (registered trademark). Travelers. Master's in Financial Technology (FinTech) Program at the University of Connecticut School of Business. Center for Risk and Uncertainty Management, Darla Moore School of Business, University of South Carolina. MetroHartford Alliance. National Association of Professional Insurance Agents. TrustedChoice.com. Connecticut Business & Industry Association. 

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So on to our program. For anyone involved in hiring decisions, the last few years really undoubtedly have been an interesting ride. So we've managed through what some call the “great resignation,” others call it the “great reshuffle.” And then more recently, headlines have declared the “big stay.” So are workers choosing to stay longer in their current positions? We're going to dig into that. But regardless, all of these trends have been with us in the last few business cycles. 

And we continue to hear from you and our business partners that attracting, hiring and retaining talent continues to be top of mind. And if you've joined us for this series before, you know we often do economic forecasts. That's something-- our bread-and-butter topic that we do almost every quarter. But given all of these recent continued conversations with you and our other partners, we've been talking about and are glad that we're able to do today a full dedicated hour on the labor market in particular to help us all inform our hiring and retention strategies for 2025.

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Slide: Speakers. Two portrait photos. On the left is a woman with long blond hair wearing a black blazer. Text: Jessica Kearney, Vice President, Public Policy; Travelers Institute, Travelers. On the right is a man with short black hair, wearing a navy-blue suit. Text: Kory Kantenga, Ph.D., Head of Economics, Americas, Economic Graph Research Institute, LinkedIn. 

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And for that, we're going straight to our speaker, Dr. Kory Kantenga, who serves as Head of Economics of the Americas at LinkedIn's Economic Graph Research Institute, where he leads the Macroeconomics Research Program. And I'm sure many, if not most of us here, are on LinkedIn in our professional lives. So we're thrilled to bring insights from LinkedIn's team to our session today and to bring them to you. 

Dr. Kantenga holds a Master of Science and economics from the London School of Economics and a Ph.D. in economics from the University of Pennsylvania. His expertise includes employment, wages, skills, technology, job search, competition and innovation. So take note of all those topics. And if you have any questions for Dr. Kantenga, please drop them in the Q&A at the bottom of the screen.

He spends his days at LinkedIn trying to help us all better understand the state of the workforce, so we're really thrilled to welcome him here today. Dr. Kantenga, welcome to the program. And I'm really pleased to give you the virtual floor to give us an update on the state of the labor market.

KORY KANTENGA: Thanks so much for having me. Great to be here. All right. So let's just jump right in.

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A new slideshow presentation opens. Logo: LinkedIn. Text: The State of the Labor Market, 4 December 2024. Kory Kantenga, Ph.D., Head of Economics, Americas. 

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So I'm going to talk to you a little bit about the state of the labor market today. Talk about the broader outlook of what's happening and dig into the details about why that matters for the labor market. 

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Slide: LinkedIn Economic Graph. Text: How LinkedIn connects the dots between hiring, business development, and talent engagement strategies. Circles with corresponding graphical icons rise towards the top of the screen with text: 1 billion Members, 69 million Companies, 67 million Job Seekers per Week, 41 thousand Skills, 136 thousand Schools. Dots with lines appear above the circles with text: Real-time talent Market data, Targeted job recommendations, 360 Benchmarking, Learning Roadmap, Manager development paths, Course Recommendations. 

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So I just want to start with talking about the Economic Graph. So I am a part of LinkedIn's Economic Graph Research Institute. So what is the Economic Graph? Well, it's how we connect the dots on LinkedIn between hiring, talent strategies, business development strategies. It's all of our data. The 1 billion members on LinkedIn, the nearly 70 million companies with pages, the 67 million folks who come on LinkedIn every week to look for opportunity. And they tell us about their skills and their schools. So that is the Economic Graph. 

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Slide: Our Vision. Text: Create economic opportunity for every member of the global workforce. A photo of three smiling coworkers is on the right. 

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And I like to think of it as the foundation for our vision at LinkedIn, which is to create economic opportunity for every member of the global workforce.

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A slide features the article headlines: America's hiring boom is officially over. Lousy Jobs Report Forces Fed to Reckon with Hard Landing. Blowout U.S. employment report reinforces economy's resilience. The no-hire, no-fire labor market. U.S. job openings rose in October but hiring slowed, in a mixed picture of the labor market. The Fed Is Thinking Differently About the Labor Market. Will It Last? 

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So I always like to start with the headlines, because you see the headlines, I see the headlines. Sometimes I can't even make sense of what they're talking about in the headlines, and I do this for a living. So you'll see headlines like the hiring boom is over. There was a lousy jobs report. There was a really resilient jobs report. Headlines about no one's getting hired, but no one's getting fired. And we see a mixed picture for the data, even just from yesterday's JOLTS report. So you would not be in little company if you were confused about what's going on in the labor market right now. But hopefully our conversation today will help clarify some things. 

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Slide: A year of solid growth, Text: Real GDP Year Over Year Average Growth Forecast, 2024. World 3.0%, EU 1.0%, APAC 3.9%, LATAM 2.1%. On the right is a map of the world with percentages in green. On the map, select countries are labeled. Canada: 1.2%, U.S. 2.8%, Brazil 3.1%, UK 1.0%, France 1.1%, Spain 3.0%, Sweden 0.8%, Netherlands 0.8%, Germany 0.0%, Italy 0.6%, GCC 2.1%, China 4.8%, Japan 0.1%, India 6.9%, Singapore 2.9%, Australia 1.2%. Source: Oxford Economics, International Monetary Fund. 

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So let's just start with the big picture growth. So this is just showing you how much are we increasing our exchange of goods and services across various countries in the world. And why does that matter for the labor markets? Because labor is an input to creating goods and services. And at the end of the day, what if the economy is not doing well at a broad level? 

The labor market is not going to do well either. And if you don't have a healthy labor market, then you can't support the creation of goods and services. So growth is intimately tied to what's happening in the labor market, and the labor market supports growth. So we can't think of one without thinking about the other. So it's important just to get a read on that.

And so overall, we do see across the board, with the exception of Germany, which has special challenges at the moment with high interest rates, there are prospects for growth. And we're expecting for this year to see positive growth pretty much across the board. Around the world, about 3%-- 3% is what we saw prior to the pandemic. So very much on trend in some places and outperforming in others.

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The numbers change to blue. Text: Solid chances of avoiding recession next year, Real GDP year over year Average Growth Forecast, 2024. World 3.0%, EU 1.5%, APAC 3.8%, LATAM 2.6%. Canada 1.9%, US 2.4%, Brazil 2.0%, UK 1.5%, France 1.0%, Spain 2.2%, Sweden 2.4%, Netherlands 1.5%, Germany 0.7%, Italy 0.8%, GCC 4.0%, China 4.5%, Japan 1.2%, India 6.7%, Singapore 2.6%, Australia 2.0%. 

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And we think about next year, similar story. Of course, there are risks. This is just a forecast. But the current story is that we are expected to continue on this trajectory of growth. Some places will continue to get back to their long-run growth trends, and there are some places that may under- or overperform. And so overall, we are still expecting to see a healthy global economy next year. Of course, there are risks, and we can talk about those risks, but that's just the baseline expectation at this time. 

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Slide: LinkedIn feed posts suggest a slower but steady labor market. A line graph on the right is labelled Global Feed Post Activity with a blue line for Layoffs and black line for Recession. The x-axis ranges from Oct 2021 to Oct 2024 in 3-month increments. The y-axis is Indexed 4-week Trailing Average ranging from 0.0 to 20.0. The black Recession line rises from zero in Oct 2021 and spikes at 16 at July 2022, then dips below 12 before October 2022, spikes around 14 in January 2023, then falls and stays around 8 through 2023 and lowering to around 2 by July 2024 before spiking around 6 before October 2024. The blue Layoffs line remains steady with small spikes around January 2023 rising above 4.0 before April 2023 then declining and remaining steadily around 4.0 with a slight increase after January 2024. Source: LinkedIn Economic Graph. 

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So let's start getting into the labor market. So on LinkedIn you go-- if you are on LinkedIn, you can go on your LinkedIn and you see posts on your feed. Sometimes they'll just be talking about folks with a new job, their career opportunities, but often they'll be talking about what's going on in the world. So they may be talking about layoffs or recessions. 

And so we track that data in an anonymized way and get a sense of what people are talking about on LinkedIn. Because if you want to know what's going on, often the first place is just to see what people are talking about and their sentiments about it. And when we look at the feed posts, we see once interest rates started going up, and that's that black line in April 2022, there was a lot of talk about recession.

It started to taper off as inflation reports came in better or better than expected. And then we saw by the end of last year, inflation was looking much better than what had been anticipated. So a lot of that talk dropped off. Of course, we saw a bad jobs report in the fall, and that raised talk of recession, and the next jobs report was a rebound of that. So that talk sort of dissipated. And so overall, we are seeing that those fears of recession have definitely receded.

And then we think about the labor market. Folks have been talking a lot about layoffs. And so we have seen that chatter go up, which suggests that the labor market is slower, but it's still pretty level. It's pretty steady. It's not going up in an extreme way. It's kind of tapered off and leveled out, which suggests that the labor market is probably running slower but steady.

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Slide: Claims data also indicate a slower but steady labor market. A line graph on the right labelled U.S. Joblessness Claims has Continued Unemployment Claims in blue and Initial Unemployment Claims in yellow. The x-axis has dates from January 1, 2022, through October 17, 2024. The y-axis on the left ranges from 500,000 to 3,000,000 for continued claims, and on the right ranges from 50,000 to 400,000 for initial claims. The blue line starts above 1,500,000 and dips below in 2022, then rises during 2023 and steadily increases towards 2,000,000 by October 2024. The yellow line goes up and down within 200,000 and 250,000 throughout the timeline. Source: LinkedIn Economic Graph. 

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And we can look at hard data to confirm that. So we'll look at the U.S. jobless claims data. When we look at that, we also see a labor market that's probably a bit slower, because the number of folks who are coming and claiming unemployment each week and have already claimed it, that's continuing to rise a bit. But the number of folks who are initially claiming it, meaning that they've probably been subject to a layoff, that's been pretty steady and actually recently falling a bit. So overall, we do see this picture that the labor market is probably running slower but definitely looks steady when we look at a lot of indicators. 

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Slide: LinkedIn members are less confident in their prospects to progress their careers. A bar graph on the right labelled Workforce Career Confidence August 2024 vs August 2023 has a line down the center at 0. The x-axis is labeled with numbers in increments of 5 from negative 15 to 15, and the y-axis is labeled with countries. Three countries are in green to the right of zero with Japan at 15, Brazil around 10, and UK to the right of zero. The rest of the countries are in red to the left of zero with Italy and India to the left of 0, Germany, U.S., and Spain approaching negative 5, Netherlands Australia, and Canada around negative 8, and France around negative 13. Source: LinkedIn Global Talent Trends. 

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So then you ask yourself, well, why do people feel bad about the labor market? Because you can check the news, you can check LinkedIn. People don't feel great about where the labor market is. And when we survey our members and ask them what's their confidence to make progress in their career, across a lot of countries, we do see that workers are less confident this year than what they were last year. 

And so what's really driving that? If the labor market is steady, even though it's running slower, why do people not feel great about it?

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Slide: The pace of hiring has slowed across the globe. A line graph on the right labeled LinkedIn Hiring Rate has 10 lines color coded to Australia, India, Brazil, Netherlands, Canada, United Arab Emirates, France, United Kingdom, Germany, and United States. The y-axis ranges from 0.5 to 2.50 for 3-month Trailing Average (Indexed to August 2018) and the x-axis ranges from August 2018 to August 2024 in 6-month increments. All countries dip towards 0.50 around August 2020 and then rise. India rises the highest at above 2 around February 2022 and then declines to 1.5 by 2024. Brazil rises to above 1.5 in 2022 before steadily declining to below 1.5 by 2024. The rest of the countries including the U.S. rise in 2021 and 2022 between 1.0 and 1.5 and then decline through 2024. The U.S. is below 1 by August 2024. Source: LinkedIn Economic Graph. 

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Well, you can just look at how hiring looks like, because that's really what drives opportunity for folks. If they can get hired, they can move to another job, they can move up the corporate ladder, they can increase their income, improve their quality of life. So if hiring is very slow, there aren't many opportunities out there. And it also doesn't put pressure on your employer to increase your standards of living where you currently are working. 

So we've seen the pace of hiring slow. That's what you're seeing in these lines here. We saw that sharp drop-off from COVID, and then we saw that great reshuffle where the pace of hiring accelerated very strongly across many markets. And then around the time when interest rates started going up, we saw hiring slow down. And it's been gradually slowing down in a lot of places ever since.

So you can see in the black line, that's going to be the U.S. towards the bottom. That's clustered with a lot of countries, like Canada, France. We've seen this hiring continue to slow. There was a bit of leveling out at the beginning of this year, but it didn't endure. And then we also see in emerging markets that leveling out has endured. So at the very, very top, you see India, you'll see Brazil, United Arab Emirates. In those emerging economies, the pace of hiring has leveled out, and it's well above what it was prior to the pandemic.

Elsewhere, we see Germany's kind of slowed down to where they were, about where they were right before the pandemic. And then you see a lot of countries, advanced economies, that have slowed down, and they're about 10% to 15% slower in terms of the pace of hiring that we see during the pandemic. And on LinkedIn, we track the pace of hiring, because we see people changing their profiles. Every time someone changes their profile on LinkedIn, that's a signal to us that they've been hired, and we track that over time.

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Slide: The slowdown is concentrated in interest-rate sensitive sectors. A bar graph on the right labelled U.S. Industry LinkedIn Hiring Rate September 2024 vs September 2018 has a vertical line at 0%. The x-axis ranges from negative 35% to 15% in 5% increments. The y-axis has a list of industries. The top three are in green to the right of zero with Consumer Services around 10% and Education and Utilities below 5%. Hospitals and Health Care is around 0. The rest of the industries are in red to the left of zero with Government Administration, the lowest towards 0 and Construction around negative 5%. Entertainment Providers, Financial Services, and All are towards negative 15%. In the negative 20 to negative 25 range are Accommodations and Food Services; Transportation, Logistics, Supply Chain and Storage; Technology, Information and Media; Professional Services, Retail, Administrative and Support Services, and Manufacturing. Real Estate and Equipment Rental Services is negative 30%. Source: LinkedIn Economic Graph. 

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And where is this slowdown happening? Well, if we just look prior to the pandemic versus closer to now, it's really been concentrated in interest rate-sensitive sectors. So that's real estate, manufacturing, retail, increasingly professional services, tech information, media, financial services. And there are areas that are not particularly sensitive to interest rates or even sensitive to business cycles. 

So consumer services, those are going to be things like repair and maintenance, education, utilities, government, things that are necessary to maintain our quality of life. And then, of course, health care is another big one out there that has its own secular trend as populations are aging. So it's really the interest rate-sensitive sectors that have seen a large bulk of this slowdown.

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Slide: Are we in a "Big Stay"? 

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And so hiring is slowing down. And then you ask yourself, well, if hiring is slowing down, then workers can't be quitting very much. They have to be sort of staying in place. Well, hiring slowing down doesn't mean people don't get hired. It just means that you're not seeing as much turnover as what you were seeing before of new people coming in the door into new roles. 

And when you don't have as many people coming in to new roles, you won't necessarily see people leaving a job to go to new roles which open a new-- another role. So you kind of have this virtual circle of if there's a job opening, I'll take a job opening. My seat potentially becomes available, and then someone else can move and take that seat. So you see this virtuous circle between hiring and quits. So they track each other pretty closely.

So you often see this narrative out there about a big stay. And the question is, are we in a big stay? And what does that even mean? Well, it turns out, actually, if you think we're in a big stay now, you actually have to believe we were in a big-- you potentially have to believe we were in a big stay prior, well prior to the pandemic, in the years prior to the pandemic.

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Slide: Quit rates in many industries have been closer to record highs than lows. A graph labeled Quit Rate Ratings has lowest period on the left and highest period on the right. A list of industries down the left have either a red dot on the left side or a blue dot on the right side. The lowest in red is Information. Construction, Professional and Business Services, Retail, and Real Estate and Rental and Leasing are in red towards the center. Plotted in blue from left to right from the center are Total Nonfarm, Wholesale, Leisure and Hospitality, Manufacturing, Finance and Insurance, Transportation, Warehousing, and Utilities, Government, Healthcare and Social Assistance, Other Services, Mining and Logging, and Private Educational Services. Source: Job Openings and Labor Turnover Survey (August 2024); LinkedIn Economic Graph. 

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But we can just look at what quit rates say, because quit rates really tell us about, do you have the opportunity to move to another job? And we do see that in many industries, we've been closer to record highs in terms of the great reshuffle quit rate than we are to record lows, which is after the Great Recession. 

So really the real big stay was after the Great Recession. We saw the lowest quit rate recorded in the Job Openings and Labor Turnover Survey during that time. And in a lot of industries, we still see that folks are quitting. They are moving to new jobs, not at the pace of which they were, because hiring slowed down. But there are definitely places where quitting is still happening and taking place. And you can see finance and insurance up there right under construction.

And of course, there are places that are particularly slow, like information, which includes a lot of tech, media and broadcast firms, where we've seen lots of headlines about slowdown and layoffs. So that's an area where it's probably pretty clear that there might be something of a big stay. Or professional and business services, which is also slowed down significantly under the burden of higher interest rates. So we don't see as many opportunities for folks. So they're not moving as much. But overall, we do see people moving quite a bit.

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Slide: 8 out of 15 sectors have had quit rates near or above quarter-century averages. 

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And just to hammer that point home, eight out of the 15 sectors have had quit rates near or above their quarter-century averages. 

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Slide: Only 2 out of 15 sectors have had layoff rates above quarter-century averages. Information & Transportation, Warehousing, Utilities. 

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And if we think about layoffs, there's lots of headlines about layoffs, but layoffs are actually pretty low by historical terms and actually pretty steady. The layoff rate hasn't changed much this year. But only about two out of 15 sectors have had layoff rates above quarter-century averages. Of course, those are information, which is including tech, media, and then transportation, warehousing, utilities, which is going to include some big logistical companies. 

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Slide: Job search intensity increasing in response to slower hiring. A bar graph on the right labeled % Change in Applies per Applicant August 2024 vs August 2023 has an x-axis of 0% to 25% in 5% increments and a list of countries on the y-axis. UK is at the top near 25% followed by U.S. below 20, Singapore, France and Australia above 15, Netherlands and Germany at 15, Canada lower than 15, India above 10, Italy below 10, and UAE below 5%. Source: LinkedIn Global Talent Trends. 

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And so what does this all amount to? Hiring is slowing. There's less quitting. People are still quitting, but there's less quitting. This amounts to for workers that they're having to search more intensely for jobs. So we can see on LinkedIn the number of applies per applicant. And we see that rising all across the board. So people are having to put in more effort in order to get the same result or potentially a worse result. 

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Slide: Demand for flexible work exceeds supply. A bar graph on the right labeled U.S. Job Postings and Applies by Workplace Type September 2024 has a y-axis ranging from 0% to 50% in 10% increments. On the x-axis is Hybrid % of Job Postings above 10% and % of Applies at 20%, Remote % of Job Postings is less than 10% and % of Applies is 40%. Source: LinkedIn Economic Graph. 

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And one place where we see this effort being put in very strongly is actually in flexible work. So we can also see whether people are interested in remote or hybrid work. And overall, we see the number of applies to remote and hybrid work is about 60% in the U.S. So of all the applies, about 60% of them are going to remote and hybrid work. But there's only about 20% of the job postings are remote and hybrid. So there is far much more demand than there is supply. So if you're looking for remote work, you're having to put in a lot more work in order to land that role. 

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Slide: The State of the Labor Market. Text: 1, Employment and job security is strong, Unemployment and layoffs remain low. 2, The labor market has held up but is still slowing, Fewer hires leads to fewer quits, leads to fewer job openings, leads to wage moderation. 3, Worker sentiment reflects the enduring slowdown, not the overall state. 

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So I'm going to just summarize for you state of the labor market. So we do see employment and job security being strong, meaning that layoffs are low. The U.S. economy is still adding jobs. Unemployment is low. So that's the kind of headline that you always have to keep in mind when you see lots of negative stories about the labor market. 

Now, the reason why you might be seeing negative stories about the labor market is because the labor market has held up, but it's still slowing, and it's been slowing for a long time. It's been slowing for about two years since interest rates started going up, and we see fewer hires. You're going to be seeing fewer quits. Fewer quits means there's fewer openings to backfill. And as a result, you're also seeing wage moderation. So wages are still going up, and they're still outpacing, they're actually outpacing inflation now, but there's wage moderation as well.

And so all of that slowdown and the enduring nature of this slowdown has weighed on worker sentiment. But that sentiment that workers are reflecting probably isn't reflective of the overall state of the labor market. We actually have had a really good run of the labor market in the U.S. from the great reshuffle up till now, measuring that in historical terms. So it's just always important to keep the context that things are not necessarily trending in the right direction, but they're coming from a very high point. So there has been a lot of resilience in the labor market as a result.

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Slide: Thank you. On the left is a QR code above the text: Follow on LinkedIn. 

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And so that's all I'm going to talk about explicitly today. And then I'm just going to say you can follow me on LinkedIn, you can follow my team, which is the LinkedIn Economic Graph on LinkedIn. And I look forward to the conversation, Jessica. 

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The slide presentation transitions to a split screen of the speakers. 

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JESSICA KEARNEY: Awesome. Thank you so much, Kory. That's very valuable information. And as I mentioned, something that we get asked about often on our program to talk through. And I think as people are thinking ahead to their 2025 plans, I think that's going to be very useful. 

Can I start just as a, I guess, one step-back question. So you just gave the summary of your presentation in the labor market about slower but steady. Layoffs are low by historical terms. Workers are a little bit less confident. And of course, the very enlightening insight that you had about the demand and supply for remote work and flexible options.

What are you hearing from hiring managers and business leaders about how they are taking all of that information in and factoring it into what they may be planning for next year? Do you have any line of sight into what you've been hearing? I know you spend most of your days traveling and talking to business folks all over the country and the world.

KORY KANTENGA: It's a tough time to be a talent leader right now. There's just so many things happening. There's trying to decide where you're going to work. There's trying to decide what technologies you're going to adopt and how you're going to adopt them and how this is going to impact the workforce. It really just feels like there's just a bit of a flashpoint in talent along with this flashpoint in the labor market. And so thinking about how you navigate these circumstances have been challenging.

And I would say over the last year, what has kind of been very much top of mind for a lot of folks in talent has just been the economy, uncertainty. Where are things going? Are they going to continue to slow down or are they going to pick up? And if you're in a position where you're hearing things about the labor market slowing down, but you still have talent shortages, you're wondering what is going on. That is not my lived experience as a talent leader. I can't get people in the door. And you're telling me that things are slowing down and that they're not that great.

So we're just starting to see a lot more dispersion in experiences. It's not like the great reshuffle where that rising tide lifted all boats. As the waters have receded, folks have found themselves in different places, and they are really just focused on trying to figure out how to navigate it.

JESSICA KEARNEY: Have you seen any areas or industries where that lived experience is furthest apart? Or are there any industries that stick out to you that might be having that reaction that you just mentioned of, hey, that's not my experience. That's not what I've just lived through over the last 12, 18 months.

KORY KANTENGA: Definitely. Well, health care is the place where you go when you want to talk about labor shortages. That's one area where they've been very enduring and prolific. And part of that has to do with the pandemic. The fact that we had a lot of folks actually leave health care during the pandemic because it was a tough time to be in health care. And there were all these other opportunities elsewhere during the great reshuffle that were paying well. So as a result, a lot of people stepped out of health care, and health care has been struggling with that aspect for a while as well.

And then, of course, there's the fact that we're not getting any younger as a population in the U.S. So demand for health care services is not decreasing, it's increasing. And with the pandemic, you had a lot of folks who wanted to get certain health services but didn't before. They just sort of left that off the table. And now they're coming back and saying, actually, I want to do this. I want to do that, and I need this service and that service, or I have pain here or there that I was kind of ignoring for three years, but now I don't want to ignore it anymore.

So you have this surge in demand for services in health care, especially when we think about retirement and retirement home skilled nursing facilities where there are just not enough workers who are working there. And they're not able to attract enough workers for the wages that they're currently offering. So their experience has been very different.

And every time you see the jobs report, a lot of jobs are being added in health care as a result, because they have a very robust labor market that's very challenging. It's what we call-- often we'll say it's a tight labor market in the sense that it's more competitive for employers than it is for employees. Employers are having to compete with each other for workers. Workers aren't having to compete with each other as much for jobs. So health care has had a very different experience than most.

And of course, on the other end of the spectrum, you have manufacturing, and you also have tech. So manufacturing, they don't like high interest rates. High interest rates means that your credit card bill is getting higher. You're not going to buy as many goods. So there's a lot of momentum in services, because people couldn't get them during the pandemic. But right now, we are seeing that they've pivoted away from goods to services. And as interest rates are higher, you're not purchasing so much for goods. When you're deciding what to do with your budget, you're going to go for the services. You're going to go for the experiences that you couldn't have for the last three years.

So that's really hurt manufacturing. And higher interest rates, of course, across the globe has hurt manufacturing globally. So they definitely struggled, and we've seen that as a result. That labor market has slowed. One of the reasons why you saw Germany with no growth has a lot to do with manufacturing for them, because that's a big industry of growth-- that drives growth in that country.

And then, of course, for tech, we've seen that tech had a big hiring spree during the great reshuffle and then slowed down significantly as interest rates went up and had this recalibration. And so tech's been going through this recalibration for a while. And then about last summer on LinkedIn, we saw hiring start to level out in tech.

So hiring has been slow. It's still slow in tech, but it has pretty much leveled out since last summer. And so they just had a unique experience of people pivoting to online services, very high demand for online services, and then suddenly there was a whiplash of folks going back into offices, commuting again, drop in demand for online services. And then they had to recalibrate their expectations for the future.

JESSICA KEARNEY: Yeah. I think you talked about headlines in your opening remarks. And many of us as we're reading them, and you even said yourself, struggling to make sense of some of the headlines coming out. I'm sure many of us have seen headlines in tech and some of the labor force there. And you mentioned goods versus services. And could you talk for a minute about what we're seeing on the inflation side of goods versus services and how that might be factoring in here?

KORY KANTENGA: So the good news on the inflation front is that inflation for goods, we pretty much hit that target this year. So from the side of you're sitting on the Federal Reserve Open Market Committee, you're sitting on the FOMC, you're not worried about goods inflation anymore. That seems to have sorted itself out. Interest rates did their job there.

Where things have not necessarily come down as much is in services. Particularly a lot in housing services. So we think about housing as a service. And so we've seen a lot of stickiness there, and that has a lot to do with supply. And then also within certain local markets, there's demand in the sense that there's a lot of folks there and not a lot of housing or maybe not even a lot of space to even build more housing.

So housing has been a very sticky area for inflation. I think that's going to remain a challenge. I think there's going to have to be a variety of solutions there that address the demand side and the supply side in order for that to come out on target. But the Fed doesn't have control over that. So they're focused on other services. And we have seen services inflation come down, but it's kind of looking a little sticky at the moment. So there might be more work for them to do.

JESSICA KEARNEY: Good, well, something to keep an eye on. We have a lot to unpack still in what you said and a lot of topics to discuss. I do want to pivot here just for a moment and get the audience engaged with an audience polling question. So we'd love to hear from you, everyone who's dialed in today, about how you're thinking about your own labor market and the labor within your organization.

So what strategies have you prioritized in terms of retaining your top talent within your organization? You can pick one or two or three, the top ones that you and your teams have been focused on. So we've got competitive compensation and benefits, professional development opportunities, helping people upskill, creating a positive company culture, work-life balance, looking at your onboarding experience, and making sure that's got a positive experience for employees and mentorship programs.

So I see responses coming in. Let's go ahead and share the results. So, Kory, I'd love your feedback here. It looks like more than half of our audience have said they're prioritizing competitive compensation and benefits, company culture and work-life balance. Can you comment at all on those trends and what you're seeing at LinkedIn?

KORY KANTENGA: Well, they definitely got the first one right. Compensation always rates among one of the top concerns when we ask our members what do they care about, what are they looking for this year. So being able to provide competitive compensation is always going to give you an advantage in the labor market. Because at the end of the day for a lot of folks, the labor market is just a tool that they're using to improve their quality of life. So to the extent that you can help your workers do that, that's always going to be a top concern.

And then, of course, since the pandemic, we have had a lot more exposure to working in different environments. And so as a result, people have experimented with flexibility. And you know what? Workers realize that they love it. They like it. The majority of applications on LinkedIn are going to remote and hybrid work.

The only reason that it's not even higher than what it is, is because there isn't more work to apply to. And so if there was, you can be sure that that would be the case. So about 40% of the applications are going to remote jobs on LinkedIn. I guarantee you if there were more remote jobs, that would be well above 50%, as it was at various points in the last couple of years. So flexible work, work-life balance, that is a really important aspect for workers.

And another area that's really important as well has to do with upward mobility in your career. So that's going to be tied into professional development opportunities and skilling, but not just being able to improve your skill set but actually being able to move up and having that skill set that allows you to move up in the company and having opportunities within the company to move up.

So we often see-- so we actually see on LinkedIn that companies that are more likely to allow people to move internally to another role, maybe they're not necessarily moving up the chain, but they are moving to another role, they retain talent more. So that's something that's important to people, opportunities and advancement, not just that you're skilling them and that you're training them to do the job they already have, but they have a chance to actually move up and improve their quality of life that way.

JESSICA KEARNEY: Yeah, that makes a lot of sense. Thank you for your readout on that. That's always interesting to get the audience's pulse on what's happening in their lives.

We have a few questions coming in, and I want to get to one question about basically the data that you have access to at LinkedIn. We just saw all the charts that you shared and heard a little bit about what type of data you look at. Many of us when we're looking at economic forecasts or headlines, we're looking at data from the Bureau of Labor Statistics, for example, among other government sources.

But you mentioned you've got a billion members at LinkedIn. And that must give you just incredible insights that others don't have. So where do you feel like you might have a little bit of an edge or where are the areas where you feel like you get to scrape some insights that you might not have elsewhere?

KORY KANTENGA: Sure. So I'll just tell you a little bit about my background. So I am a macro economist and a labor economist. And so that's my area. That's my playground. That's what I like to do. That's what I like to study. And labor economics is really about how people spend their time. That's a fundamental what's it about in economics. I think about it broadly as how do people make decisions when they have material constraints. And time is one of those material constraints.

JESSICA KEARNEY: Yeah, of course.

KORY KANTENGA: So for me, being a labor economist, LinkedIn is a great place to be in terms of thinking about the data. I would say what I've learned, so I've been here over three years, what I've learned about the data that I like is that it's able-- because we have over a billion members, because there are a lot of companies, it captures some of the breadth that you see from these massive statistical surveys. So you'll see the jobs report that's coming out on Friday. That's going to be from the current establishment survey, which is surveying firms to get a sense of how many jobs are being added.

So from LinkedIn, we can see data that allows us to possibly predict what that number is going to be. So we do get some of that breadth. And then we also can see across various industries. So people often will say, oh, LinkedIn is just white-collar workers. No, we have representation across all industries on LinkedIn, across all education levels.

And another nice thing, and this is me just being-- coming from an academic background, is that we get the depth of administrative data. And so if you're looking to ask research questions or really understand behavior, administrative data is where you always go to. And so we have that advantage of both kind of having that broad breadth of data from these mass surveys, but also that advantage of having depth with administrative microeconomic data. So it's been really great for me.

And then also we're a professional network and a platform, and that allows us to see both sides of the market, which in a lot of cases with data you don't see. So for the Bureau of Labor Statistics, for the employer side, they're doing the current establishment survey. For the worker side, they're doing the current population survey.

But for us, we actually are able to see both sides of the labor market. We can see the job-seeking behavior from workers, and we can see the talent hiring strategies from firms. So for me, this is just a really great place to be. You're kind of sitting in the middle, being able to just look around and see everything that's happening. So it's a fun place to be if you're into the research topics that I'm into.

JESSICA KEARNEY: Yeah, that's great. And thank you for answering that. I know for us sharing all these economic forecasts, it's a really fascinating piece and I guess look behind the curtain, if you will.

So I want to ask you. So we have a lot of audience members on the line today who might be making hiring decisions for their own teams and their own organizations, many from independent insurance agents and brokers, for example. I know you speak to business audiences all the time. Are there certain trends or realities in today's labor market that you think hiring managers might be underappreciating at this moment?

KORY KANTENGA: Certainly. We do not talk enough about population aging and what that means for talent and talent strategies. By some estimates, there are about eight retirees every minute this year. And that number, of course, is going to continue on. And the share of people who are going to be over 65 is only going up, and it's only going to continue to increase up until 2050.

So we are looking at a wave of retirements. And that wave at some point is going to crest. And so if you're not thinking about that as a talent leader, planning for the next 10, 20 years, then you really are missing out on a big aspect that's going to shape the labor market. It won't shape it tomorrow. It may not even shape it necessarily in the next five years. But this is going to accumulate, the number of folks who are retiring is going to accumulate, and that's really going to matter.

So you're going to have to think about things like how do you keep older workers in the labor market staying in? So we did see-- we actually saw an increase in retirements for boomers based on LinkedIn data last year. So how are you going to keep them engaged and in the workforce considering that they don't have a long career horizon potentially?

And then also most of your workforce is going to shift to millennials and Gen Z, and at some point, you're going to have Gen Alpha who are going to join the workforce as well. And I often talk to folks about-- people talk a lot about millennials, and I will disclose that I am a millennial, and I guess they don't always realize they're talking to a millennial when they are talking about millennials, because they often disparage millennials, because millennials pose challenges for them as talent leaders in terms of their recruitment retention.

And I always say to folks, I say, well, disparaging generations of folks is not a talent strategy. So how are you going to engage millennials and keep them at your firm and create a good brand for yourself among this generation and understand that their needs and wants are very different? Millennials like flexibility. They want to have more hybrid and remote opportunities, whereas you may not necessarily see that reflected in leadership in the decisions that they make. So how are you going to maintain this workforce when there are these multigenerational factors to navigate? And I just don't think we talk enough about it.

JESSICA KEARNEY: Yeah, I think generations in the workforce has been another topic that we've seen a lot of interest here on our programming. We've done some on Gen Z in particular recently. And we just did a webinar a few weeks ago on emerging talent strategies, kind of same along the lines of what you were just talking about.

I guess I want to take an opportunity here as we're talking about different folks at work and different cohorts at work. I know at LinkedIn you recently produced some research on women in the labor force and some of the trends that you've seen post-pandemic and as it relates to flexible work. Could you comment at all on that?

KORY KANTENGA: Sure. So I will also do a small plug. So we do a monthly newsletter on the state of the labor market at LinkedIn. And so the last newsletter was on global gender gaps. So kind of looking and taking stock of what are barriers to women being in the workforce?

And why is that important? Well, if the population is aging, it's going to become disproportionately more women, just because of the fact that women live longer. And so if you are a country, you cannot afford to have more than half of your population sitting on the sidelines of the labor market.

So what are the barriers for women being able to participate fully in the labor market, which differ across countries? So that's why that's such an important research to continue to do, because it's not going to become less of a problem in the next 10, 20, 15 years. It's only going to become the fact that we need women to be in the workforce to support our pension schemes, to support our production of goods and services.

So what we do see is that there are some aspects that are barriers. So for example, on flexible work, women disproportionately like flexible work. And in a lot of places, they just can't find it. Take France, for example. It's just not available for women. So that could potentially become a barrier to a lot of women entering, staying in the workforce. And we also look at several other aspects like relocation and career breaks. So I definitely invite folks to check out that newsletter.

JESSICA KEARNEY: Great. Great, perfect. Thank you. So let's zoom out a little bit and look at the broader economy and some public policy issues at hand. So as we know, the Fed has cumulatively cut interest rates 75 basis points over the last few months, and they're scheduled to meet again within the next two weeks to make another evaluation. So as we're seeing these fluctuating interest rates, what do you expect to see in terms of impacts on hiring, business investments, different economic sectors? What are the things that you're going to be watching in 2025 as we continue to see this evolving policy from the Fed?

KORY KANTENGA: Well, when we think about hiring in the labor market and the Fed's actions, it's important to remember that the Feds, when they raise interest rates and cut interest rates, it's actually very asymmetric in terms of the impact. So when they raise interest rates, we even saw this on LinkedIn the next day, the number of job postings in tech for SMB started coming down and started trending down the next day after they had announced the interest rate hikes.

But once they cut interest rates, it takes quite a while for that to have an effect. And so I wouldn't expect to see much action on the labor market over the next six months. What these rate cuts might do is put a bit of a floor under the labor market in the sense that maybe there's kind of a bottom to where it can't slow any further, and so things level out. But we're continuing to see things slow a bit in any case.

So generally, for hiring, don't expect much activity. Maybe by next summer enough time will have passed for those rate cuts to accumulate and solidify and for employers to start opening their books again, spending more on operations, expanding their labor force. For business spending, business spending has actually been trotting along pretty steadily and growing.

So we haven't seen the same effect on business spending that we've seen on hiring where hiring slowed pretty consistently. Business spending has been actually running fairly stable. So I would expect that to continue as well. And often when you see rate cuts, business spending will kind of maybe fluctuate a little bit. But right now, we haven't really seen a huge pickup in business confidence. So I wouldn't expect to see a huge pickup in business spending just yet. Again, probably by next summer.

What I think we will see momentum is growth in these sectors that have been more repressed by higher interest rates. So that's financial services, manufacturing, tech, professional services. I expect to see more momentum there as rates come down, because that's what's really been keeping-- holding those industries back.

JESSICA KEARNEY: Great, great. And then let's just hop over to fiscal policy. I know there's likely to be some movement on tax policy next year. We've just obviously been through a major election cycle here in the United States. When it comes to fiscal policy in the labor market and impacts, again, on business investment and things like that and how that might trickle down to the labor market, what will you be thinking about or watching there?

KORY KANTENGA: I think it's always important to keep in mind a couple of things about fiscal policy. One, it's asymmetric. Fiscal policy, its effects, its behavior, it isn't necessarily the same on the way up as on the way down. And of course, right now we're kind of in an ambiguous place where we're still growing. GDP grew by 2.8% in the third quarter and is expected to grow by 3% in the fourth quarter.

So on the growth side, we're not actually slowing down yet. So fiscal policy behavior will be different going up versus going down. So for example, going down, if things are slowing down, then of course, you'll start to see tax cuts and government spending in order to support that. But if you’re not-- if we're not on a downward trajectory in terms of growth, you wouldn't necessarily see-- expect to see much in terms of tax cuts and government spending, because that could reignite inflation. And then the Fed will keep interest rates higher. So you'll have this feedback between fiscal and monetary policy.

So it's just important to keep that in mind. And fiscal policy is not instantaneous either. Of course, when you send checks to folks, that's an instantaneous. Again, that's when you're on the way down. But when you're on the way up, in terms of if you're on the way up and stimulating, if you're not stimulating, but you're trying to contract the economy to maintain inflation, the effects of fiscal policy aren't necessarily going to matter now.

And then sometimes, they'll make decisions like, for example, Inflation Reduction Act. A lot of that money hasn't been spent yet. It hasn't actually gone into the economy. So there's still some things in the pipeline. It's not necessarily instantaneous as if you had fiscal stimulus checks.

Then of course, there's always unforeseen consequences with fiscal policy, in part because there are these things that we like to call general equilibrium effects. So you change one thing in order to induce some behavior, but then you weren't intending to change something else, but you did. So you were potentially intending to make your import sector more competitive, potentially by doing policies like tariffs. But then you made your export sector less competitive as a result.

So there are always going to be trade-offs. And so if you took an econ class way back in the day in college, you probably remember this phrase of there's no such thing as a free lunch. And people will repeat that a lot. It's not meant to be some flippant comment at a dinner party. It's to make the point that there's always going to be trade-offs.

And so there's going to be trade-offs in fiscal policy. They aren't necessarily going to be clear how they're going to affect the labor market. The labor market, really what matters, labor supply and labor demand. So whatever choices the government makes in terms of spending, it's probably going to affect both. And so as a result, it's not always going to be clear what the impact is. So often you're looking to give with one hand, but you end up taking from the other.

And the last point I'll make about fiscal policy to keep in mind is very much in the long run. A lot of countries incurred a lot of debt during COVID, and that bill will come due, and we're still in a high interest rate environment. So it's not necessarily an issue for the U.S., which has a very strong economy, but there are a lot of economies around the world where their debt situation is more fragile. So we might be having more conversations about sovereign debt. And often the policies that follow sovereign debt crises do tend to have an effect on the labor market.

JESSICA KEARNEY: Thank you for that, because obviously that's on a lot of people's minds as we're watching things play out in 2025. So that's very helpful. I want to ask you one more question, and then we have just a ton of audience questions coming in that I want to make sure we save time for. You talked a little bit about technology and how firms are spending time obviously trying to wrap their arms around that.

Can you elaborate a little bit on what we're seeing with emerging technologies and what-- I mean, that's something you hear about in many conversations today, even at-- in social gatherings, is what is the future of all this emerging technology? But when you're looking at it from a labor market perspective, what are you seeing and hearing? What are your thoughts?

KORY KANTENGA: Certainly. So from the labor market perspective, there are two aspects of technology. There's the people who are building the technology. So for a lot of those, those are going to be AI jobs, engineering-type jobs. And then there are also the people who are using the technology or using the technology to do their job. And so those are going to be the folks of us who are using things like Copilot, ChatGPT to perhaps enhance our productivity. So there's going to be those two aspects of a lot of this new technology on AI that may be a little bit different than some things that we've seen in the past.

And so from the engineering point of view, there's high demand. It's very clear we've seen significant increases in the amount of talent on LinkedIn for AI talent, making clear that they're AI talent. And we've seen a lot of hiring happening in AI. It's outpacing overall hiring. So for AI engineers, they're doing pretty well right now. And in some places, they're actually in short supply, and companies are trying to figure out how to strategize to be able to even afford that talent to bring these tools in house if that's what they want to do.

And then from the other side of how it's going to affect the rest of us, well, we don't really know yet. We can make some guesses and get some sense of what jobs are more or less exposed to adoption. But it’s still-- there's still a lot to be determined there. So if someone's going out making big pronouncements about this job won't exist or that job won't exist, I would take all of those with a grain of salt. For most of us, it's going to be the case that maybe our jobs are just modified.

And we do see that when we ask employers. When employers are surveyed, they'll say, well, actually, I'll hire someone with AI skills. I'd be willing to hire someone with less experience with AI skills. And what that effectively means is that they want someone to figure out how they can use this tool and be much more productive on the job. So I think that's the direction of where things are going right now for the rest of us is how we can use these tools to be more productive.

But at the company level, I think a lot of companies are still figuring it out. They haven't come up with a mass plan to implement it organizational wide. There's no indication that we're going to see mass job losses anytime soon. So at the moment, I think they're just trying to build and figure out what their strategy is going to be, where they can use it, where it's going to be really productive.

So you see it a lot in coding, IT. So that's a place where the new tools, generative AI tools are being used. Marketing, generating content. We're seeing a lot of firms, we're seeing more firms, rather, be interested in doing that, and that shows up in the survey data when you look at the U.S. Census Bureau.

So again, it's still early days. There's building happening and I think experimentation. And I think a lot of companies are still figuring out what are my use cases and how am I going to go forward with those.

JESSICA KEARNEY: Yeah, it's something that companies are all asking themselves. And I think you hear a lot of what you just said in terms of the Copilot and managing your specific-- having a helper, if you will, in the system and working alongside of it. All right. Thank you for that.

So I want to pivot into a few questions. So a few questions coming in from the audience. I have a question from Caitlin who's asking about ghost jobs, and if you could comment on ghost jobs on LinkedIn and what they are and how big of a problem that is.

KORY KANTENGA: Well, that's a generational shift. You didn't hear about ghosting 30 years ago as a concept. And now you hear about-- and during the great reshuffle, we heard a lot about employees ghosting employers, not showing up to interviews. And now we're hearing about the opposite as the labor market has shifted.

So I can't say that I'm really surprised that you would-- as the leverage has shifted back to employers that you would then hear a lot of conversation about employers not necessarily replying when you apply for a job. Because again, that labor market, that shift has happened pretty fast over the last couple of years. And it's been pretty sharp. We were at such a high point, and now we're kind of back to normal.

So the fact that we're talking about ghosting in interviews, not surprising because we already were. And generally, I think--

JESSICA KEARNEY: Is that something you see? So where companies will post a position and then they don't actually intend to fill it?

KORY KANTENGA: Well, that's something we've seen since the labor market has existed. Companies will post jobs, and they'll decide later on that they're going to close the position or they're not actually going to fill the position. I think this is just part of-- it's just kind of a general aspect of the labor market and how recruitment occurs is that there are openings that aren't necessarily filled. And there are things that may happen at the company level that explain that.

The question is, is there an epidemic of it happening? Well, I mean, I would say that's kind of still up for debate. I think on LinkedIn, what we focus on is trying to be the most trusted platform, which we have been rated, so that when people come to LinkedIn to look for jobs, they have a better chance of finding economic opportunity. So that's where we sit and where we're focused on.

But of course, if you go tons of jobs boards, there are lots of jobs where you may not necessarily get a reply. And does it mean something nefarious is happening? Probably not. There are probably a lot of things that most of us don't necessarily understand about the recruitment process that would explain why we see that happening. But of course, it is frustrating for job seekers.

JESSICA KEARNEY: Yep, yep. OK, great. Thank you for answering that. So we have one interesting question about accessing short-term talent. So Christy is asking what options do companies have to access professional talent, perhaps semi or retired, on a short-term, temporary or project basis? Do you see any data around that on what you're seeing on LinkedIn?

KORY KANTENGA: Well, there's a whole industry dedicated to that, actually. The question is just can you afford their services? That's the real question. But there's definitely, there's this whole industry dedicated towards doing that. And you often see-- and you do see folks on LinkedIn who are retired, but they're still active, because they're willing to consult, and they're willing to be hired for certain roles.

So there are companies that are specializing in that. I think it's probably just knowing what those companies are who are doing that to help you do that, because it's very difficult to do on your own.

JESSICA KEARNEY: Have you seen any trends in terms of how companies might be utilizing short-term engagements?

KORY KANTENGA: Yeah. So we've seen-- so if you are looking for people who want to do short term engagements, there's definitely excess supply at this moment. Because one of the big pullbacks in the labor market was in contingent work. Because for employers, when they're thinking about what levers to pull, they're not going to pull the layoff lever first. The first lever they're going to pull is going to be how many contingent workers do I need and how much hiring do I need to do? Those are always going to be the first couple of pulls-- levers that they're going to pull.

So there's plenty of folks out there right now who are looking for contingent work, because that has slowed down significantly. Of course, health care is a different space. Everything is always robust in health care, just given the circumstances. But across the board, there's definitely lots of room if you're looking for folks to do short-term work.

The question is, does it actually work for them? So if you are semi-retired, are you going to sign up to go into an office three days a week? Probably not. So there are particular levers that companies themselves can pull in order to make that work more appealing that won't necessarily be on the compensation front.

JESSICA KEARNEY: Great. Thanks for that. A question coming in from Robin. As a university co-op and career center leader, how can we position our students for successful recruiting outcomes in today's labor market?

KORY KANTENGA: Well, you have to certainly know where the jobs are and what the skills and demand are going to be, not just today, but kind of a year from now, three years, five years from now. And so just keeping a tab on trends in the labor market is probably one of the easiest things that you can do just to prepare. So there's clearly areas of opportunity.

So for example, while things were slowing down on LinkedIn, we saw that sustainability and green-type jobs, they were outperforming, particularly solar. So while everything else was slowing down, renewable, sustainability, solar hiring was picking up there and doing quite well.

So just keeping track on those trends to know that those opportunities are out there is key, in part because you may have an idea about what your dream job is, but that dream job isn't necessarily there at the moment. So if you want to go into consulting, it's a tough time. Professional services pulled back significantly. But if you could go into green consulting to start and then eventually work your way and move towards where you want to be, the particular industry or field you want to be in consulting, that might be a pathway that you didn't think about before but is available to you now.

JESSICA KEARNEY: Great. Thank you. Getting a number of questions in about wages, wage moderation, picking up on some of your comments earlier. Could you comment a little bit more on wages next year and what some of the factors might be as people are looking at setting compensation for as they're hiring?

KORY KANTENGA: Yes. So I expect the pace of wage increases to stabilize at some point probably in the next 12 months. The reason for that is that we've seen-- wage compensation depends on labor supply and labor demand. If labor demand is very strong, you need to raise your wages to bring folks in the door. If there are a lot of workers available, if labor supply is pretty prolific, then you don't need to work as hard to recruit people. You don't need to increase wages as much.

And what we've seen is that labor supply is kind of maxed out potentially right now. So we have the labor force participation rate for people in the majority of their working years, 25 to 54, that's kind of peaked at this point. So it doesn't seem like we have a lot of room to bring more workers back into the workforce. And at the same time, demand has been running relatively slow, as we see with the pace of hiring slowing down. So at some point, those wage gains are going to moderate and hopefully go back to that 3% to 3.5% range that we were-- long-term range that we were seeing prior to the pandemic.

So I don't expect wages to pick up unless we see something happening significantly, like a significant pickup in demand, because maybe there's a huge fiscal stimulus or a huge drop-off in supply because we don't have people entering the workforce coming from abroad. So a huge drop-off in supply, that's going to create wage inflation in some areas, or at the very least, wage pressure.

JESSICA KEARNEY: Great. A few questions about the trades and what we're seeing in terms of blue-collar roles versus white-collar roles. Could you comment on that?

KORY KANTENGA: Sure. So I never loved that term. I think it's a little too simplistic. So, for example, if you work in health care, you sit in the office and you type on the computer, but then you also see patients face to face. So it's a white-collar and a blue-collar role in that sense. So I don't know if those distinctions necessarily mean too much in the labor market today. I go back and I code and write computer programs, but then I also talk to media and talk to clients. So in that sense, you're doing client-facing work versus doing sort of back-end production building work.

But generally, what we have seen, again, is that it's the interest rate-sensitive sectors that have taken the brunt of the hit. Those are what have been traditionally called white-collar. So professional services, legal consulting, accounting. Again, technology, media. Also typically called white-collar roles. We've also seen manufacturing take a hit. And there are a lot of roles in blue-collar-- blue-collar roles in manufacturing.

So the distinction to say, OK, there's a white-collar recession, and it's not particularly helpful, especially considering that for people who have college degrees, their unemployment rate is still pretty low, lower than people without them. Although people without college degrees have done very well in the last few years.

JESSICA KEARNEY: Great. Thank you for that. And then we have Valerie asking tips for keeping qualified staff. We also have some folks asking about keeping folks on their last two years before they enter retirement. Any suggestions there?

KORY KANTENGA: Flexibility. Make working easy for them. If working is easy for them and it's pleasurable for them, they will stay. If it's difficult to work, and they don't necessarily need to work to maintain their quality of life, then they will leave. So really, it's about offering that flexibility. And not just flexibility in terms of where they work, but maybe it's flexibility in terms of when they work or how they work. Maybe they work on a project for three months and then they take a month off.

Experimenting with different ways of working is what we're going to have to do in order to keep older people in the workforce. I don't think that we'll necessarily be able to tell folks, unless things are bad of course. Recessions always have a way of resetting people's expectations. But if things are normal or even better than good, we're not just doing the long-run trend. We're doing a bit better than that.

Then you're going to have to work to keep people, and that's going to require you to experiment and understand what they value. And we know what they value. They value money, and they value time, because those are the two things that you need in order to have a good life. And so to the extent of where you can figure out which lever you can pull for people that they really value, that's what's going to matter.

JESSICA KEARNEY: All right. This has been a fantastic discussion. And I think we've hit so many great key points. And I think you're right. It all comes back to, I think, creating a positive work environment and really valuing your teams. And it's great to put it in this broader economic context. I really appreciate all the insights.

I'm going to ask you two more things as we hit the top of the hour here. First, if you could leave hiring managers with one thought as we go into 2025, what might that be? What's that kind of one important piece that you'd really ask them to cue in on? And then second, I know we're all going to go and we're going to subscribe to your LinkedIn labor force newsletter. Any other resources or podcasts or anything that if someone wants to keep their finger on the pulse of this conversation that you follow that you might recommend?

KORY KANTENGA: Certainly. So I follow a lot of things. I like to get a variety of perspectives. So I said, you can follow the LinkedIn. So I'll start there. Follow the LinkedIn Economic Graph page. You can follow me. Those are good resources to figuring out the research coming out of LinkedIn.

There is a blog. I don't know if blog is necessarily the right word, but they're a nonprofit and their goal is just to produce objective, to the extent that anyone can be objective, economic content to help people understand the research that is going on in economics. And it's called Econofact. And I think it's econofact.org. And I've always loved that.

They send me an email probably-- I've had to move it into an inbox, because I got too many, and I couldn't read them all. I would love to be able to read every single one. But they really just tell you what we're-- it's kind of without having to read an academic paper or without having to follow along with working papers and things like that, that I would do in my day-to-day life, but you would not.

It's really just a great way to get a pulse on economic research and on a factual basis of what's happening. Because you'll hear people will say so-and-so said this or so-and-so said that. Really what people often need is just the facts, and they can make up their own mind about what to do about them. So that's why I like that one.

And then going back to your prior question. What would I leave folks with or talent folks for next year? I would just say there are a lot of things happening right now, so it can probably feel a bit overwhelming. On LinkedIn when we ask workers how they're feeling about the pace of change at work, they say they're overwhelmed. A lot of them do. The vast majority say they're overwhelmed. Some of them are afraid of being left behind.

And I would say as talent leaders that there's a risk there, of course. If things start to pick up, more people can quit and then you find yourself back in that great reshuffle mindset of needing to keep talent. But it's also a really great opportunity, in the sense that talent is becoming, possibly in a lot of companies, talent is becoming more important as an aspect. Because we were taught during the great reshuffle what happens when you do not have a very strong talent strategy. And even when you do, sometimes you still will struggle to find talent.

So I think those lessons have taught us that talent is really important. It is one of the most important things in order to produce goods and services, in order to make profits. And so reminding folks of how important talent is, is probably something that talent leaders can do as they start to strategize and navigate, because these are not easy things to navigate right now as technological change, population aging, flexible workplace arrangements, multigenerational workforces. There's a lot of challenges, and they're all kind of hitting all at once.

So starting out with prioritizing talent and making sure that it is understood that talent, it's not just capital and spending on investment and capital, but labor is a very important piece in the production function and making that understood. I think that's something talent leaders can do. And also just keeping track of what's going on in the trends.

I don't think that talent leaders going forward will necessarily be able to live in the world where they know how they hire, and they don't really care about anything else. They're like, we go to this school, this is the one school we hire from. We do this every year. It works for us. And then that's fine.

The labor market has been shifting over the last few years, and so you have to adapt. And I think you're not necessarily going to solve all these problems next year. But at least putting things in place to where you learn how to adapt and be able to go back to leadership and say you know what? This way we've recruited people, we can't keep doing this, because we're recruiting folks who are increasingly retiring, for example.

And so we need to find new pathways to find new folks, and we need to partner to find new pathways, find new folks, or maybe we have a degree requirement that we've always had for a role that probably doesn't actually need a degree. So we need to drop that to increase our talent pool. So figuring out how to be more agile and keeping track of these broader trends that are affecting you and hitting, I think that's something talent leaders are going to have to do next year.

JESSICA KEARNEY: Well, I think you've gone a long way today in helping us start on our journey of doing just that. Kory, I know you are extremely busy, and I can't tell you how much we appreciate your time and the hour that you've spent with us today sharing your insights. We so appreciate it and I think that was the perfect note to leave it on.

KORY KANTENGA: Thanks for having me.

JESSICA KEARNEY: Thank you very much.

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We will have one more program in 2024 coming up on December 11, and it's going to be a great one. Reducing Wildfire Risks One Tree at a Time. We're going to have Jad Daley, the President and CEO of American Forests, joined by our very own Michael Klein, President of Personal Insurance here at Travelers. And they're going to be getting together on a program for an in-depth look at wildfire risk with a special focus on forests. So you won't want to miss that. 

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