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The labor market has been steadily cooling throughout the year, but employers are more optimistic about hiring this quarter, according to ManpowerGroup’s latest employment outlook survey.
Hiring outlook among US employers increases. ManpowerGroup surveyed 6,300 US employers about their hiring intentions for Q4 2024, and found the net employment outlook (NEO)—calculated by subtracting the share of employers planning layoffs from those planning to hire—increased by four percentage points from the last quarter, to 34%. The NEO decreased year-over-year, by two percentage points.
Despite recent Bureau of Labor Statistics data that showed employers added fewer jobs than originally estimated this year, “I still see some stability under the surface,” Rajesh Namboothiry, SVP and head of Manpower US, said of the labor market. He noted that the unemployment rate, currently at 4.2%, has held steady and remains historically low, and said certain sectors “continue to be fairly resilient.”
Plans for seasonal hiring, coupled with an expectation that the Federal Reserve will cut interest rates by at least 25 basis points later this month, are likely fueling a sense of “readiness” and “preparedness” among employers, Namboothiry told HR Brew. The thinking, he said, seems to be, “let’s hire the right talent we need now in Q4 so that we’re ready when the market bounces back next year.”
“Innovation and transformation” drive hiring plans. Once again, IT was the sector with the strongest NEO, at 51%.
As employers plan their budgets for next year, many are prioritizing an “innovation and transformation roadmap,” driven by advancements in technology like artificial intelligence (AI), said Namboothiry. “They’re also looking at areas where they feel they need to drive up efficiency and productivity,” which may also be driving demand for IT talent, he added.
Some 66% of IT employers reported having difficulty finding the skilled talent they need, a trend that holds across industries. In sub-sectors of IT where talent is particularly scarce, such as AI, the race for top talent has prompted some employers to offer sky-high salaries.
Despite 62% of employers telling ManpowerGroup they believe they have the upper hand when negotiating pay, wages are also a top consideration for workers when deciding to take a job offer, Namboothiry said, and can make a difference in businesses’ ability to hire the talent they want: “Pay remains one of the most significant movers in that decision-making process.”