Labor shortages from the Covid-19 pandemic may be a thing of the past, but that doesn't mean the job market looks the same as it did in 2019. Some trends have accelerated and new ones have been set in motion. Here's what to consider when planning for your staffing needs.

Remote work is flattening out

According to the latest data from the Census, 30% of Americans age 18 and older spend some time working from home. Among those aged 25 to 54 – the prime working years – the number rises to 38%. About half of these people work from home five days a week.

These numbers were much higher during the pandemic, but they are largely stable now. And although the data includes people who are self-employed and others who may have worked from home before the pandemic, it still represents a huge increase. In 2019, the share of Americans working from home was only about 6%.

With so many people expecting remote and hybrid work arrangements, companies will need to lean more flexible hours, part-time positions and job sharing to fill their payrolls and meet their targets. Also, training workers to perform multiple roles will become more valuable so that production can continue regardless of who is in the office or on the factory floor.

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Churn is finally slowing down

In 2020, average tenure of American workers — the time they had spent in their current jobs — fell to 4.1 years, the lowest number since 2008. Both of those years included recessions, where more people were losing their jobs. But the recent low continued into 2022, thanks to people switching jobs and raising their wages in a tight labor market.

All that is changing now. In January, the share of workers who leave their jobs fell to 2.1%, the lowest rate since 2018, after peaking at 3.0% most recently in April 2022. employment rate has also dipped to 2018 levels. The sum of these rates tends to peak around 6% in a normal business cycle, as it did in 2005 and 2019. Both employers and employees are taking more care now.

Actually, less i doubt – fewer hires, fewer layoffs – implies uncertainty. And despite the economy's strong fundamentals, an outsider might see some cause for concern: a divisive presidential election coming up later this year and a stock market that looks overvalued by historical standards. Even with a low unemployment rate, workers are no longer as eager to move.

From a corporate perspective, this is a great time for him invest in existing employees. With workers less likely to leave, returns to training are more likely to stay within the company. It's also a good time to start projects that require a team to work together for the long term. Increasingly, companies are even bringing flexible workers for long-term assignments and not for one-off shifts. On the platform Instawork, where I work, the share of shift bookings for long-term assignments has doubled over the past six months.

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Wage rates are stabilizing

Even though Unemployment rate is up just half a percentage point from its lows, job opening have fallen by about 25%. The labor market is gradually becoming freer, and salary increase have begun to fade. Those increases peaked at around 7% on an annualized basis in July 2022, but have now eased to around 5% – just a few percentage points above inflation.

Wages typically rise slightly faster than inflation due to increased worker productivity. In fact, we may see extraordinary productivity gains in the near future as artificial intelligence spreads throughout the economy; the same thing happened when the Internet, cell phones, and fiber optic cables arrived at every employee's desk. So the pressure on wages may return soon, albeit for different reasons.

with inflation roughly under control and wage increases moderating for now, future companies will be looking to lock in their labor costs for the next few years. Unionized companies can do this through contract negotiations, and other companies can do this by setting pay scales and scheduling cost-of-living adjustments.

Older people are leaving the workforce again

In November 2023, the share of people aged 55 to 64 who were working reached an all-time high over 66%. For several decades, increased life expectancy had pushed people to extend their careers to stay active and fund their retirements. The trend was the opposite during the pandemic, thanks to health concerns and a rising stock market, among other factors. But then higher costs stemming from inflation and interest rates pushed older people back into the workforce.

And now, the trend may turn again. In December, that rate fell by more than half a percentage point, the biggest drop outside of the pandemic since 2010. With the stock market hitting record highs again, inflation falling and interest rates poised to follow suit, there are fewer pressure on people to delay retirement (or to return from it).

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In addition, a significant portion of older adults who remain in the workforce are opting out flexible work instead of full-time jobs. The average age of professionals working shifts on the Instawork platform in February was 38.5 years old, with 8.4% of shifts performed by professionals aged 55 and over. This percentage is back to where it was five years ago, before the pandemic.

This is important insight for recruiters. The most experienced talent in the labor market has not been missing; it just needs to be accessed in a different way. By offering flexible hours and temporary positions, companies can still bring in older workers to guide and mentor their younger staff. The labor market is still quite tight, and tapping into every possible source of talent is paramount.