Last year, the U.S. witnessed the labor market being stronger than expected for jobs, labor supply, and wage growth. However, as we start the new year 2024, some economic developments and uncertainties still linger, affecting workplaces, wages, and job seekers. Here are some of the key employment trends that may take place in 2024:
1. 2024 Job Market Prediction
- Past: Jolts report shows the change in labor growth rate from 2021 to 2023.
- Present:
By 2023, the JOLTS report shows that employment listings dipped to 8.79 million, marking the lowest since 2021. Hiring fell by 363,000, dropping the rate to 3.5%, a 0.2% point decline, while layoffs dropped by 116,000, with a steady rate of 1%. By the end of 2023, the unemployment rate remained at 3.7%, with 6.3 million unemployed persons, slightly higher than the 3.5% jobless rate and 5.7 million unemployed persons last 2022.
In addition, the ISM December report registered a Manufacturing PMI reading of 47.4%, slightly better than expectations but still in contraction. Federal Reserve officials also monitor the JOLTS report for signs of labor slack. The once tight labor market that contributed to surging inflation, peaked in mid-2022 and is gradually receding.
- Future:
The current job growth remains robust despite showing signs of a slowdown. It is projected to slow from its rapid trend in 2023 but will remain positive. If there is any economic decline in the U.S., it is not evident in layoff figures. The previous year’s surge in technology sector layoffs has ended, and layoff rates in other sectors seem to be at normal levels.
For 2014-2024, BLS projected the labor force to have a mild growth, reaching 163.8 million. This translates to a numerical increase of 7.8 million, compared to 8.5 million over the prior decade.
Where do we see the growth?
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- Renewable Energy Industry: In 2024, the renewable energy industry is expected to experience the impact of historic climate legislation. There is a push for clean-energy-driven manufacturing, which could create more job opportunities and develop more resilient renewable supply chains. Clean energy jobs have grown 10% over the past two years, outpacing overall U.S. employment, and California ranked third in new energy jobs, adding nearly 30,000 positions. However, the surge in domestic manufacturing and renewable energy projects would require a larger and smarter power grid, a skilled workforce, and streamlined project development processes. Globally, the transition to clean energy is projected to generate 10.3 million net new jobs by 2030.
- Automotive Industry: The job outlook for Automotive Engineers has been consistently positive since 2004, experiencing an average annual growth of 2.22%. The demand for Automotive Engineers is projected to increase, with an expected 34,750 new jobs by 2029. However, despite the strategic importance of electric vehicles for major car companies, profitability challenges in this sector may potentially lead to delays in hiring across the automotive industry in 2024.
- Aerospace Industry: The employment outlook for aerospace engineers remains positive, with a faster-than-average projected growth of 6% from 2022 to 2032, surpassing the average for all occupations. The aerospace and defense industry anticipates steady growth this 2024, driven by heightened geopolitical tensions and technological advancements. However, some companies report a shortage of skilled workers, particularly engineers, which could potentially delay growth.
2. RTO Battle+
In 2024, employers are continuing the push for a return to the office (RTO), but the challenges experienced in an RTO setup from 2023 will persist. Now, hybrid work is on the rise, with 80% of employers regretting earlier RTO plans and 69% of mid-large companies mandating specific office days for remote employees. More companies embrace hybrid setups to meet employee expectations for work-life balance and productivity, leveraging these benefits to attract top talent. Globally, 83% of the workforce sees hybrid work as ideal, and 93% express a preference for hybrid or remote opportunities.
3. Wage Increase
By December 2023, wage growth in the U.S. manufacturing industry hit an all-time high of $27.34 per hour, an increase from $26.93 per hour from the previous month. Meanwhile, statewide minimum wages are also rising, with a 4.2% year-over-year hourly earnings increase last September 2023, and a 4.1% projected increase in the average salary budget by 2024.
In California, engineers and technical employees who meet the “exempt” classification standards must now have a minimum annual salary of at least $66,560.
4. Upskilling with Generative AI
As breakthrough technologies, especially AI, gain faster adoption, their impact will be more felt this 2024. Generative AI tools are rapidly evolving, offering solutions to enhance efficiency in various tasks and professions.
- For Job Seeking: In 2024, more job seekers and recruiters will utilize Generative AI and other AI tools to automate certain tasks that will help improve their efficiency and work quality.
- For Workplace Setting: A study shows that for generative AI to excel in engineering design, it must learn to innovate. If mechanical engineers need AI assistance, they will need to refocus first how AI models operate beyond statistical similarity. AI models focused on similarity struggle with engineering problems, but with careful planning and using task-specific metrics, AI can become an effective design ‘co-pilot.
- For upskilling: While previous AI waves mainly affected physical jobs, generative AI will likely have the most significant impact on knowledge work. Individuals in the 20% of jobs where generative AI is being used and adopted are fortunate, as adopting AI into their workflow will improve their efficiency, productivity, and value. Even though 90% of leaders recognize the importance of AI for work, 60% said their companies still underutilize it. In 2024, we can expect this gap to narrow as employers and workers gain more confidence in AI.
Although the predictability of these trends is uncertain, knowing these factors can help both employers and job seekers be more equipped and adaptable to any upcoming changes in the job market.
SoloPoint Solutions can help Mechanical, Electrical, or Manufacturing Engineers look for opportunities while navigating through these new trends and uncertainties. If you need guidance to identify which industry, location, or workplace setting fits you, talk to a SoloPoint technical recruiter today: