In this episode of Transform Your Workplace, Brandon Laws sits down with Mallory Vachon, senior economist at LaborIQ, to discuss current labor market trends and what HR professionals should anticipate in the near future. Vachon explores the “normalization” of hiring post-pandemic, generational shifts in workforce expectations, and why hybrid work may be here to stay. Whether you’re navigating today’s talent landscape or planning for 2025, this episode is packed with valuable takeaways for HR leaders and business decision-makers.
GUEST AT A GLANCE
Mallory Vachon, a senior economist for LaborIQ, leads research on labor market trends and provides forecasts that guide hiring and business decisions. With a Ph.D. in Economics from Syracuse University, her insights on talent and compensation strategies have been featured in major outlets like Bloomberg and Business Insider.
A QUICK GLIMPSE INTO OUR PODCAST
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🎙️ Host: Brandon Laws
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LOOKING TO THE FUTURE
In our most recent interview, economist Mallory Vachon delved into the recent state of HR and today’s talent acquisition landscape. After one of the largest job loss events in recent history, the COVID-19 pandemic, “HR teams were strapped with hiring.” After all, these departments were tasked with rehiring “20 million folks who had lost their jobs.”
However, Vachon says that we can look to 2025 as a period of “normalization” for the labor market. While job additions continue, they’ve slowed compared to the initial post-pandemic hiring frenzy. This normalization comes after HR teams faced challenges like adapting to remote and hybrid work, addressing the “Great Resignation,” and managing the rise of labor movements. As the labor market begins to stabilize, we can only hope that common threads of quiet quitting and burnout surface less frequently in the world of HR.
PODCAST EPISODE HIGHLIGHTS
Shifting Perspectives
“I do think that there have been some generational shifts that we’re seeing in the workforce, right? We’ve got Gen Z workers who are coming into the workforce after graduating from college or being in high school during a pandemic […] and I think really seem to want different things from their jobs and careers. Then, Millennials, Baby Boomers — they’re much more mission-driven. We’ve seen a lot of focus on values and quality of life over money and promotions. […] How do you move your business forward with a generation of workers who want something different from the labor market than previous generations or than their bosses might have? And while you could agree or disagree on that take and on their feelings, it doesn’t make them any less valid or true.”
Meeting the Demands
“We’re not likely to return to that 2 or 3% annual wage growth going forward. Number 1, the talent shortage that we’ve talked about — that will put a little bit of pressure on wages. And then there are a lot of other inflationary pressures going on in the labor market that are likely to keep some of the pressure to keep wages higher. And given some of the tightness in the labor market, we’re seeing turnover not quite come down as much as we’d expect and businesses using compensation as a retention tool […]. I think those are a few of the challenges when it comes to compensation. The other piece is that not everything is compensation-driven. Especially with the younger generations, there isn’t as much of a focus. There’s the focus on the workplace culture and values and other things. But, at the end of the day, businesses who are focused on attracting and retaining talent are going to need to make sure they’re offering a competitive compensation package or other sets of benefits that will attract and retain their workforce.”
Staying Flexible
“If you were to look for a new job or had to move for some reason, […] you’re looking at a completely different mortgage and home-buying landscape, and it becomes a much different calculus. There’s a big push and a lot of headlines about coming back to the office, but some of the housing market dynamics that we’re seeing right now combined with what we’ve seen in the labor market may necessitate… or it might just not be possible to find the talent unless they are in some sort of hybrid or remote flexibility arrangement.”
Finding Top Talent
“Folks that are in growing labor markets, you have an opportunity to tap into your local talent, but you also face the risk that folks are getting poached for remote work. I think there was a study out in the last couple of months or so — when you survey a lot of large businesses in the US, they don’t really expect to see a big shift and downward shift […] in remote or hybrid work over the next five or so years. There are headlines — big tech companies, Amazon, [saying], ‘5 days in the office’ that get a lot of attention. But in reality, it seems like we’re probably in a little bit of a steady state when it comes to hybrid and remote work.”
The Gig Economy
“[The gig economy is] just a reaction to trends that we’ve seen in the labor market over the last several years, even decades of challenge. We talked about the 2008-2009 financial crisis that may have had a lot of people saying, ‘I want to be in control of my own business, my own job. I don’t want to work in a corporate structure during the pandemic. Life is short. I want to be able to travel and work and do all of these things and have my family at the same time and have that flexibility.’ And I think clearly the gig economy helps provide people with that opportunity.”
Final Thoughts
“I would say don’t panic. We are in a period of normalization. There are certainly some industries that have been hit harder than others. The good news is that we haven’t seen widespread major job losses, but a lot of industries are really treading water. Someone might leave for a new role, or you have a few layoffs, but maybe you backfill some of those positions in a different department, or you backfill a little bit more slowly. But we’re headed toward a period of normalization, so just don’t panic about that. There tend to be a lot of headlines that are hyperbolic, so just learn to read the data.”
LEARN MORE
Follow Mallory Vachon on LinkedIn or dig into some timely labor market insights at LaborIQ.