At the end of 2013, DCR TrendLine provided our prediction of workforce trends we expected to be of importance in 2014. Now as we approach the end of 2014, we take a look at some of these predictions to determine what happened over the course of the year.
In 2014, we witnessed a shifting of the workforce, with a new generation of workers arising as Baby Boomers start to retire and a movement away from conventional workspaces to remote and flexible work arrangements.
The Global Economy
Last year, developing countries contributed 50 percent of the world’s GPD. In 2018, this is expected to grow by 55 percent due to significant increases in business opportunities centering on these newer economies. The global middle class is expected to grow from 1.8 billion in 2009 to 3.2 billion in 2020, with Asia’s middle class tripling in size to 1.7 billion in five years.
The Impact of Healthcare on the Workforce
Last year we forecasted that the Affordable Care Act (ACA) would cause some employer to delay hiring. The impact of health care reform makes hiring full-time workers more expensive for employers.
A recent study by Casey Mulligan, a professor of economics at The University of Chicago, reveals that ACA pushes workers towards fewer work hours or part-time work. Mulligan’s analysis estimates that ACA will reduce weekly per-person employment and aggregate hours by slightly more than 3 percent or approximately 4 million full-time-equivalent workers.
A new economic study by the American Action Forum shows that ACA is reducing the pay of workers at small businesses by $22.6 billion every year. The study also states that the law’s regulations and increased premiums are likely responsible for American employers having shed more than 350,000 jobs. California, Florida, New York, Ohio, and Texas have each been attributed to losing more than 20,000 jobs due to health care reform.
Year-over-Year Change in Percent, September 2013 to September 2014
The Growth of Freelancing
We predicted last year that freelancers and non-employee workers would continue their growth trajectory in 2014. Throughout the year, we’ve written about the upward trend of temporary employment.
Currently, approximately one-third of the American population is working as freelancers. And the number of staffing jobs has reached a record high of 2.8 million. A new study by MBO Partners reveals that the number of independent workers in the United States will grow to just under 40 million in 2019.
According to the Freelancers Union, freelancers add about $715 billion to the U.S. economy annually.
We expected shifting population factors to have an impact on workforce demographics in 2014 and over the next few years. By 2020, half of U.S. workers will be milliennials. Employment data from September 2013 to September 2014 shows that the labor force participation rate has decreased by 0.4 percent, and much of this can be attributed to the retirement of the Baby Boomer generation.
According to the 2014 Deloitte Millennial Survey, Generation Y will comprise 75 percent of the global workforce by 2025.
Historically, older workers represent a small portion of the workforce, but new studies predict that in 2022, workers aged 55 and older will represent 25.6 percent of the workforce.
Workers 55 & Older, Percentage Share of Labor Force
New Recruiting Channels
In 2013, applicants continued to grow discouraged with online job application platforms and resume black holes, and we forecasted that employers would take note and start to focus on improving candidate experience in 2014.
This year, recruiters have been more active on social networks for the purposes of social sourcing. And recent surveys have proven that social sourcing is more effective in time to hire and cost per hire compared to traditional channels.
In 2014, building talent communities and talent networks have been an area of focus for HR organizations. Corporate talent communities provide companies a method to showcase their employment brand, and actively engage candidates and cultivate relationships even before job opportunities become available.
The Skills Gap
We predicted that the skills gap would be a continuing issue in 2014. Paying close attention to this trend throughout the year shows that the skills gap has been widening instead of closing.
A recent study by Udemy found that 61 percent of Americans believe that today’s workforce is impacted by a skills gap. In particular, approximately half of large U.S. companies report a shortage of science, technology, engineering, and mathematical (STEM) skills.
The DICE-DFH Vacancy Measure reveals that the time to fill open positions has reached a national average of approximately 25 days, the longest duration since 2001. The Wall Street Journal says its survey of small business owners found that one-third were unable to find workers with the skills that they need.
The Bureau of Labor Statistics released data showing that there were 4.7 million job openings in June of 2014, and more than half of employers said that they couldn’t find qualified candidates.