What employers need to know from Indeed and Glassdoor economists

In a first-time partnership, a report from Indeed and Glassdoor offers guidance on how employers can navigate a demographic cliff – and explores a surprising decline in corporate focus on DEI initiatives.

Nearly 300 years ago, a man named Thomas Newcomen invented the steam engine, which, after many cycles of improvement, spurred the first Industrial Revolution. People were pulled from farms and fields into cities and factories, changing the shape of labour forever. 

Innovations like the internal combustion engine, the microchip and the Internet continued to change the world of work into the 21st century. Then, the upheaval of the pandemic sent into motion a flood of surprising new trends: remote work, the Great Resignation and Zoom fatigue. 

But a new report about the future of work from Indeed and sister company Glassdoor, the inaugural Hiring & Workplace Trends Report, reveals that some of the major shifts of the past few years – a tighter labour market and an insistence on a diverse, balanced workplace – have been a long time coming. These phenomena are an acceleration of trends driven by technology and demographics that have been quietly building up steam for decades.

'The future of work has been a near constant theme of discussion for 50 years, if not more,' says Aaron Terrazas, chief economist at Glassdoor and a co-author of the study. 'It's important to ground these conversations in data and keep a bit of humility about the future because the past couple of years have taught us that the future is a wildly crazy place.'

The report, which looks at trends in the US, the UK, Canada, France, Germany and Japan, is based on insights from the Indeed Hiring Lab, an international team of economists and researchers; and the Glassdoor Economic Research team, whose deep understanding draws from a rich database of millions of employee reviews, salaries and conversations. 

'Information is no longer asymmetrical,' says Svenja Gudell, chief economist at Indeed and co-author of the report. 'Employees have quite a bit of power because they can make their voices heard on platforms like Indeed and Glassdoor. That wasn’t the case 15 years ago.'

The data-rich report finds that, despite an uncertain economy, changing age demographics will continue to support a jobseeker's market in the long term, giving employees the leverage to advocate for more flexibility, higher pay and more benefits. Employers will need to adapt or get left behind.

'Some employers are planning ahead and some aren’t,' says Gudell. 'Not all employers have the luxury of thinking 10 years down the road, but as the trends get more acute, they’ll be forced to react to them.'

Here’s what the report’s findings mean for employers – the implications and the takeaways. 

The impending 'baby boom bust' will mean a tighter labour market

The short-term labour shortage from the pandemic has masked a decades-long undercurrent that employers need to take seriously.

Baby boomers make up around a quarter of the American workforce, and they are retiring, a trend accelerated by the pandemic. More than half of US adults older than 55 have already retired, and the youngest boomers will turn 60 in 2024. Over the next 10 years, the numbers of people of working age, between 15 and 65, will fall in many industrialised countries, according to World Bank projections. Germany, in particular, will see a shrinking workforce. And in the United States and United Kingdom, population growth will be driven solely by immigration. Within the UK, deaths will exceed births by 1.4 million. 

Since subsequent generations are much smaller than boomers, employers will face a widening gap as they struggle to fill positions. But many of them don’t see it coming. 

'It's going to be too easy for a lot of corporate leaders to conflate cyclical trends with long-term structural trends. It’s important to look past what's immediately in front of us and look at the larger forces shaping the labour market,' says Terrazas. 'Boomers are retiring; it is happening now. We've seen this slow-moving labour market train wreck coming for a long time, but it finally hit this year and last year.'

Gudell warns that not everyone is ready for this eventuality – especially smaller businesses.

'There are some larger employers who are already seeing a crunch,' she says. 'But smaller employers probably don’t have that same holistic overview. It’s harder to see big demographic trends and how that might affect you if you don’t have a large recruiting operation.'

Workers will leverage these dynamics for better pay, increased benefits and, ultimately, more freedom 

The realities of this labour shortage are the primary drivers of an exciting change for employees: workers will continue to have leverage. 

That starts with compensation. Spurred by potential wage gains and inflation, higher pay was the most cited reason that employed, prime-age workers searched for a new job. Searches for job posts mentioning $20 per hour have surpassed searches for $15 per hour and continue to grow by 35% year over year as of August – which is why $20 is the new $15. Concurrently, job postings promoting health insurance, retirement benefits and paid time off have increased across the labour market as employers jockey for new employees. 

Remote work, the monumental work-life shift of the past three years, is also becoming more commonplace for industries that can support it. The low supply of workers means remote work will remain an enduring facet of 21st-century workplaces, with fields such as engineering, marketing, banking and finance offering remote work at elevated levels compared to 2019. 

As of September 2022, 8.6% of US job postings on Indeed mention remote work compared to 2.9% just three years ago. The share of marketing job postings mentioning remote work in Canada, however, is 30%, up from 5.9% before the pandemic. In Germany, that number has jumped from 10.2% to almost 40%. And software development rules remote work across countries: in the US, Canada, France, Germany and the UK, those job postings were the most likely to advertise remote work.

Workers also expect to be fulfilled by their roles and happier at work. In fact, 46% of people say their expectations around happiness at work have increased in just the last year, which means employers will need to put more effort into creating positive company cultures. 

'This is the most dramatic workplace shift our society has experienced since the shift from a manufacturing-based economy to a knowledge-based economy in the ‘70s and ‘80s,' Terrazas says. 'The leadership of tomorrow is less top-down leadership and more listening to your employees.'

The workforce of tomorrow: more diverse in age, race, gender and life experiences

In the face of economic headwinds and hiring challenges, Diversity, Equity and Inclusion (DEI) efforts at organisations seem to be falling off the radar as leaders struggle to balance competing priorities: in the US and UK, the share of benefit reviews on Glassdoor citing DEI programmes dropped in the first three quarters of 2022. 

Terrazas found this to be the most surprising discovery of the study. 'Corporate focus on DEI seems to have stalled in 2022, after enormous progress between 2019 and 2021,' Terrazas says. Canada was the exception here – mentions of DEI benefits continued to climb, though only slightly.

But companies neglect DEI at their own peril, as DEI is still top of mind for workers, especially millennial and Gen Z workers, according to the Indeed and Glassdoor study. Seventy-two percent of workers aged 18–34 would consider rejecting a job offer or leaving a company if they felt their manager didn’t support DEI initiatives, compared to 45% of workers over 65. 

Terrazas says a looming recession isn’t an excuse for employers to jettison their plans for more equitable workplaces. 'It is in these moments that we tend to lose sight of the longer-term investments that can really make or break a company. Not in the next quarter, but two years down the line.'

To attract talent, companies will need to do more when it comes to inclusion. Many workers haven’t forgotten the promises companies and brands made in the summer of 2020, in the aftermath of the death of George Floyd. They’re watching to see which ones stay true to their word and actually strive to create workplaces that reflect what America looks like. 

Because, as the workforce gets smaller, companies will need to think bigger, taking a closer look at communities that have been shunted to the margins of the labour market. That means making accommodations for disabled workers, justice-impacted workers and workers who are also caregivers – other groups that have been historically overlooked. 

Gudell, who doesn’t miss her hour-long commute, says increased flexibility could bring more women and caretakers into the workforce.

'I get to walk my daughter to school now, and that’s huge for me,' Gudell says. 'I think women in general are trying to balance caregiver responsibilities with a full-time job, and giving them flexibility to work remotely will open up additional talent pools.'

From the Great Resignation to the Great Redistribution

The workplace is in the throes of a revolution that could change the way we look at labour. And unlike some previous economic rebounds, this time around more people have a chance to come out ahead. Terms like the Great Resignation don’t capture the breadth of what companies will be facing – call it the Great Redistribution instead.

When it comes to total global transformation, 'I don't think this moment is on par with the steam engine,' says Terrazas. 'But I do think this is a shift toward a more democratised workplace. The future is a symphony, not a solo.'

'The Great Resignation was a great realisation that workers are owed more,' says Gudell. 'Leaders should see their people at their greatest asset – and take care of them.'