The job market has cooled, with hiring stabilizing and wage growth slowing. Meanwhile, skills-first hiring has emerged as a powerful trend that is changing how employers evaluate talent. And the world of compensation is undergoing significant change, as more and more companies are following the lead of Illinois, Massachusetts, Minnesota, New Jersey, and Vermont and adopting pay transparency legislation.
The labor market cooling is largely due to economic and policy factors. As interest rates remain high enough to limit capital investment and global immigration policies restrict worker availability, job creation has slowed significantly. This has led to increased competition for talent, especially in sectors that traditionally rely on skilled foreign workers like construction, agriculture, and technology.
Despite this, job creation remains well above the pace required to keep up with population growth. In fact, the unemployment rate has barely budged since 2023, reflecting a steady increase in labor force participation.
Another key factor is a shift away from the traditional focus on degrees and years of experience. According to Indeed data, the share of job postings requiring specific years of experience has fallen from 40% in October 2022 to 32.6% in October 2024, as fewer positions require four-year college degrees.
Other signs of a cooling labor market include slower wage growth, which is leveling off after a steep post-pandemic spike. Likewise, the number of jobs that offer remote or flexible work is also stabilizing. Meanwhile, the number of clicks on US job postings from abroad is starting to decline after hitting a peak in 2023.
About the Author
