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Looking Ahead to the 2014 Job Market
 

By Joseph Coombs  12/6/2013
Even the most skeptical economic forecasters have to agree that the U.S. labor market has made strides, albeit small ones, in putting more people back to work in 2013.

Preliminary numbers from the U.S. Bureau of Labor Statistics (BLS) show that, on average, through October, 186,300 jobs were created each month of this year. That’s up from 172,700 during the January-October time frame in 2012 and an increase from an average of 169,900 during that same period in 2011.

Data from the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) report also reveal that 2013 has been a solid year for job creation. In 11 of 12 months of 2013 service-sector hiring was reported to have surpassed the rate of hiring from the previous year, while the manufacturing sector saw year-over-year hiring gains in eight of the past 12 months, according to the LINE report.

So what can we expect in 2014? Here are a few projections.

The National Association of Business Economics’ (NABE) October 2013 Industry Survey report said a net of 27 percent of surveyed U.S. organizations will add jobs in the next six months (37 percent said payrolls will expand; 10 percent said payrolls will shrink, either through attrition or significant layoffs).

The service sector is forecast to have the highest rate of job growth, with a net of 40 percent of respondents expecting to add jobs and have no layoffs. The goods-producing sector is expected to have the lowest job-creation rate, at a net of 5 percent (35 percent adding jobs, 30 percent eliminating them, through attrition or layoffs), according to NABE survey results.

The organization reported that the average U.S. unemployment rate for this year was 7.5 percent. It projects that the annual average rate for 2014 will drop to 7 percent, though this is an improvement from 2012’s 8.1 percent.

September 2013 projections by the U.S. Federal Reserve’s board of governors and bank presidents were slightly more optimistic, with both groups reporting that the average annual unemployment rate varied between 6.9 percent and 7.3 percent in 2013. As for 2014, members of those groups estimated that the average jobless rate would be between 6.2 percent and 6.9 percent.

However, next year may be better for college graduates entering the workforce. Employers will hire approximately 8 percent more new college graduates for U.S. operations in 2013-14 than they did in 2012-13, according to the National Association of Colleges and Employers’ NACE 2014 Job Outlook Survey, conducted Aug. 5 through Sept. 13, 2013, among its college-recruiting professional members. The results from the 208 returned surveys revealed that companies overall will hire 12 percent more new college graduates for U.S. and international locations combined.

Mobile applications and software developers will have plenty of job opportunities in 2014, according to an annual salary guides published by staffing services company Robert Half International (RHI)Overall, base compensation for information-technology professionals in the United States is expected to increase 5.6 percent in 2014, primarily because of the higher demand for workers who can fill IT positions, RHI reported in an Oct. 14, 2013, press statement.

The next highest average starting salaries in the U.S. are forecast to rise approximately 3 percent in 2014 for newly hired accounting and finance professionals as well as for creative and marketing professionals, according to RHI.

Perhaps buoyed by improving conditions in the labor market, many workers will be looking for other opportunities in the new year, according to a survey by Right Management, a subsidiary of staffing management firm Manpower. Of the 871 U.S. and Canadian employees polled online from Oct. 16 to Nov. 15, 2013, 83 percent admitted they will look for a job in 2014. In addition, 12 percent were unsure but admitted to networking and updating their resume; only 5 percent plan to stay in their current position.

“These numbers should signal a wake-up call for top management, when four out of five employees say they intend to look for employment elsewhere,” said Right Management’s Global Practice Leader for Employee Engagement Scott Ahlstrand. “Employers must act now to engage top talent and prevent them from leaving for the competition.”

For more information, visit SHRM’s Labor Market and Economic Data page.

Joseph Coombs is a senior analyst for workforce trends at SHRM.

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