In 2023, the U.S. economy ended up performing better than expected, ending on a seemingly high note with the addition of 216,000 jobs in December. But businesses and their employees still felt a great deal of uncertainty throughout the year and are wondering what to expect in the months ahead. In this blog, we’re sharing insights into some of the country’s key industries and what we’re seeing when it comes to the economy and hiring in 2024.
Related content from Aleron Group partner Acara Solutions: What 2024’s Economic Outlook Means for Hiring
Energy and Utilities
The outlook for the utilities is strong, as the U.S. and much of the world gradually moves from an oil-driven economy to an electricity-driven economy. This shift will greatly benefit utilities. According to Deloitte, the industry may see as much as a tripling in demand for electricity over the next 25 years, which will translate to more jobs. The Department of Labor is predicting rapid growth in the solar, geothermal, and wind power generation industries over the next decade amid the continued push toward renewable energy sources. Shorter-term, hiring across the utilities sector is likely to remain steady in 2024.
Before the pandemic, travel and tourism grew by 4 to 7 percent annually for 20 years. Of course, that all changed in 2020, and the hospitality industry has had a rocky few years trying to bounce back. But better days may be ahead, as experts predict more stability in 2024. Demand for hotels grew by 0.9 percent in 2023 and is expected to increase by 1.8 percent in 2024.
Hotels continue to struggle with hiring. In a June 2023 survey by the American Hotel & Lodging Association, 82 percent of hotels reported staffing shortages and said they are incentivizing new hires with increased wages, greater flexibility, and expanded benefits to close the gap. Although some businesses in the hospitality industry are turning to technology to ameliorate the problem, it’s by no means a silver bullet, and workforce challenges will persist in 2024.
Related: Hail to the CHRO in Hospitality
There’s reason to be optimistic about U.S. manufacturing in 2024—experts are predicting industry growth. With more of the manufacturing workforce reaching retirement age, companies must make a concentrated effort to ensure knowledge-sharing with younger employees.
Like employers in many industries, manufacturers are challenged to find qualified talent. As of December 2023, 75 percent of manufacturers reported hiring difficulties. Of that group, over 40 percent said they raised wages to recruit new hires, and the same number shared that they did not hire as many workers as they would have liked.
Finance and Insurance
50 percent of the insurance industry workforce is projected to enter retirement by 2028, which is good news for millennials, Gen Z, and anyone else looking to change careers. However, with more insurance companies adopting AI, workers will need to be tech-savvy enough to use these new tools efficiently and effectively.
The finance industry—banking, in particular—laid off workers consistently throughout 2023, with five of the largest U.S. banks cutting a combined 20,000 positions between January and October. Altogether, more than 60,000 banking jobs were lost in 2023, and more layoffs may be on the way in 2024.
Related: Accounting & Finance Salary Guide
Demand for semiconductors is expected to increase significantly by 2030 and beyond, and companies are ramping up production accordingly. The Semiconductor Industry Association predicts that the industry’s workforce will add 115,000 jobs by 2030—a 33 percent increase from 2023. Roughly 58 percent of projected new jobs, and 80 percent of projected new technical jobs, risk going unfilled based on current degree completion rates. Given the critical role of semiconductors in the technologies that power our economy, it’s critical that the industry continue its efforts to close the talent gap.
Is Economic Uncertainty Here to Stay?
We did not get the recession that many experts were predicting in 2023, but Americans still faced a difficult economy marked by rising prices and mortgage rates, inflation, and widespread layoffs in multiple key industries.
According to data from the Federal Reserve Bank of Richmond, median expected employment growth stands at 2.7 percent for 2024—up from 2.2 percent in 2023—and median revenue growth is expected to remain steady at 5 percent for 2024.
With 2024 being a presidential election year, economic performance is also sure to impact the race—not to mention that uncertainty over politics often bleeds into concerns over the economy. Even so, nearly three-quarters of CEOs feel confident about global economic growth in the next three years.
Contingent labor can be a great way to protect your organization from economic ups and downs, and our team at Broadleaf is here to help you develop a workforce program that meets your needs in labor markets of all types. Contact us today to learn more about our total talent management solutions and how we can work together in 2024.
This blog was authored by Broadleaf’s Senior Vice President of Client Delivery Suzie Mitchell.