No market is more broken than the labor market. The changes in the macro and micro environment have created an unseen global dilemma where the needs on both sides of the market are not met.
This year we are sliding into an economic downturn and have ended up with the highest inflation in a generation. Consumer prices are rising but according to the McKinsey & Co 2023 report, people are participating in the labor market less than before COVID-19. Workers did not simply re-up with the same pre-pandemic jobs. Instead, industries were reshaped, workers moved, gained new skills, and took different jobs. But the report highlights that the change in participation cannot explain the labor shortage alone. It is the aging of the population, jobs-skills mismatch, and that the workers are reevaluating what they want from work and life.
Businesses are facing challenges
For companies looking to resume on the pre-pandemic growth path, this is a major problem. After surviving the pandemic, it is not enough to excel in the market previously mastered. Instead, businesses across the world need to rethink the processes to use the resources available because the people are participating anew. Expecting the same results with processes turned unfit will lead to business failure. According to the McKinsey report, it took 40% more time to fill a vacancy in 2022 than it did in 2019. Finding a good fit for people will only get more complex as the gaps between generations and cultures will become more evident. While entering the workforce, Gen Z has already introduced new phenomena such as quiet quitting, leaving most of the businesses confused. According to The New Yorker article, quiet quitting is not a political weapon, a life philosophy, and a policy proposal. It is a reflection of navigation on the broken labor market.
Worker needs have changed
In a study conducted by our product team in early 2023, 62% of surveyed platform workers are not preferring full-time employment over gig work. For the majority (43%) of this group, flexibility was the most important motivation. For the ones who were searching for full-time employment while doing gig work, the most common motivation was easy extra cash (47%), followed by learning opportunities (26%).
Empowering people to participate in new ways will lead to radical innovations transforming society. In addition to the changes in consumer purchasing habits, ride-hailing and delivery services have introduced concepts such as dark stores and ghost kitchens. Just imagine what will come with Web3 or AI.
We at Treamer believe that the change in the labor market is going to be a revolution rather than an evolution. People and organizations worldwide cannot keep stumbling on structures designed for different times. The need for services that help people to navigate the new labor market faster and with less friction will outgrow the traditional employment models. There is a new labor market emerging and we are building a bridge there.
This article is sponsored by Treamer.
