Global hiring slowdown moderates and AI at work accelerates

By Kory Kantenga, Head of Economics, Americas, at LinkedIn

In this edition of the State of the Labor Market, we check in on the global hiring slowdown and explore which industries and job functions look to be on the upswing (or downswing) based on their hiring momentum. Our latest hiring data suggests that the global hiring slowdown continues to moderate in most areas except for Europe.

We also dive into a new report from Microsoft and LinkedIn – the 2024 Work Trend Index – that shows how AI at work has accelerated. While evidence suggests business-level adoption of AI technologies remains limited, knowledge workers at the individual level are taking advantage of the latest tools and seeing opportunities to set themselves apart in an increasingly competitive labor market.

Global hiring slowdown moderates

Spurred by uncertainty and monetary tightening, the global hiring slowdown continues to abate. According to the LinkedIn Hiring Rate, the pace of hiring continues to slow across the globe but at a less rapid clip in several major economies, including the US, Canada, UK, Mexico, Brazil, India, and more recently Australia. The two largest Eurozone economies, Germany and France, continue to see hiring slow despite positive news that the Eurozone exited stagnation and saw inflation lower than expected during the first quarter of this year.

Across advanced economies, a combination of pandemic-era labor shortages, capped labor supply growth, elevated job openings, and depressed layoffs has kept unemployment low, allowing central banks to implement tighter monetary policy to stamp out inflation. If the Eurozone can continue to see inflation cool faster than expected, then we may see the first major rate cuts of the year from the European Central Bank. The US and Canada continue to outperform expectations for growth both in economic activity and employment, which may lead to some delay in rate cuts. However, we have already seen progress on inflation in both countries alongside continued (yet moderating) expansion in the labor market. These developments make it less likely that the labor market will be pivotal for rate cut decisions going forward. Future decisions are more likely to be governed by progress towards inflation targets, which appears to have stalled recently.

Hiring momentum remains dispersed

Broad growth remains one of the defining features of the pandemic recovery and the Great Reshuffle. Across the globe, the pace of hiring accelerated across nearly all industries over this period. In contrast, narrow and uneven growth serves as one of the defining features of the global hiring slowdown. In the US, just three sectors (Government, Leisure and Hospitality, Healthcare and Social Assistance) added 3 in 5 of net job gains during the first quarter of 2024, according to the Bureau of Labor Statistics. This trend recently reversed in April’s jobs report with Government and Leisure and Hospitality posting an anemic number of net job gains.

Given diverging fortunes, we take a look at changes in hiring momentum across industries and job functions to see which areas look to be on the upswing and which do not. Hiring in Technology, Information, and Media looks to be on the upswing in the US and Australia, having the largest upswing in hiring momentum in the last six months. In the US, Technology, Information, and Media continues to lead hiring stabilization, with the pace of hiring changing little from March to April (+0.3%) and only down -2.3% year-over-year (second only to Consumer Services). While the overall US hiring rate has slowed 7.3% since July 2023, the hiring rate for Technology, Information, and Media has accelerated 7.2% within that same timeframe.

Hiring in the Oil, Gas, and Mining industry looks to be on the downswing across several major countries (Brazil, India, Mexico, United Kingdom). The slowdown in industrial production in places like Europe has likely capped growth for the oil market, limiting short-run hiring perspectives. In contrast, Utilities look to be on the upswing in Brazil and Germany. One of the driving forces behind Utilities is likely to be solar. In the US alone, solar is expected to be the primary source of growth in electricity generation.

Entrepreneurship appears to be on the upswing in countries where nation-wide hiring continues to slow without moderation like France and Germany. While in emerging markets like India and Mexico, consulting looks to have momentum in stark contrast to other economies where Professional Services (which includes consulting) has borne the brunt of interest rate hikes. In the US, sales roles look to be on a hiring upswing whereas legal roles look to have the least momentum. The downswing in legal hiring is likely driven by tepid business spending rather than any kind of disruption.

AI at work accelerates

New data suggests that AI usage at work has accelerated in a rather unique way. According to Microsoft and LinkedIn’s 2024 Annual Work Trend Index, the “use of generative AI has doubled in the last six months with 75% of global knowledge workers using it.” In contrast, according to the US Census Bureau, only around 5% of businesses report using AI in the last two weeks to produce goods or services with only around 7% reporting plans to use AI in the next six months. The limited dispersion of AI among businesses and sizable dispersion among knowledge workers indicates that workers are making use of AI tools even at companies where AI tools are not deployed across the business. In fact, 78% of AI users are bringing their own AI tools to work according to survey evidence from the 2024 Annual Work Trend Index. While many technologies disperse from the top-down (i.e., businesses deploy the technologies and workers learn them at work), it appears that newer AI technologies are dispersing into the workspace from the bottom-up (i.e., workers are using AI to do their jobs despite employers not deploying AI across the business). In practice, knowledge workers appear to be using open source tools like ChatGPT and Copilot to perform or enhance their productivity on work tasks. While untracked, the productivity gains associated with the adoption of these tools have the potential to be meaningful at an aggregate level if the uptake rate of these tools among knowledge workers is any indication.

So how is AI being used at work? In prior work by LinkedIn’s team of researchers, we noted that content creation looks to be an area more exposed to generative AI disruption compared to others. Now indeed, it appears to be the case that new AI technologies are gaining traction in this area. At the business level, according to the Census Bureau, the most prolific current and future use of AI is marketing automation followed by virtual agents, chat bots, and data analytics. This evidence aligns with the Work Trend Index which notes that marketers top the list of members globally adding AI aptitude skills like ChatGPT and Copilot to their LinkedIn profiles. In fact, two of the top ways B2B marketers say they plan to use generative AI this year include increasing efficiency to focus on higher value work (55%) and creating optimized and engaging content that resonates with target audiences (51%). Overall, content writers, graphic designers, and marketing managers hold the largest shares of LinkedIn members adding AI aptitude skills to their profiles.

So if businesses look cautious about deploying AI at scale, what is driving adoption among knowledge workers? Workers look to be anticipating the rising demand for AI skills, AI aptitude in particular, in an increasingly competitive labor market. Overall, we have seen a 142x increase in the addition of AI aptitude skills to LinkedIn profiles. According to the Work Trend Index, 66% of leaders say that they would not hire someone without AI skills, and workers are responding. Hence, we see 76% of global professionals surveyed saying that they need AI skills to “remain competitive in the job market.” The job market is not only competitive today but increasingly so. In the US alone, job search intensity has risen consistently since economic headwinds arose in early 2022. With no immediate turnaround in hiring in sight, workers are looking to AI to increase their productivity and competitive edge.

For more insights, check out our latest US Workforce report as well as Microsoft and LinkedIn’s 2024 Annual Work Trend Index.