The Impact of Debt on Career Decisions

This is it, the week of the election! I have recently wrote about the potential impact of the election on the economy and the job markets. Now that the election is tomorrow (of all days why my birthday?!) it's time to put the rubber to the road and take a deep look at what many workers are experiencing in this current economy and what changes they are making to keep up with the rising costs of living. It's vital that employers consider this as they open more jobs, move into new markets as well as moving company HQ's. Consumer reports show that many Americans are using credit cards to ensure bills are paid and food is on the table. With gas prices in some markets exceeding $5 per gallon, many people are leveraging the gig economy or multiple jobs just to get by.

A recent Workforce Monitor survey, commissioned by the American Staffing Association and conducted by The Harris Poll, reveals that 40% of U.S. workers say their current debt is influencing their career decisions. This statistic underscores a critical issue affecting the American workforce, highlighting the significant role that financial burdens play in shaping professional choices and career paths.

The survey, conducted in August 2024, found that 73% of U.S. workers carry some form of debt, including mortgages, credit cards, student loans, and medical debt. Of these, 40% report that their debt influences their career decisions. The impact is particularly pronounced among younger workers, with 50% of Gen Z (ages 18–27), 54% of Millennials (ages 28–43), and 42% of Gen X (ages 44–59) acknowledging the influence of debt on their professional lives.

Rising Debt and Job Security Concerns

The Federal Reserve Bank of New York's recent report on rising mortgage, home equity lines of credit, credit card, and auto loan balances in the second quarter of 2024 adds context to these findings. Credit card delinquencies, in particular, have increased at the highest rate in a decade. Richard Wahlquist, CEO of the American Staffing Association, emphasizes the broader implications of this trend: "Increased levels of personal debt result in unhealthy levels of stress, damaged credit scores, limited mobility in the job market, reduced quality of life, and reduced prospects for the future for a growing number of individuals and their families."

In addition to debt-related stress, job security is another pressing concern for many U.S. workers. The survey reveals that 28% of workers are worried about being laid off before the end of the year. This concern is especially prevalent among Gen Z (37%) and Gen X and Millennial workers (35%), compared to only 11% of Baby Boomers.

Implications for IT and Professional Staffing

The insights from this survey have significant implications for IT and professional hiring sectors. As workers grapple with debt and job insecurity, their career decisions are increasingly influenced by financial considerations, which can impact the talent pool available for hiring managers and staffing agencies alike.

1. Shift Toward Stability and Flexibility

Workers burdened by debt may prioritize job stability and financial security, leading them to seek positions that offer steady income, benefits, and job security. This trend could drive increased demand for roles in industries and companies known for stability, including IT and professional services. Companies must be prepared to meet this demand by offering positions that cater to these needs.

The Rise of Side Hustles

The survey also found that 56% of U.S. workers are likely to get a side hustle soon. This trend suggests a growing need for flexible, part-time, or gig opportunities that allow workers to supplement their income. Companies can capitalize on this trend by offering a diverse range of job opportunities, including freelance, contract, and part-time positions in IT and professional fields.

Addressing Job Security Concerns

With a significant portion of the workforce concerned about layoffs, companies can play a crucial role in providing job security. By building strong relationships with staffing agencies and advocating for long-term contracts and permanent placements, agencies can help alleviate workers' fears and provide a sense of stability.

Financial Wellness Programs

To address the underlying issue of debt influencing career decisions, companies might consider partnering with financial wellness programs. Offering resources and support for financial planning, debt management, and credit repair can enhance the overall well-being of placed candidates, leading to more satisfied and stable employees.

The influence of debt on career decisions is a complex issue that requires a multifaceted approach. For IT and professional hiring managers, understanding the financial pressures facing today's workforce is crucial for effectively matching candidates with suitable job opportunities. By addressing the needs for stability, flexibility, and financial wellness, companies can better support their candidates in navigating the challenges of the modern job market.

As the landscape of work continues to evolve, the insights from this survey provide valuable guidance for professionals looking to make a meaningful impact on the lives of workers and the success of businesses.

If you are a recruiter or hiring manager that is planning for Q4 2024 and 1st Q 2025, let's talk about how you can ensure your growth goals are met through effective hiring!

kal.price@procomservices.com, 346-439-0625.