Indeed Chief Economist Svenja Gudell shares new data and insights from Indeed Hiring Lab that shed light on where the labor market is heading, GenAI’s effect on jobs and how we can shape the future of work.

Key Takeaways

  • Increasing demand for workers and decreasing supply could lead to a labor shortage in just a couple of years.
  • Indeed data shows that employers are embracing skills-first hiring and prioritizing benefits to compete for scarce talent.
  • Hiring Lab’s research finds that while GenAI can help with many tasks, it still cannot completely replace humans in any occupational skills.

As it turns out, GenAI won’t be taking your job — it can’t even manage a single task without you. “There are no skills, literally zero, where GenAI is very likely to replace a human,” Svenja Gudell told the audience of talent leaders at Indeed FutureWorks 2024 in Dallas, Texas.

As Indeed’s Chief Economist, Gudell oversees Hiring Lab, Indeed’s economic research arm, where her team does deep analysis of the labor market and, most recently, GenAI’s potential to eliminate jobs. During her presentation of new Hiring Lab insights, she emphasized that employers can set their hiring strategies apart by looking at the data as more than numbers — it’s people.

Indeed Chief Economist Svenja Gudell onstage at Indeed FutureWorks 2024

“The working mom trying to find a job that offers more flexibility; the recent college graduate trying to find a job that offers student loan assistance; the employer trying to figure out how AI will impact her workforce — these people and their stories form the backbone of our data and research,” Gudell said.

Here are the key insights she shared: 

Shifts in Labor Demand and Supply Could Create a Labor Shortage — Soon

Where have all the workers gone? Labor demand is still relatively high compared to pre-pandemic levels, Gudell explained, but it’s not obvious where this labor is going to come from. 

  • Indeed has 13% more job postings today than it did back in February 2020.
  • In most developed nations, the share of the total population that’s aged 25 to 54 is expected to decline. 
  • The U.S. labor market is strong enough to keep attracting workers to the labor force, but not strong enough to get them a job as quickly as in the past. 

What does this mean? There will be more workers aging into retirement than entering the workforce to replace them, causing the labor force participation of all ages to fall globally. We’re likely to feel the reality of a labor shortage by early 2026, if we’re not already.

What Can Employers Do Now To Compete for Talent?

1. Take a skills-first hiring approach and expand your talent pool to people with more diverse or nontraditional backgrounds.

2. Invest in pay transparency to align with job seekers from the start and save valuable time during pay negotiations.

  • Hiring Lab’s research indicates the top reason job seekers switch jobs is compensation.
  • 57.2% of job postings in the U.S. include salary information — up from 20% five years ago.
  • Wage growth is slowing — it peaked around 9% in 2021 and has now dropped to a more sustainable 3.3% — but it’s still slightly higher than in pre-pandemic days.
  • Job seekers respond strongly to cash incentives. If your budget constraints limit wage increases, try offering signing bonuses — job postings that advertise a signing bonus remain elevated on Indeed as of August 2024 when compared to pre-pandemic levels of 3.7%.

3. Include flexible options to attract more candidates from diverse areas and help enable a work-life balance.

  • Remote and hybrid jobs have increased 3x since the pandemic.
  • Searches on Indeed for remote and hybrid work are at an elevated level, and it doesn’t seem to be dropping.

4. Get bold with your benefits, as this could be the deciding factor in whether or not a candidate clicks on your job posting instead of a competitor’s.

  • 59% of job postings advertise at least one employer-provided benefit, up from less than 40% in early 2020.
  • If you can’t add new benefits, overtly advertise the ones you already offer. Indeed data shows that more job seekers engage with job postings that advertise more benefits — especially for low-wage jobs.

To learn more about which benefits are most common and which could give you a competitive edge, check out Hiring Lab’s research series on benefits in job postings.

AI Can Do a Lot, But Not Your Job

AI vs. humans? New research from Hiring Lab identified more than 2,800 skills within the millions of job postings on Indeed and evaluated GenAI’s ability to do them. Using a scale of “very unlikely” to “very likely,” the team found:

  • Of the thousands of unique work skills Indeed identified and assessed, none were “very likely” to be replaced by GenAI.
  • The technology is only “likely” to replace less than 3% of skills that Hiring Lab assessed. These are more technical skills within fields like accounting and advertising, while in-person roles, such as cooks or drivers, are less susceptible.
  • GenAI-related jobs have grown exponentially since the technology burst onto the scene in late 2022. However, they still represent only about 1 in 1,000 U.S. jobs.
This chart is titled Replacement Potential by GenAI Across Occupations. It illustrates the likelihood of GenAI replacing a human in performing various skills, shown as the percentage share of skills in U.S. job postings on Indeed. The replacement potential is rated from very unlikely (1) to very likely (5). Data represents the average of daily values over the past year (August 1, 2023 to July 31, 2024). Accounting occupations have the highest replacement potential, while cooks fall into the lowest category.

Indeed Hiring Lab’s research shows that accounting occupations are most susceptible to AI replacement, while cooks are unlikely to be replaced.

What does this mean? AI isn’t coming for your job — despite rapid advances in GenAI and fears of a mass displacement of workers, the technology won’t easily replace human skills in the workforce any time soon. The research shows that GenAI’s impact on an occupation depends on how well the technology can perform the skills within that job.

In roles with a high share of skills requiring hands-on execution, GenAI can help with repetitive tasks. In more stereotypical “office jobs,” GenAI may be good at many technical skills and modest problem solving. However, today’s GenAI is unlikely to fully master even a single occupational skill without human oversight.

What about AI in talent attraction? While AI can help support a skills-first hiring strategy, it can only get you so far — it can’t replace the human judgment and interaction that candidate assessment and interviewing require. Overall, Gudell emphasized that the technology is only “likely” — and not even “very likely” — to replace a human in 12% of the tasks a typical HR role requires.

These “likely” functions include tasks like summarizing resumes, writing job descriptions and generating interview questions. However, Gudell explained that integrating this technology to do more with less will be what helps teams across all industries overcome the impending labor shortage.

“What is true right now is that GenAI will not take your job. However, the person that knows how to use these tools definitely will,” she said. “Embracing AI as a tool is the key to staying relevant in this evolving landscape.”

Keep up with the labor market in real time on the Hiring Lab Data Portal, where you can track the number of job postings and their average wages, plus the developing amount of remote and AI-related jobs on Indeed.

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