The latest findings from LinkedIn’s Workforce Confidence Index survey were released on November 21, 2024, providing important data for the recruiting industry headed into 2025. The report tells a stark story about employee morale in the US workforce, which will undoubtedly impact recruiting through at least Q1 ’25.
LinkedIn’s survey, which was conducted from late September through October 2024, found that less than half of US employees (45%) expect to receive a pay raise in the next six months, while less than a quarter (22%) expect to be promoted in the same timeframe.
The Impact on Executive Recruiting
The report’s authors attribute low employee morale regarding compensation and promotions to economic uncertainty and employers’ limited pay increase budgets.
While inflation in the US economy has been tamed after hitting decades-high peaks in 2021 and 2022, the fact remains that prices for everyday goods are still high. The separate LinkedIn Executive Conference Index survey found that 49% of US executive leaders say raises and promotions have recently become more limited at their organizations, confirming what employees feel.
Shifting Expectations Among Leaders
When recruiting for executive talent, you can expect to see shifting expectations among leadership candidates. The combination of economic uncertainty and a lowered expectation of significant pay increases will lead executive candidates to prioritize stability and the potential for long-term growth.
Short-term incentives like performance-based bonuses and profit sharing will be less attractive than the promise of a stable position with long-term growth potential. Recruiters must adapt compensation strategies to match this outlook to attract top talent in 2025.
Talent Retention Challenges
At the same time, tight budgets may create retention issues among executives and high performers. The yearning for stability in uncertain times could lead top talent to seek better long-term deals elsewhere. Recruiters should start counseling their organizational leaders about these employment trends and push for a reshaping of upper-tier compensation packages. Non-monetary incentives, like career development programs and flexible work opportunities, can help retain top talent.
The Effect on Team Morale and Productivity
When workers feel less confident about their careers and economic prospects, it shouldn’t be ignored. Company managers and leaders should respond before this sentiment negatively impacts team morale and productivity.
Employee Sentiment and Engagement
Limited raises and promotions dampen morale, creating the potential for long-term disengagement; productivity tends to suffer as engagement levels drop, ultimately leading to employee retention problems. Managers can counter these trends with a commitment to honesty and transparency. Being straightforward with employees in tough times shows that you value and respect them, which will improve morale and start to restore engagement.
Leadership’s Role
Like all employment and economic trends, the current moment will pass. Leaders can project optimism about the future to help improve morale and maintain productivity. This extends to the C-suite, too. Executives should be models of optimism while communicating clearly about organizational priorities. Recruiters should promote the career pathways and opportunities within their companies to give workers a sense of stability.
