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GLASSDOOR’S 2024 WORKPLACE TRENDS

Aaron Terrazas and Daniel Zhao

November 15, 2023

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Many economists entered 2023 with an impending sense of doom: Recession felt
inevitable amid sharply rising interest rates and accelerating layoffs. Despite
moments when the U.S. economy appeared to tremble – through a short-lived
banking crises, strikes and labor negotiations, fiscal brinkmanship, and
escalating geopolitical conflict – doomsday kept getting punted to the future.

By most expectations, the United States is likely to finish 2023 having avoided
an official recession (despite meaningful sector-specific and regional
slowdowns) – due in large part to the remarkable resilience of the labor market
and continued consumer spending. The worst of layoffs are likely behind us, and
the consensus is for hiring to haltingly improve over 2024.

The world of work is normalizing as pandemic-era disruptions fade. For many
workers, 2023 was a rude awakening: Talent may be talented, but precious few
skills are irreplaceable. The frenetic pace of hiring and talent wars of 2021
and 2022 are past, and corporate leaders are doubling down on themes of prudence
and productivity. Beyond a handful of growth niches like AI and green tech,
leaders are thoroughly scrutinizing new and existing ventures.

Looking ahead, there are still real risks to the global economy – from ongoing
conflict, to commodity prices amid volatile weather patterns, and still-too-high
inflationary pressures. With a renewed focus on cost structures across the
corporate world, fractures are building beneath the surface of the workplace –
even if they are not quite yet visible.

The coming year will test the robustness of workplace institutions. As
stakeholder demands on businesses grow – from employees, from customers, and
from investors – companies could increasingly gravitate toward cultural poles –
a clash of workplace civilizations, to borrow from a popular
turn-of-the-millenium narrative.

There is light ahead, but we are not quite out of the woods yet. Here are eight
workplace trends that we expect to see in 2024, based on Glassdoor’s unique data
window into workplace satisfaction, culture, and conversations:

Trend 1. More Zoomers, Fewer Boomers. Gen Z will overtake Boomers in the
full-time workforce.
Trend 2. Sticky wages, slippery benefits. Wages and salaries are likely to
continue increasing, but non-cash benefits could erode.
Trend 3. Cash only. Equity compensation will decline for a second consecutive
year as competition for skilled workers cools.
Trend 4. Layoffs’ long shadows. The consequences of tough decisions made in 2023
will echo in employee morale well into 2024.
Trend 5. Misery in the middle. Middle managers at large companies will feel the
squeeze from above and from below.
Trend 6. Return-to-office carrots, sticks, and carrot sticks. Companies tread
cautiously with top talent; unspoken workplace social codes become more
important.
Trend 7. Small is flexible. Less rigid remote work policies will draw workers
toward smaller companies.
Trend 8. Can I just talk to a person? The proliferation of Generative AI will
make it easier to access information and increase productivity for some workers
in the long-term, but they will also increase the premium on human peer-to-peer
interaction.


TREND 1. MORE ZOOMERS, FEWER BOOMERS. GEN Z WILL OVERTAKE BOOMERS IN THE
FULL-TIME WORKFORCE.

Despite a softening labor market, Gen Z is poised to overtake Baby Boomers in
the full-time workforce by early 2024 – a shift that has been long coming. Gen
Z, or Zoomers, have been seen as “kids”, but they are increasingly coming of age
and making up an important share of the American workforce.[1]

Boomers were the largest generation in the full-time workforce from the late
1970s until late 2011. Gen X had a brief period of generational workforce
dominance from 2012 to 2018, when Millennials overtook them. Millennials and Gen
X still outnumber Gen Z, and Millennials are poised to dominate the workforce
for many years to come. By our estimates, Gen Z won’t outnumber Millennials in
the workforce until sometime in the early 2040s.

The coming year will still represent a pivotal moment of cultural change that
U.S. companies cannot ignore as Gen Z workers – who care deeply about community
connections, about having their voices heard in the workplace, about transparent
and responsive leadership, and about diversity and inclusion – make up a rapidly
growing share of the workforce.




TREND 2. STICKY WAGES, SLIPPERY BENEFITS. WAGES AND SALARIES ARE LIKELY TO
CONTINUE INCREASING, BUT NON-CASH BENEFITS COULD ERODE.

Conventional economics suggests that wages and salaries almost never decline in
dollar terms for individuals who stay in the same job at the same company
because most people have such a strong aversion to seeing smaller paychecks hit
their bank account. Glassdoor data suggest that only about 7 percent to 8
percent of workers who stay in their same job at the same employer in a typical
year see their salary decline on an annual basis. In 2023, it’s tracking a touch
higher at 10 percent, but employers looking to cut costs have more levers beyond
salary.

While there may be an aversion to downward adjustment for wages and salaries, we
know that during soft labor markets there are other dimensions of total
compensation that commonly decline. These include hours worked (for non-salaried
workers), equity and incentive-based compensation, and the company-contribution
to the cost burden of benefits like health insurance or retirement plans.
(Salaries may also decline when workers switch jobs, particularly if the change
is involuntary.)

There is some evidence that benefits access has started to erode, a trend that
could accelerate in 2024. Glassdoor benefits data suggest that the shares of
employees with access to 401k plans, dental insurance, tuition assistance,
commuter assistance, gym memberships and mobile phone discounts has declined,
and the share reporting access to vision insurance has stagnated. These declines
have, for the most part, been more pronounced in industries that experienced
turmoil in 2023, such as tech and finance.

There are a small number of benefits that continued to rise in 2023: fertility
assistance, adoption assistance, parental leave, and mental healthcare. During
the tight jobs markets of 2021 and 2022, there was a widespread effort to make
working more accessible for parents, or perhaps to attract Millennials on the
cusp of their prime family-formation years. That tide could ebb – or even turn –
in 2024 as labor is more available, and companies scrutinize costs and identify
the benefits that are most (and least) important to their employees.




TREND 3. CASH ONLY. EQUITY COMPENSATION WILL DECLINE FOR A SECOND CONSECUTIVE
YEAR AS COMPETITION FOR SKILLED WORKERS COOLS.

Equity compensation can be a powerful and attractive way for workers to share in
the success of their company, but workers also have less visibility into how
their equity compensation compares historically or against their peers, giving
employers a lever to control costs in a slower labor market. Nowhere is this
clearer than in the tech industry where equity compensation has long been a
central pillar of total compensation packages.

Entry-level equity compensation in the tech industry could decline for a second
consecutive year in dollar terms. This means that the typical entry-level equity
grant in tech will have been effectively flat in dollar terms since 2015, and
down by roughly 30 percent in inflation-adjusted terms.[2]

Equity grants for more experienced tech workers are also likely to decline in
nominal terms. Since they increased much more sharply over the past decade, they
are still net positive after inflation. In 2015, the typical equity compensation
for more experienced tech employees was about 50 percent more than for early
career tech employees; in 2023 the gap is closer to 90 percent.

The amounts reflect grant values. Real erosion of grant values mattered less
when stock markets were booming since employees would see their account balances
increase. As the stock market stagnates and the values of privately held
companies decline – as they have historically during periods of rising or high
interest rates – many early career employees will feel like their total
compensation is falling due to the declining value of their equity compensation
portfolios. There is likely to be a renewed appetite for pay transparency beyond
salaries and wages, which is uniquely complex for financial assets like stocks
and options.

It’s clear that the late-2010s tech heyday is over. Looking past the
mid-pandemic anomaly, it has been over for some time for early career workers.
Even if the broader labor market remains resilient in 2024, something has
shifted in the way tech talent is compensated. Tech could lose its luster for
workers relative to other industries with more conventional – and stable –
compensation philosophies.




TREND 4. LAYOFFS’ LONG SHADOWS. THE CONSEQUENCES OF TOUGH DECISIONS MADE IN 2023
WILL ECHO IN EMPLOYEE MORALE WELL INTO 2024.

Employers who undertook layoffs in 2023 have seen sharp drops in employee
satisfaction, as measured by Glassdoor ratings. But perhaps surprisingly, these
effects are still ongoing even many months after the layoffs took place.
Glassdoor ratings continue to stagnate if not deteriorate even up to 180 days
after the layoffs in 2022 and 2023.

In the 30 days following a layoff, employers’ overall rating drops 4 percent on
average to 3.49 from 3.66. Additionally, overall ratings stay that low, even 180
days after the layoffs. These rating declines in the month after a layoff are
most severe for senior management (-8 percent) and CEO approval (-16 percentage
points) where employees are upset at leaders about the layoffs and their
assessments change little in the 6 months that follow a layoff.

Similarly, Career Opportunities (-6 percent) and Business Outlook (-13
percentage points) fall sharply as workers worry about their future prospects,
while measures like Culture & Values (-4 percent), Diversity & iInclusion (-3
percent) and Work-Life Balance (-1 percent) see smaller immediate drops.

For most of these dimensions, ratings stabilize after the initial drop, but
ratings for Culture & Values and Work-Life balance continue to decline another 3
and 4 percent respectively during the 150 days following the initial 30-day
drop. While the impact on Culture and Work-Life Balance may not be immediately
felt after a layoff, there can be an ongoing impact from longer-term burnout,
weaker employee culture and persistent employee disengagement that employers
must be aware of.




TREND 5. MALAISE IN THE MIDDLE. MIDDLE MANAGERS AT LARGE COMPANIES WILL FEEL THE
SQUEEZE FROM ABOVE AND FROM BELOW.

The middle seat is often the most uncomfortable, particularly during moments of
turbulence. Amid cost cutting, layoffs, RTO and organizational flattening,
things got uncomfortable for middle managers at large companies during the
second half of 2023: They suddenly became the enforcers of sometimes unpopular
corporate policies and the scapegoat for organizational bloat, while having to
simultaneously ask more of their thinly stretched frontline teams.

The stress is showing in their job satisfaction: While Work-Life Balance ratings
on Glassdoor were stable for more senior and more junior employees, there has
been a sharp drop in ratings among middle managers at large companies.

There is little on the horizon to suggest that this trend will abate or reverse
in 2024. There is risk here for companies. Middle managers are often skilled
operators that navigate the murky decisions between high-level business
priorities and brass tacks technical implementation. Derided as “management
bloat” in some recent corporate announcements, they can and frequently do
provide an essential function in large, complex organizations. Some middle
managers will rethink their career paths and opt out toward individual
contributor roles, but the corporate middle seat is unlikely to become any more
comfortable.




TREND 6. RETURN-TO-OFFICE CARROTS, STICKS, AND CARROT STICKS. COMPANIES WILL
TREAD CAUTIOUSLY WITH TOP TALENT; UNSPOKEN WORKPLACE SOCIAL CODES WILL BECOME
MORE IMPORTANT.

Companies seeking to attract workers back to the office focused on a combination
of carrots (e.g., in-office meals, events) and sticks (e.g., penalties for
noncompliance) in 2023. The push started out with a focus on carrots, but
evolved toward more sticks as the labor market softened over the course of the
year.

In 2024, companies are poised to navigate an increasingly perilous knife’s edge
between prudent cost management and alienating valuable employees amid a
surprisingly resilient job market. As a result, we expect more “carrot sticks” –
policies somewhere in between to gently reward and enforce RTO.

What do “carrot sticks” look like? Often they are the flexible or unspoken rules
of corporate culture that are rarely codified or uniformly enforced. Think of
activities like face-to-face peer mentoring, recognition for voluntary
participation in social activities, and empowering managers to have greater
discretion in advancement or compensation. Even now, companies have still not
figured out how to find the perfect balance of the benefits of in-person work
with the desires of their workforces. In 2024, employers will continue
experimenting with the right strategy for work arrangements as they settle on a
new normal.


TREND 7. SMALL IS FLEXIBLE. LESS RIGID REMOTE WORK POLICIES WILL DRAW WORKERS
TOWARD SMALLER COMPANIES.

Despite generally lower salaries and less expansive benefits, mid-sized and
small companies long distinguished themselves in competitive talent markets by
offering something that large companies could not: Tight-knit workplace
communities and flexible work arrangements. That changed with the pandemic when,
suddenly, everyone was flexible.

The tides began to reverse again in 2023. Companies – most visibly, the largest
corporate titans – retrenched on office-based facetime driven by the conviction
that remote workers are less productive. A poll of the communities on Glassdoor
in June 2023 indicated workers were not happy with return-to-office mandates,
with 54 percent of professionals saying they are not comfortable with their
company implementing a hybrid work policy. Additionally, both access to and
satisfaction with work-from-home benefits have fallen in 2023 for the largest
companies while continuing to rise for small- to medium-sized businesses. Remote
jobs have become much scarcer, but they have hardly disappeared. They continue
to thrive at mid-sized and small companies.

In 2024, flexibility will be a key factor in draw talent away from large
companies.




TREND 8. CAN I JUST TALK TO A PERSON? THE PROLIFERATION OF GENERATIVE AI WILL
MAKE IT EASIER TO ACCESS INFORMATION AND INCREASE PRODUCTIVITY FOR SOME WORKERS
IN THE LONG-TERM, BUT THEY WILL ALSO INCREASE THE PREMIUM ON HUMAN PEER-TO-PEER
INTERACTION.

The large-scale, commercial application of generative AI and large language
models are marvels of scientific achievement. While they’re very likely to
enhance long-term productivity,  the impacts on labor productivity are unlikely
to be immediately visible in official statistics. In the interim, there are also
risks that – like many new technologies – they could exacerbate the social
isolation that has become endemic across American society and the workplace.

Similar earlier waves of technological innovation have reduced prices for goods
and services while also expanding potential demand – for example, textiles in
the wake of the industrial revolution and transportation with the advent of the
automotive era. But there is also an associated increase in the premium on human
labor, or in this case, the premium on human interaction.

As anyone who has been stymied on an endless loop with automated customer
service call lines can attest, even when automation provides highly accurate
information there is no substitute for the connection with another human being.


FOOTNOTES

[1] This shift occurred in early 2023 if part-time workers are included as well.
Full-time is defined as usually working 35 or more hours per week.

[2] Inflation adjusted using the Bureau of Labor Statistics, Consumer Price
Index for June of each corresponding year.

To speak with Aaron Terrazas about this report, please contact pr@glassdoor.com.
Glassdoor Economic Research

To speak with Daniel Zhao about this report, please contact pr@glassdoor.com.
For the latest economics and labor market updates follow @DanielBZhao on
Twitter, connect on LinkedIn, and subscribe to Glassdoor Economic Research


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