What Will the World of Work Look Like in 2022? Expect Employees To Remain in the Driver’s Seat, Demanding More Out of Work

As Chief Economist at LinkedIn, I lead a team of economists and data scientists that unearth the most interesting insights from over 800M global members. Every month I’ll share a snapshot of key trends to help shed light on where the world of work is headed. This month, we’re looking at predictions for the year ahead. 

2021 brought major changes that reverberated throughout the U.S. labor market. Workers quit and switched jobs at a record pace, the economy staged a strong rebound nearly six times faster than the last recession, and employers embraced remote and hybrid work in a big way. The burning question on the minds of employers and employees alike is whether these changes are pandemic era features or permanent changes that will forever reshape how we work.

While we don’t have a crystal ball, here are three things we’re seeing in our data that I think are here to stay in the year ahead:

The employer/employee dynamic dramatically shifted as the social contract of work was re-written during the pandemic. For the first time in decades, employees were in the driver’s seat - demanding more favorable terms from employers. In 2021, we saw job seekers become extremely choosy, applying to a more selective range of roles, getting hired more quickly,  and driving a harder bargain with employers to ask for more flexibility, compensation, and growth opportunities. 

A clear example of this was employers’ response to the growing appetite for remote work. In March 2020 only 1 in 67 paid U.S. jobs on LinkedIn offered remote work, but now that number has exploded and is up to nearly 1 in 6. Employees are demanding what they want and employers are coming to the table willing to negotiate. 

In 2022, we expect it to remain a job seeker’s market. The U.S. unemployment rate, currently 4.2%, could reach 3.5% by this time next year - the level we were at pre-pandemic. Upward wage pressure will likely continue. And amid this new “seeker’s market” employers will need to focus on minimizing attrition through what we know employees care about most - strong culture and benefits, clear career paths, and flexibility.

For many different reasons, millions of Americans became entrepreneurs over the past year and a half. On the one hand, early pandemic layoffs created record unemployment leaving millions in need of jobs - driving some to set out on their own as freelancers and business owners. At the same time,  many others experienced a career reset and walked away from working for a company as part of the Great Reshuffle to go off and work for themselves - whether for better flexibility, or to pursue a passion project. 

All in all, we saw company formation surge 36% year-over-year in 2020 with elevated rates continuing into 2021. One stand-out trend is that women in particular really emerged as leading the charge in this entrepreneurial surge: the number of women-founded companies on LinkedIn grew 27% in the pandemic period vs the pre-pandemic period. The number of male-founded companies grew by only 17% during the same period. 

This wave of new businesses - with many led by female founders - could add fresh dynamism to the labor market, especially if it leads to more job creation and a more efficient economy overall.

In the months and years to come, we expect to continue to see increased focus on skills vs. degrees when it comes to finding and evaluating talent. New research from LinkedIn’s Economic Graph shows that skills are evolving across our 800M+ global members: on average, skills for the same job changed by about 25% from 2015 to 2021. At this pace, we expect members’ skills to have changed by as much as 40% by 2025. Jobs are changing and the skills needed to succeed will continue to evolve. 

During the pandemic era, certain new skills surged in importance. As one example, skills related to virtual work and collaboration increased by over 3x year-over-year during the early pandemic period in April-June 2020. The onset of hybrid work created a need for more efficient collaboration among distributed teams, and we saw our members pick up new skills in response.

While workers will remain in the driver’s seat to demand more out of employers, at the same time, our data suggest that they will still have to keep updating and refreshing their skills to remain competitive in the job market in 2022 and beyond. 

Our relationship with work underwent tremendous shifts over the past year during the Great Reshuffle of work, and we'll be keeping a close pulse on where this all shakes out in the months to come. I look forward to hearing from you on your own predictions and perspectives on what changes you're noticing in your own jobs, and what changes you hope to see in the new year.

Thanks to the team who helps bring this newsletter to life. Wondering how we calculate these numbers every month? See below for the methodologies behind this update. 

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Remote Work: A “remote job” is defined as one where either the job poster explicitly labeled it as “remote” or if the job contained keywords like “work from home” in the listing. The share of remote jobs is calculated in proportion to all paid job postings. 

Future of Skills Research: This analysis represents the world seen through the lens of LinkedIn data, drawn from the anonymized and aggregated profile information of LinkedIn's 800 million members around the world. As such, it is influenced by how members choose to use the platform, which can vary based on professional, social, and regional culture, as well as overall site availability and accessibility. For each job, we identify the most important skills in each year based on LinkedIn’s Skills Genome. More on this methodology can be found here.

Company Formation Index: The Company Formation Index (CFI) is the 3 month average count of unique companies on LinkedIn, measured by the number LinkedIn members who added a new founder position to their profile. We only include LinkedIn members who added a founder position to their profile in the same month the new job began. By only analyzing the timeliest data, we can make accurate month-to-month comparisons and account for any potential lags in members updating their profiles.This number is then indexed to the count in January 2016 ; for example, an index of 1.05 indicates that company formation is 5% higher than in January 2016.

State of Entrepreneurship: Entrepreneurs are LinkedIn members that have self-identified as having a founding or owner role in a company. This report covers the United States, the United Kingdom, India, Australia, and Canada. We compare new companies formed during the pre-pandemic July 2018 to July 2019 period with new companies formed during the July 2020 to July 2021 period.