Employee confidence dips to lowest levels amid layoffs, hiring freezes

Discussions around layoffs in U.S. surge 27% on Glassdoor

Employee confidence dips to lowest levels amid layoffs, hiring freezes

The start of 2024 has ushered in a subdued trend in employee confidence, marking a notable decline, as indicated by the latest insights from the Glassdoor Employee Confidence Index.

The data reveals a concerning trajectory, with only 45.6% of employees in the U.S. expressing optimism about the business outlook for the next six months in January 2024.

This figure marks a drop from 47.5% in December 2023, representing the lowest level recorded since the index’s inception in 2016. Despite a modest upswing toward the end of 2023, employee confidence faces a shaky start in the new year.

With headlines dominated by reports of increased layoffs, job security has emerged as a paramount concern among employees. The prevalence of discussions surrounding layoffs continues to surge, witnessing a notable uptick in January, soaring 27% year-over-year, according to Glassdoor.

Although actual layoffs remain relatively low compared to historical levels, the discourse on Glassdoor reviews indicates a heightened awareness and uneasiness surrounding job security, surpassing pre-pandemic levels observed in 2019.

Prevalent hiring freezes in recent times

One contributing factor to the muted employee confidence stems from a sharp decline in hiring rates over the past year: Hiring freezes witnessed an 81% increase year-over-year in 2023, says the Glassdoor report.

Examining employee confidence across industries reveals nuanced insights:

  • Information sector: Confidence in the information sector remained largely unchanged in January, dipping only by 0.1% to 48.2%. Despite ongoing reports of layoffs in the tech sector, the decline in sentiment may be attributed to a shift from aggressive hiring observed in 2021 and 2022.
  • Leisure and hospitality, and transportation and warehousing: These sectors experienced significant declines in January, possibly influenced by adverse weather conditions across the US, constraining travel and recreational activities.
  • Education and health services: Despite robust hiring in 2023, confidence in this sector plummeted by 1.4% month-over-month or 6.4% year-over-year, signaling lingering uncertainty among employees regarding industry stability.

Furthermore, employee confidence waned notably among mid-level employees in January 2024, slipping to 48.9%, mirroring the sentiment among entry-level counterparts at 48.8%. Ongoing layoffs targeting middle management layers as companies streamline operations and enhance efficiency have compounded pressures on mid-level managers.

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