LinkedIn’s Chief Economist Shares Her Take on Today’s Economy
Speaking at the first in-person Talent Connect since the pandemic, LinkedIn’s chief economist Karin Kimbrough started by acknowledging what talent leaders are all too familiar with: “I’m here today because we’re in a moment of uncertainty,” Karin said. “The macro picture is murky, and there’s been a lot of change. I don’t need to tell you — you’ve all been living this for the last two-and-a-half years, right? It’s been a rollercoaster.”
From the start of the pandemic to the heyday of the Great Reshuffle to today’s mounting economic uncertainty, talent professionals have been forced to grapple with a dizzying number of twists and turns.
“I hope to help make some sense of all these developments in the economy and the labor market,” said Karin, sharing insights from LinkedIn data, based on the actions of 870 million members and nearly 60 million companies.
Where we are today: navigating global uncertainty
Where are we now? It’s a simple question with a not-so-simple answer, due to recent mixed economic signals.
In the U.S., for example, growth has slowed down through the first half of the year, with a mild recession seeming likely in 2023. At the same time, the unemployment rate recently reached new lows.
“So overall, a mixed picture so far: slowing growth, but a still-tight labor market,” Karin said. “And it’s a similar picture in many other countries around the globe: record low unemployment, record high inflation, rising rates, and slowing growth.”
“The global economy is coming back down to earth after a meteoric rise last year,” Karin added. While Asia-Pacific’s projected plateau stands as an outlier, growth in many regions in 2022 is expected to be less than half the growth seen the previous year.
“It really does feel like what some people would call a hangover,” Karin said, “and what economists would call a globalized economic slump.”
Despite that outlook, it’s not all doom and gloom. “The bottom is not dropping out of the economy,” Karin said. There are mixed signals: low unemployment that will probably rise; high inflation will probably fall — it’s all in flux, but that’s normal for a turn in the business cycle. She noted that recessions are part of a normal business cycle, that they tend to happen every six to 10 years, and that on average they only last about nine months.
Of course, the last few years have felt anything but “normal,” and talent professionals find themselves facing more uncertainty than ever before.
Drawing from her time as an economist at the New York Federal Reserve during the Great Recession of 2008, Karin offered three tips to help talent professionals navigate economic uncertainty:
First, stay adaptive.
You’ll need to be able to adapt quickly, staying cognizant of your environment and your exposure.
Second, get informed.
You’ll need to use whatever data you have at hand to make an informed decision.
Finally, be decisive.
You’ll rarely ever have the full picture, but can’t let analysis paralysis stop you from taking action.
What we see now: trends fading, trends staying
Karin shared that while the talent market has loosened slightly since 2021, it has remained remarkably tight relative to prepandemic rates.
In the U.S., for example, there’s about one job opening per every applicant on the platform, a historically high ratio. “Job seekers are looking with a bit more intensity than before,” Karin said, adding that the average number of applications a seeker makes has increased by nearly 20% in the past year.
She went on to lay out three trends in the labor market — two of which she expects to endure, and one trend she expects to fade.
Enduring trend: skills matter more than ever
The skill sets that jobs call for are increasingly changing. As LinkedIn’s CEO Ryan Roslansky is fond of saying, “Even if you aren’t changing jobs, your job is changing on you.” Skills-based hiring practices are on the rise — and for good reason, as they help employers build talent pipelines (by up to 10x!) and help job seekers find jobs faster.
Enduring trend: internal mobility is essential
LinkedIn’s data suggests that internal mobility can be an essential retention strategy. Companies that excel at internal mobility tend to retain employees for nearly 2x as long as companies that struggle with internal mobility. Career advancement has also emerged as a key priority for job seekers, giving companies on top of this trend an edge in both retaining and recruiting talent.
Fading trend: workers abandoning big cities
“We saw waves of talent shift away from big cities just as the pandemic hit,” Karin said. “But we see this trend has partially reversed.” She cited LinkedIn data showing that U.S. cities like San Francisco, New York, and Seattle all saw large increases in net talent inflows over the past year (roughly 70%, 40%, and 20%, respectively). Since June, there’s also been an acceleration in workers moving back to cities in France, Germany, Italy, Spain, and Australia.
Where we’re going: lessons for the future of work
Karin gave talent professionals three key concepts to future-proof their approach to talent and embrace the future of work: flexible work, upskilling opportunities, and equity.
Flexibility that goes beyond location
The rise of remote work has been one of the clearest changes over the past few years — and while remote job postings are beginning to fall, interest in remote job posts remains high, a disconnect that creates tension between what employers and employees want.
But flexible work means so much more than rethinking the workplace: It’s also about rethinking the workday and workweek. Flexible schedules will continue to be an important tool for workers seeking work-life balance and for employers facing talent shortages. Flexible hours and four-day workweeks are getting serious consideration.
Upskilling opportunities that support advancement and retention
With skill requirements changing faster and faster, candidates value the opportunity to learn on the job. “They know technology is changing and they want to keep up,” Karin said. “It can sound corny to talk about ‘lifelong learning,’ but that’s what we need to do to stay current.”
More than 90% of employees want managers to inspire learning. Despite that, only half say they actually feel encouraged to learn new skills.
This lack of engagement may easily lead to lower retention: Employees who feel their skills are not being put to good use in their current job are 10x more likely to look for a new job.
“There’s a gap there,” Karin said, between what employees want and how their companies support them. “We call it a gap, but really, that’s an opportunity.”
Equity that resists retrenchment
“The pandemic reminded us that an equitable future is not assured,” Karin said. “We must work for it.”
Those with the least access to economic opportunity often suffer the most during economic downturns, Karin noted. Now, in light of renewed uncertainty, “how do we ensure that we don’t leave people behind?” In the U.S., for example, just two months of the pandemic erased five years of gains in closing the Black-white unemployment gap.
“We can’t go back,” Karin said. “An emphasis on skills and a focus on flexibility can keep us moving forward.” Focusing on skills over pedigree can dramatically expand economic opportunity, and LinkedIn data suggests remote work is a major attraction to underrepresented groups. In the past year, there’s been a 16% and a 17% increase in the share of Hispanic and Black applicants for remote jobs, respectively, with women primarily driving increased interest across both groups.
“By putting skills first and providing flexibility, continuous upskilling and mobility,” Karin said, “we can expand opportunity and ensure a more equitable future of work.”
Final thoughts
Karin began working at LinkedIn in January 2020. Within two months the world of work had forever changed.
Now, nearly three years later, the world may be poised to change again.
“With this uncertainty comes opportunity,” Karin says. “An opportunity to navigate it together and come out better on the other side.”
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