Companies aren’t doing much hiring or firing lately, creating what economists call a “no-hire, no-fire” labor market. Data shows hiring rates among U.S. employers are at levels last seen a decade ago after the recession. Meanwhile, firing rates also remain relatively low, with December’s unemployment rate at 4.4%, according to Axios.
What’s going on? AI allows companies to handle growth without changing headcount. Rather than replacing existing workers, companies are using AI to take on new work that would have previously required additional hires. The trend is especially prevalent in customer support and engineering roles, where companies are hiring at roughly half their previous rates or close to zero in some cases.
But AI isn’t the only culprit. Other factors contributing to the frozen job market are higher interest rates and a hiring hangover from the pandemic era, particularly in tech.
Companies aren’t doing much hiring or firing lately, creating what economists call a “no-hire, no-fire” labor market. Data shows hiring rates among U.S. employers are at levels last seen a decade ago after the recession. Meanwhile, firing rates also remain relatively low, with December’s unemployment rate at 4.4%, according to Axios.
What’s going on? AI allows companies to handle growth without changing headcount. Rather than replacing existing workers, companies are using AI to take on new work that would have previously required additional hires. The trend is especially prevalent in customer support and engineering roles, where companies are hiring at roughly half their previous rates or close to zero in some cases.
But AI isn’t the only culprit. Other factors contributing to the frozen job market are higher interest rates and a hiring hangover from the pandemic era, particularly in tech.
