Is the Talent War Really Over? 5 Labour Market Myths, Busted

Turnover is down, productivity is up, and the competitive hiring frenzy that marked the Great Resignation era feels quaint in today's low-hire, low-fire environment. But don't be too quick to exhale a sigh of relief: Organizations that mistake correlation for causation could be setting themselves up to fail in a still-uncertain economic environment. 

The unemployment rate has slowly trended upward without other indications of a recession. Meanwhile, top-line growth and ground-level sentiments are still pulling in opposite directions. 

So what's really going on with the economic picture? 

The truth of the situation depends largely on where you sit (both sector and locale). To help employers look beyond the headlines and make sense of conflicting economic signals, Indeed Chief Economist Svenja Gudell unpacks five pervasive labour market myths and what they reveal about the road ahead.

5 labour market myths employers shouldn't believe

Myth #1: A low quits rate means your employees are happy

The reality 

Workers are scared to change jobs in an uncertain market. It's a frozen market on both sides of the hiring equation.

Fewer job openings and smaller wage bumps aren't exactly great incentives for the already-employed to make a move. Don't make assumptions about employee sentiment without hard proof. Your organization's engagement data can offer some insight into your workforce's collective headspace.

Worth considering

Turn your focus toward employee retention. Listen to what your employees say they actually want. Then, find opportunities to invest in your workforce, whether through learning and development, internal mobility, or workplace flexibility. 

🤔 Plot twist: A recent study from The Conference Board shows that job satisfaction rates in the U.S. have actually hit a record high. But experts think it likely reflects most workers' relief to have a job at all in an uncertain economy, as opposed to true happiness with their jobs. Unsurprisingly, satisfaction scores also differ among genders and income brackets.

Myth #2: The talent war is over

The reality

The hiring market has cooled overall, but pockets of high activity remain, with hiring varying considerably across both industry and location. 

Svenja says, "There's a lot of amazing talent out there right now, and hiring's not as frenzied. Employers can take time to really figure out what skills they want to hire for. You may not have to pay as much of a premium or face as much competition for top talent as before."

For example, where there's lots of tech talent sitting on the sidelines, demand for talent in the healthcare industry remains strong. Meanwhile, the demand for workers varies considerably based on where you're located, regardless of population growth. In either case, employers who know where to look are likely to find advantages in a cooling labour market. 

Worth considering 

While the pressure is off to snap up hires wherever and whenever you can, don't take your foot off the gas completely. Use this slowdown to take a more deliberate, proactive workplace-planning approach. Consider how you can source and attract top candidates from industries and geographic regions with greater talent availability.

Myth #3: AI is going to take everyone's jobs 

The reality

Job creation persists, most notably in sectors like software development and HR that are heavily impacted by AI. Everyone is still figuring out what AI can and can't do for them. 

In short, AI has and will continue to impact all jobs to some degree, but the extent of that impact depends heavily on the industry, role, and the organization's adaptability. AI isn't wiping out all jobs overnight, but the opposing narrative that "AI is all hype" doesn't exactly ring true, either. The truth lies somewhere in the middle. 

Worth considering 

Don't rely on any one metric, like job growth or productivity figures, as the key indicator of AI's impact on the labour market. Instead, look more holistically at how those stats in your sector correlate with three key market levers: layoffs, wages vs. inflation growth, and consumer spending. 

Myth #4: Entry-level roles no longer exist

The reality

The nature of entry-level roles is evolving with AI, but the need for less-senior talent hasn't completely disappeared. Workflows, job functions, and businesses all still need humans in the loop at every level. 

Svenja says, "AI is one of the biggest work experiments we've seen in recent times. We're exploring new tools, and we're figuring out the spaces where it's the most useful. Whole processes will have to be redesigned to take into consideration how AI can actually empower someone in a particular job."

Entry-level roles are among the most impacted anytime the labour market cools. And sure, AI may tilt some role requirements toward more-senior talent, but it doesn't erase the need for basic training. AI also can't fully replace human judgment—a skill that's honed through on-the-job experience. 

Worth considering

Pay attention, keep learning, and prioritize adaptability. Determine the most important skills the various roles and functions in your workforce need to stay agile as AI continues to transform how we work. Skills-based hiring can be especially valuable when technology can automate more basic tasks.

Myth #5: Higher productivity means your workforce is thriving

The reality

Employers are asking workers to do more with less—and it's unsustainable. Despite overall workforce shrinkage, workers are reporting higher outputs with the same or even fewer hours worked—the signature of a utilization squeeze, Gudell says. 

While we may be seeing the first green shoots of AI-driven efficiency, we're also seeing organizations push their workforces harder through RTO mandates and stricter policies, regardless of the cost. While productivity numbers might look elevated in the interim, it's not likely to last if your workforce is spread too thin. 

Worth considering

Know the limits of how far you can stretch your workforce. While productivity gains may look great on paper in the short term, they can mask burnout and attrition in the long run. Instead, reprioritize your workers' humanity and lived experience. Pair your output metrics with sentiment data from regular engagement surveys, and use what they're saying to meaningfully improve the employee experience. 

✅ Three questions to ask: Get ahead of workforce burnout before it becomes a retention problem with the right questions in worker surveys and one-on-ones.Is your current workload sustainable over the next six months?Where are you spending time on work that feels low-value?What else do you need to do your best work right now?

Don't mistake calm for clarity

It's all too easy to be lulled into a false sense of security by rosy top-line numbers when the economy is sending mixed signals. But remember that headline data and lived reality don't always align, and your workforce's humanity should always come first. 

It's important for employers to remain steadfast in their workforce planning and look proactively at their workforce's specific needs in these quieter moments. This frozen-in-time labour market will eventually thaw, and the employers who seize this opportunity to truly look at their individual workforce needs during this period will set themselves up for smoother sailing when it does. 

Check out the Indeed for Business YouTube page for practical hiring guidance, thought leadership, and real employer success stories from Indeed experts. And subscribe to the Indeed Hiring Lab newsletter to receive the latest insights on hiring and the economy straight to your inbox.

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