At Lightcast, our mission is to unlock mobility and opportunity for every employee, student, and community around the world.
I’m Bledi Taska, and I lead a team of economists and data scientists who look every day at our billions of data points in order to find meaningful insights and human stories. We believe those insights and stories can drive change, and every week, I’ll be sharing some of the highlights from our research.
Welcome to the Letter from the Chief Economist.
A Window Into Wages
Starting bonuses have declined since the start of the year, according to Lightcast data, as concerns over inflation and a potential recession have made their way into the job market.
Mentions of benefits and other jobseeker advantages in job postings are often correlated with the tightness of the labor market—employers offer more when workers are scarce, and fewer benefits when competition for talent tapers off. The decrease in postings offering starting bonuses is an example of this.
But some benefits are on their way to becoming permanent. Policymakers and employers alike are moving toward making pay transparency a standard part of the job application process.
Salary transparency efforts can significantly improve pay equity and level the playing field for all kinds of workers, so many policymakers have moved to make those disclosures a permanent part of the labor market. New York City and the state of Colorado have both passed laws requiring postings to list salary ranges, and lawmakers in California, Massachusetts, South Carolina, and the European Union are considering similar legislation.
Earlier this month, Microsoft announced that by January 2023, all of its US job postings will disclose salary ranges. Last year, our research with The Conference Board showed that the tight labor market in the wake of Covid-19 had led to an significant increase in job postings with salary transparency, as well as other benefits like training or signing bonuses.
Microsoft’s decision matters because it’s such a major force in the tech world, with over 100,000 US employees. In research I published with Ellora Derenoncourt, Clemens Noelke, and David Weil at the National Bureau of Economic Research, we found that an entire industry can feel the impact when one major employer institutes a new wage policy.
Right now, only the Colorado law has gone into effect, and our data show the impact on its job postings has been dramatic. When policies from the likes of Microsoft and laws in New York and elsewhere follow suit, the increase will likely be just as steep.
A survey from Lightcast client and collaborator The Conference Board showed that over 60% of CEOs surveyed around the world anticipate a recession before the end of 2023, with 15% saying their region is already in a recession.
Looking past the anticipated recession, the executives surveyed indicated they would continue to invest in technology and talent as the focus of their long-term growth strategies, and this includes investing in reskilling and upskilling their existing workforce to keep in line with changing business needs. However, many also said they planned to accelerate automation and recruit more contract workers, reducing their need for full-time employees.
In The Papers
Keeping with the theme of CEOs, the outside research I want to highlight this week comes from my co-authors and collaborators, Stephen Hansen, Raffaella Sadun and Joe Fuller, and Tejas Ramdas: “The Demand for Executive Skills,” available from SSRN or the Harvard Business Review.
While the importance of a good CEO is clear, it’s been surprisingly difficult to determine what qualities determine their success, and that’s what this research seeks to address.
Using a unique set of CEO postings from an executive search firm, and combining that with data from Lightcast, the authors show there has been an increase in demand for CEOs with social skills in larger and more information intensive organizations. Companies are no longer looking for CEOs with industry expertise and financial savviness. Instead, they are looking for leaders who are adept communicators, relationship builders, and people-oriented problem solvers.
The implications of those findings go beyond executives themselves; they also show that the way companies do business has changed. Large and complex organizations need clarity in communication, and the research shows that companies think this starts at the top.
Thanks for reading. Until next week,
Chief Economist, Lightcast