The job market landscape is shifting dramatically in 2024, with applications surging at a rate four times faster than job openings, according to Workday’s latest Global Workforce Report. While job requisitions grew by a modest 7%, applications skyrocketed by 31%, intensifying competition among job seekers.

Recent data by the Bureau of Labor Statistics showed that job openings plummeted to 7.7 million as of the last week of July, the lowest level since January 2021 and a significant drop of 1.1 million compared to the previous year.

As the number of available positions dwindles, the job market appears to be tightening, giving employers more leverage in hiring decisions. This power imbalance between candidates and companies has emboldened organizations to raise their standards.

“The evolving dynamics in the labor market today are allowing employers to be meticulous when it comes to new hires, amid increased hiring standards and a surplus of applicants,” Phil Willburn, vice president of people analytics at Workday, told Forbes. “We’re seeing a rebalancing of power from employees to employers.”

Research from the cloud-based software platform that helps organizations manage their human capital indicated that nearly three-quarters of business leaders report positive outcomes from increasing experience requirements.

With the majority expecting this trend to persist, job seekers face a more challenging hiring environment, while employers enjoy a wider pool of talent to choose from.

Limited Opportunities For White-Collar Workers

Although BLS’s jobs report on Friday painted a picture of a labor market that is slowly recovering, with the United States economy adding 142,000 jobs in August, white-collar job growth remains sparse. The sectors that saw the largest employment increases were construction (+34,000) and healthcare (+31,000).

Moreover, the total number of jobs added last month still falls below the average monthly gain of 202,000 over the past year.

Employers are recognizing that every new hire is crucial during a period of slower economic growth.

“This means companies are leveraging the increased competition in the job market and taking the time to prioritize high-quality candidates over filling roles quickly,” stated Willburn.

According to Workday, competition is most fierce in the communications, media and technology sectors, averaging 30 applicants for each job offer, which represents a 36% increase from 2023. These areas have been significantly impacted by layoffs in recent years, which has resulted in a substantial number of candidates seeking new employment.

Job seekers are adapting to the competitive landscape by expanding their searches beyond their primary fields. However, the strategy of industry-hopping has yielded mixed results, with many candidates finding it challenging to successfully transition across sectors.

A significant portion of tech workers (65%) have cast their nets wider, applying for positions outside their field, with 40% finding success in their cross-industry job search. Similarly, in the business services sector, a striking 70% of workers sought opportunities in different industries, yet only 40% managed to secure positions. Forty percent of finance workers explored opportunities outside their field, and saw a success rate of 30%, the Global Workforce Report revealed.

Although job seekers face a number of hurdles, the workforce has been no walk in the park for existing employees either, as many workers find themselves in a frustrating state of stagnation.

While employees are actively pursuing growth opportunities, the path to advancement within their current organizations has narrowed. Data from HiredScore, a Workday company, showed that internal hiring rates have remained flat over the past year, as employers are increasingly favoring experienced external candidates to fill positions.

This trend severely limits upward mobility for existing employees, making them feel trapped in their current roles.

“While voluntary attrition remains low across most industries, we’re seeing a noticeable uptick in high-potential employees—the people employers want to keep the most—seeking opportunities elsewhere, driven by the desire for growth and more meaningful work. We think that, because so many workers have felt stuck for so long, those who are most able to are finally making their move as hiring picked up in 2024,” said Willburn.