The study was conducted by the University of Phoenix Career Institute®, part of the University’s College of Doctoral Studies, which examines workforce dynamics to inform solutions that help break down barriers to career advancement.
Today the University of Phoenix Career Institute® released its 2024 Career Optimism Index®, a comprehensive study examining the state of American workers’ career trajectories and sentiments about the future of their job and career opportunities. This year’s Index, the fourth consecutive year it has been fielded, reveals that workers and employers are facing a critical moment of talent stagnation in the workplace .
More than half (53%) of Americans report feeling easily replaceable in their job position and 64% of workers say their company does not offer opportunities for internal mobility. Meanwhile, 44% of employers say their top challenge to finding talent in the past year is a lack of well-qualified applicants. These findings indicate that employers are not looking internally and, thus, overlooking the potential to upskill and elevate their existing workforce to solve business needs, hindering talent progression for both workers and organizations.
What The Workforce is Saying
- The last year of layoffs, strikes, and economic uncertainty has caused tension for workers: 42% reportedly worry about losing their job due to a bad economy and 38% of workers agree that their salary or wage has not increased at the same rate as inflation. Additionally, Americans have a negative outlook on their financial security, with 42% saying they can afford less now than they could two years ago.
- More than half (53%) of Americans say they are easily replaceable – a third of workers don’t feel recognized by their company’s leadership for their contributions (30%) and 27% do not feel empowered in their current job.
- There is a wide disconnect between employer perceptions and worker realities on opportunities for advancement: While 62% of employers say their company currently offers opportunities for internal mobility, only 36% of workers agree. Additionally, 90% of employers say their company provides workers with opportunities for career development, but only 69% of workers agree this is their experience.
- However, workers do see a need to continue acquiring skills and they highly value employer investment in skilling: 74% say they must continuing learning new skills to stay ahead in their career and most say if their company did more to upskill (66%) or reskill (65%) them, and gave more opportunities to apply new skills (69%), they would be more likely to stay throughout their career.
- Yet, with a lack of career support, workers are feeling stagnant: Workers are more than twice as likely to feel like they do not have the ability to advance in their career at their current job when their company does not currently provide a mentorship program (49% vs. 18%), skills development opportunities (55% vs. 23%), internal mobility (55% vs. 19%), or career path guidelines (53% vs. 19%).
- Despite stagnation, workers continue to feel optimistic about their abilities—a belief in themselves to propel the future of their careers— which is an opportunity for employers to capitalize on that optimism: 78% of Americans are hopeful about the future of their career and 72% feel in control of their professional future.
What Employers are Saying
- Employers today are making fewer hires, so when they are recruiting, they are seeking the perfect match for the skills they require. However, they are struggling to find the right fit externally:
- 62% say their company has experienced slowed or declining hiring over the past year through hiring freezes, layoffs, restructuring, etc. Only 19% say their company expects to hire 51+ people over the next year (vs. 25% in 2023).
- 51% of employers report that in the past year, it took one month or more to fill an empty position at their company.
- Employers report the top challenge to finding talent in the past year was a lack of well-qualified external applicants (44%).
“As U.S. companies cut jobs and reduce expenses, they are fixating on the next best thing available to them outside of their organization to drive growth. This perspective is perpetuating a stagnant talent environment,” said John Woods, Provost and Chief Academic Officer, University of Phoenix. “Our Career Optimism Index® illustrates that business leaders are overlooking the immense potential of the workforce within their own organizations, who remain resilient and optimistic despite the macro environment. These workers possess a significant desire to advance and acquire the skillsets employers are seeking to fortify their businesses for the future.”
What Employers Can Do
By providing clearer and more flexible opportunities for their existing workforce to advance internally, employers have the opportunity develop the dynamic talent they need from within, serving business objectives and workers’ career ambitions.
- Close Gaps in Awareness Around Internal Growth Opportunities: While there is a vast disconnect between employer perceptions and worker realities regarding opportunities for advancement, workers who do have awareness of career support options report high levels of satisfaction with them.
- This is reflected across opportunities for internal mobility (82%), conversations with their manager/boss about their career path (86%), visibility with upper management/leadership (88%), networking opportunities (86%), and help/mentoring in their careers (87%).
- Create a More Personalized Workplace Experience: Workers benefit from enhanced job performance and career advancement when their workplace experience is highly tailored to the ways they want to work and learn.
- 51% of Americans need support in setting career goals.
- 40% of Americans would prefer the flexibility of learning on their own without a course (e.g., reading a book about skills, personal projects, videos/tutorials on YouTube) when it comes to getting the skills they need for their career.
- Workers who do have the flexibility to choose what they work on at their job are more satisfied at their current job than those who don’t (86% vs. 66%).
- 78% of workers feel they are more productive at their job when they have more flexibility.
The Value of Optimism
What’s more, the addition of statistical modeling to this year’s report reveals that if employers don’t adjust to solve talent stagnation, they’ll miss out on significant business savings: up to $1.35T across businesses and organizations in the U.S.
- By investing in low-cost, high-impact tools and resources for employees to achieve their career goals including career pathing, skilling, and mentorship, employers can save up to $6,521 through increased productivity, $916 through decreased turnover, and $616 through decreased healthcare costs per employee per year.
- Workers can similarly add up to $5,270 to their annual salary by investing in their own career pathing, skilling, and mentorship.
Housed within the University’s College of Doctoral Studies, the University of Phoenix Career Institute® conducts research to inform problem-solving, and partners with leading organizations such as Jobs for the Future (JFF) to break down systemic barriers that Americans face in their careers. The Institute has committed to fielding the Career Optimism Index® study every year, sharing the results broadly to help inform societal solutions to career advancement and workplace equity, including a recent partnership with Motherly to study the unique career support required to uplift lower-income working mothers and ongoing work with Give An Hour to breakdown workplace mental health challenges through the creation of a workplace mental health toolkit.
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