With the US federal holiday and shorted work week, I wasn’t sure I would start off with market conditions… and then I saw how much data there was.
The National Federation of Independent Business reported a rise in small business optimism, with its Optimism Index hitting 105.1 in December, the highest since October 2018. This increase reflects greater confidence among business owners, particularly after the recent election. Despite this, inflation and labor quality remain major concerns, with 20% and 19% citing these issues, respectively. Additionally, 24% of owners plan to raise compensation, down from previous months.
A recent survey by Channelnomics shows most U.S. channel partners are optimistic about Donald Trump’s potential presidency, believing his tariffs will boost business growth in 2025. 54% expect positive impacts from the tariffs, while 21% foresee negative effects. The upcoming Channelnomics Partner Confidence Index also indicates that 91% of partners expect revenue growth and 88% forecast increased profits for the year.
The IT job market contracted for the second straight year, with nearly 71,000 IT jobs lost over two years, according to Janco Associates. In 2024, 22,300 jobs were cut, down from 48,600 in 2023. The rise of AI has reduced traditional IT roles while creating demand for new positions like data architects and AI developers. CompTIA reports a drop in tech employment, with the unemployment rate at 2%, the lowest since November 2023. Despite fewer layoffs, Janco warns of continued job market shrinkage into 2025, urging job seekers to acquire skills in AI or cybersecurity.
A World Economic Forum report reveals AI is reshaping the job market, creating 11 million jobs while displacing 9 million. By 2030, executives believe AI will significantly alter business operations. The demand for tech-based roles is rising, alongside traditional frontline positions. However, 39% of current skills may become outdated soon, stressing the need for continuous learning.
In a recent Gallup survey, employee engagement hit a ten-year low, with only 39% feeling cared for at work and just 30% feeling encouraged in their development. This decline aligns with slow hiring and mandatory office returns.
Why do we care?
There is a lot of business optimism out there, with opposing thoughts on labor. While IT layoffs are slowing, there is a turbulence under the surface here to be worried about. Traditional IT roles are reducing, and AI and automation are impacting those roles. Mix in a drop in employee engagement to make things interesting.
It isn’t new to say that focusing on people is key. That said, the data highlights that guiding staff here will be critically important to business success.