After increasing by 2 percent during the previous quarter, job-seeking in the U.S. declined by 1.5 percent in the third quarter of 2016, a reverse that analysts are attributing to political events that have led workers to approach the job market with caution.
A report by CEB based on surveys of 20,0000 employees around the world attributes a decline in job-seeking in Europe — and the United Kingdom in particular — to the uncertainty wrought by Brexit. The narrow vote by Brits in favor of their country leaving the European Union shocked the political establishment and the business community. Although the vote has not yet resulted in economic calamity, a number of major businesses in the U.K. have begun to move operations to other European cities.
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What has caused a decline in job-seeking in the U.S. is less clear, but the report suggests the looming presidential election and the associated uncertainty about the future direction of U.S. political leadership may have led workers to hunker down in their current jobs.
Indeed, Donald Trump's stunning victory quickly showed the presidential election has real economic impacts.
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The stock market plunged following his win but then quickly shot back up and has been steadily climbing in recent weeks, with investors betting that the president-elect will pursue a number of business-friendly policies, such as tax cuts and infrastructure spending.
They appear to similarly be betting that he will not pursue some of the promises the business community fears could be economically harmful, such as a massive immigration crackdown or a initiating a trade war with China or Mexico.
Even more concerning than a lack of job-seekers, however, is the decline in on-the-job enthusiasm CEB detects in its surveys. Levels of what CEB calls "discretionary effort" have declined over the past three quarters in North America, Australia and New Zealand.
CEB asserts the increase in employees who are "quitting in their seats" is linked to the global economic and political uncertainty. When employees are discouraged from seeking new opportunities, they are more likely to remain in a job that they don't like. And the longer they stay with an unsatisfying job, the more they disengage from work.
The solution, suggests CEB, is for employers to strive to engage their workers. That means including them in more decisions and to emphasize "conversations" with employees, rather than "communications" to them.
Brian Kropp, who leads the HR division for CEB, explained: "In an environment of constant change and disruption, leaders need to adapt to create a more inclusive environment that empowers employees."
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