As economic conditions shift across industries, the U.S. job market is showing clear signs of fragmentation. According to the new Job Seeker Nation report from Employ, desk-based job sectors are experiencing a dramatic rise in competition and application volume, while employers in frontline roles continue to struggle with talent shortages. Overall employment remains strong, but these varying degrees of trends point in deeper shifts in how different segments of the labor market are evolving — and what job seekers and employers must do to keep pace.
Job postings from desk-based worker sectors like finance, professional services, and tech has declined year over year, creating bottlenecks of qualified talent competing for a shrinking number of roles. Recent findings reveal that desk-based workers are interviewing more often than those in frontline roles. Overall, 64% of respondents reported having more than two interviews in the past year, but that number drops to 55% among fully on-site workers, compared to those who work remotely one to two days per week (77%) or split their time between the work and office (75%).
This gap may stem from both flexibility and function. Remote workers have more privacy to take interviews without being seen or heard, while on-site workers may need to take PTO just to participate. And with more volatility in desk-based industries like tech and quit rates for the private sector falling to 2.1%, according to the Bureau of Labor Statistics, this fairly recent drop in quits suggests employees are staying in roles longer, which could be due to competition and lack of work.
“This is no longer a one-size-fits-all labor market,” says Stephanie Manzelli, chief human resources officer at Employ. “We’re seeing two very different job markets emerge: one overwhelmed with applications, and another starved for talent. Businesses need to reassess and refine hiring processes to ensure they are meeting the needs of today’s dynamic candidate market, especially as we continue to see certain sectors being significantly impacted by layoffs or new college grads getting ready to graduate.”
As job seekers navigate the hiring crunch, many are turning to AI tools to gain an edge. About one-third of respondents (31%) say they’re using AI to support their job search. Desk-based worker applicants are using AI the most, especially those in software, technology, and IT (50%) and finance, insurance, and accounting (47%).
While the ways candidates use AI have shifted slightly, some trends are holding steady. Fewer respondents report using AI to write or review resumes (52%) and to generate interview questions (38%). However, AI use in other areas remains consistent: nearly half (48%) still use it to write or review cover letters, and 69% continue to rely on AI to find or match with relevant job listings.
AI has become a standard part of the desk-based worker job search, using every tool at their disposal to optimize their applications, sometimes even applying to multiple tools in a week. By contrast, AI adoption remains fairly limited in the frontline space just due to the continued use of more traditional methods of recruiting/hiring, such as referrals, job fairs, trade schools, and in-person applications.
With 66% of workers feeling burnt out from a stagnant market, where employers are cautious, and more employees are staying put at their current jobs, it’s no wonder that 82% of surveyed respondents are thinking we could see a “white-collar recession.”
This split in labor dynamics is forcing employers to reconsider hiring practices, workforce development, and the role of technology in talent acquisition. For desk-based worker employers, streamlining hiring processes, prioritizing skills-based hiring over diplomas, and ensuring accurate job descriptions are strategies to reduce applicant fatigue. For frontline employers, investing in tools such as recruitment marketing, on-the-job training, and broader talent pipelines may be key to attracting new talent.
