The Job Market Froze. Your People Noticed.
U.S. employers added 29,000 jobs in September, about a third of what economists expected, and unemployment edged up to 4.2%. Announced layoffs, meanwhile, are running 39% below last year. Companies have stopped adding people, and they've mostly stopped letting them go.
Small numbers like this are probably the new normal. With baby boomers retiring and immigration tight, the workforce is barely growing; RSM estimates it now takes only about 35,000 new jobs a month to hold unemployment steady. Add trade disputes, AI, inflation and higher borrowing costs, and the hesitancy on both sides of the hiring table makes sense. One soft month isn't the warning sign. Hiring that stays flat after relief arrives would be. The biggest relief on offer is outside any company's control: a negotiated reopening of the Strait of Hormuz would bring energy costs down and take pressure off inflation and rates. Leaders can't plan on it.
Is AI behind the shrinking white-collar payrolls? Partly. It is the most-cited reason for announced job cuts this year, at roughly one in five, with market and economic conditions close behind. But adoption is patchier than the headlines suggest. In finance and tech, salaried people are the largest cost line, and when leaders get nervous, the largest line gets squeezed first.
Employees know that. So in a market where nobody is quitting and you're not hiring, a COO's first move isn't a reorg:
Take a pulse on safety. Find out how secure people feel before asking anything else of them.
Ask about purpose. Do they believe their work adds value and moves the mission forward?
Recognize beyond pay. Wages are up 3.0% while inflation runs at 3.4%, so raises alone won't carry it. Growth opportunities, time off and visible appreciation count.
Then redesign and redeploy. Match roles to what the organization needs and what individuals want to become.
Low turnover can look like loyalty. Gallup put U.S. employee engagement at 31% in 2025, down from 36% in 2020. The organizations that earn real commitment now will be ready for a long freeze, and for the thaw.
People who stay because they have nowhere else to go aren't loyal. They're waiting.
Thinking about how to get more from the team you already have? We're glad to talk it through: eightygroupllc.com/contact
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