Weekly Economic & Business Outlook

Last week, the Federal Trade Commission (FTC) voted to ban most noncompete agreements, generally defined as a contract that prohibits employees from competing against their employer for a period of time after their employment has expired. While the legalities of this ban remain contested, the implications of policymaking on this issue are quite clear.

The FTC projected its ban on noncompete agreements to yield an increase of at least 17,000 patents and 8,500 startups per year. But what about individual workers? According to estimates from the Government Accountability Office (GAO) 18% of private-sector workers were subject to noncompete agreements in 2022. This means a talent pool of approximately 27 million individuals just gained increased freedom to seek new employment opportunities, providing an adrenaline rush of labor churn critical for the staffing industry. Academic research estimates that nearly 11% of workers are presently inhibited by noncompete agreements and would be open to leaving their current position if legally permissible.

Biennial data from the Federal Reserve provides greater insight into this demographic. Sectors including the Management of Companies and Enterprises, Financial Services as well as Professional, Scientific and Technical Services currently hold the largest portion of workers subject to noncompete agreements. Similarly, workers subject to noncompete agreements are more likely to hold at least a bachelor’s degree and earn more than $100,000 per year, reflecting their likely propensity to garner high demand from employers if available within the labor market. Although the sustainability of this ban remains in limbo, its enactment does, for the time being, provide a unique opportunity for staffing firms and their clients.

What’s the Status of Remote Work in 2024?

Remote work has been on a rollercoaster ride since 2019. After exploding during the pandemic, the prevalence of teleworking has gradually normalized as employers attempt to bring teams back into the office, and local government officials seek to revive now-dormant business districts. However, researchers expect remote work to remain at elevated levels compared to the prepandemic days.

However, telework is not an appropriate option for all roles, nor is it universally preferred by potential workers. In fact, a recent ASA Workforce Monitor survey found a plurality of U.S. adults would prefer a hybrid arrangement (39%), compared to 32% who would prefer fully remote and 29% who would prefer fully in-person work. The youngest cohort in the labor force, Gen Z, is least interested in remote work ; 35% of such workers expressed a preference for full, in-person work compared to 26% who opted for a fully remote arrangement.

For staffing firms, the rise in remote work can complicate conversations with candidates and clients. Here are some takeaways that may help:

• Some form of remote work is likely here to stay. Clients should be aware that hybrid arrangements in particular are unlikely to dwindle back to prepandemic levels.
• Not all workers want a fully remote arrangement. Such an arrangement may not be necessity, particularly for clients in more talent-rich labor markets. Staffing professionals should pay attention to what candidates are saying in their markets and advise clients accordingly.
• There’s more to flexibility than remote work. Schedule flexibility can be another possible perk in situations where remote work is not an option.