As 2022 comes to a close, Economists at Gusto, the people platform serving over 200,000 businesses across the country, took a look at the data and found four significant developments that shaped 2022. From the slowdown in the Technology sector – a pandemic superstar industry – to the plateau in remote work, these are the trends that marked the past year – and will shape the start of 2023.

1. The Technology sector boom is slowing after significant growth during the pandemic, recent layoffs and slowing wage growth point to a continued slowdown in the tech sector. 
2. Bonuses are shrinking – amidst economic uncertainty Gusto data shows that bonuses across industries in the professional services sector are shrinking in line with large companies including Citi and EY making cuts to employee bonuses.
3. Job growth is shifting away from the west – In 2022 so far, Charlotte, San Antonio, and Louisville top the list of cities with the highest employment growth rate while seven of the ten slowest-growing cities are located in California or Oregon.
4. Growth in remote jobs levels off – after soaring during the pandemic remote work levels have remained relatively flat from April to November of 2022.

The Technology Sector Comes Back to Earth

The first trend marking 2022 was the notable slowdown in growth in the Technology sector. Employment growth among technology companies had been above the overall average in 2021 and the start of 2022, but going into the summer of 2022, employment growth in the Technology sector came back down to earth, matching the overall average. From January to April 2022, employment growth in Technology averaged 2.0%, compared to 1.4% growth across all companies. From May through October, however, headcount in Tech grew by 0.9% – matching the overall average.

Similarly, through 2021 and the start of 2022, we had seen termination rates at technology companies well below the economy-wide average: from January to April, the involuntary termination rate for tech averaged 0.8%, compared to 1.1% overall. But in the second half of 2022, the rates of involuntary terminations have risen to match other industries, with both Tech and the overall average sitting at 1.2%.

Professional Services Firms Shrink Bonuses

Across all industries, 2022 saw little movement in how companies handed out bonuses. Figure 4 displays the average size of a bonus given out by all businesses on Gusto’s platform along with the percent of employees receiving a bonus in each month. Last month, for instance, the share of employees receiving a bonus has remained stable (6.2% this November vs. 5.9% last year), but we have seen the average size drop by 7% ($191 in November 2022 compared to $208 last year).

Figure 4: Average Size of Bonus & Percent of Employees Receiving a Bonus

There are, however, significant differences in how companies are handing out bonuses ahead of the end of 2022 across different sectors, as shown in Table 1. Firms in the Goods-Producing/Logistics and the Personal Services sectors – such as Transportation, Warehousing, Retail, and Food & Beverage – are still handing out bonuses in similar sizes to last year, as they continue to navigate a tight labor market and strong consumer demand. As Professional Services firms enter a period of slower growth, end-of-year bonuses are shaping up to be significantly smaller than last year. In November 2022, the average size of a bonus in a Professional Services firm was $438, 16% lower than the $520 average last November. Within Professional Services, the largest decreases have been seen in Finance (-31%), Communications (-27%), Real Estate (-26%), and Technology (-19%).

Table 1: Average Bonus Sizes, by Sector, November 2021 and 2022

Table 2: Average Bonus Sizes in Professional Services Industries 

Jobs Growth Shifts Away From the West in 2022

Taking a look at employment growth across the 50 largest Metro Areas in 2022 (January through November), we can see that there’s a large divide in areas that experienced faster or slower employment growth throughout the year. Across all firms, employment grew by 11.9% through the first 11 months of the year. Table 4 presents the Top 10 fastest-growing Metro Areas and the 10 slowest growing, among the 50 largest cities. Among the top 10 fastest-growing metros, there are eight in the East or Midwest, with Charlotte topping the list at 16% employment growth. On the other hand, seven of the ten slowest-growing cities were located in California or Oregon. This shift is likely driven foremost by the slowdown in growth in Professional Services, and particularly Technology firms, located in the West, along with faster growth in Transportation, Warehousing, and Manufacturing companies located on the East Coast and the Midwest.

Table 4: Top & Bottom 10 Fastest-Growing Metro Areas, January-November 2022 (%)

Growth in Remote Jobs Levels Off

Finally, the share of remote workers is beginning to stabilize after two years of accelerated growth. From March 2021 to March 2022 of this year the share of remote work increased from 11% to 16%, however from April through November of this year the share of remote work was nearly flat. While it is still too early to know for sure what is causing remote work levels to stabilize there are likely many factors at play. As we enter the new year we will keep a close eye on how remote work trends evolve. 

This year Gusto released a new Remote Work Data Tracker to help people across the country better understand how the remote work transformation is unfolding in real time. The data can be split by age, gender, industry, state, and metro area, you can dive into the insights here. 

Remote work has forever changed the way that employees and employers interact. In the last two years many new business and societal implications of remote work have become evident. Remote work increases hiring opportunities for workers living outside of major metropolitan areas. Remote work also creates new challenges and opportunities for HR leaders, employees, and business owners. 

We are still at the beginning of the remote work transformation, as trends continue to evolve in 2023 we will continue researching this topic.