Headline employment figures tell us the labor market isn’t rapidly growing or contracting. But when we look beyond the average, company size and industry paint a much clearer picture.
Ross Brooks
Senior Research Writer
Workday
Federal labor market data tells one story: hiring is flat. Companies are in a holding pattern, not rapidly growing or contracting. That is a fair summary of the market as a whole. It is also almost no company’s actual experience.
According to Workday’s global research, more employers reduced employee headcount than added it in the first half of 2026. But the story becomes more clear when we look beyond the average at companies of different size and industry.
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Break the same data apart by company size and a clear gradient appears. Among the smallest employers—those with 250 to 499 employees—58% grew their workforce. Among the largest, those with at least 30,000 employees, only around 43% did. The bigger the company, the less it grew.
The line sitting at 50% matters. Above it, more employers grew than shrank; below it, the balance tips the other way. The smallest employers sat comfortably above that line, mid-sized employers sat right around it, and the largest employers sat clearly below it. A single national average, describing "the labor market," would land somewhere in the middle—and wouldn’t accurately describe either group.
Importantly, this is not just a reflection of large and small companies happening to operate in different industries. When we compare employers of different sizes within the same sectors, the same pattern generally holds: as company size increases, the balance tends to shift toward contraction. The size effect is real, not a by-product of industry mix.
If the growth story varies by size, the shrinking story is even more concentrated than a headline number can convey.
The clearest way to see this is by looking at where the losses actually sat. The very largest organizations—those with 100,000 or more employees—account for roughly 74% of the net headcount decline, despite representing just 26% of employees. In other words, a small number of the biggest employers drove the overwhelming majority of the cuts, while the rest of the market looked very different.
That makes the concentration point visible: the aggregate decline was not spread evenly across the market. It was overwhelmingly driven by the largest employers.
Much of this reflects large-scale restructuring at established companies, even as smaller organizations continued to hire. When the national number dips, it is tempting to picture broad-based, across-the-board cuts. The reality here looks more like a few very big movements driving the average.
So far this is a story about hiring, but company size also shapes what happens inside an organization.
Consider internal mobility. The majority of employers saw a drop in internal mobility year-over-year. Across our panel, roughly 10% of internal candidates were approved for new roles within 60 days, remaining stable since last July.
But that average splits sharply by company size. At the largest employers, the conversion rate was around 6%; at mid-sized organizations, it was closer to 11–12%. This suggests that while the entire internal labor market has tightened, the largest companies are feeling the effects of a frozen workforce most acutely.
Company size is not the only source of variation. Industry adds another layer entirely. Financial services and healthcare grew their workforces, while retail, education, nonprofit and transportation contracted. Crucially, these sectors barely moved together: the market wasn't rising or falling as one, it was rotating, with some industries expanding while others pulled back.
The pattern is consistent with what's happening inside those industries. Healthcare is drawing on durable, hard-to-automate demand—clinical roles dominate its hiring—and its growth is corroborated by government data showing it as the economy's top job creator. Financial services is growing through transformation as much as expansion, hiring heavily for applied AI, risk and compliance even as it trims traditional layers. The contracting sectors are largely those where automation is displacing work fastest.
Retention, by contrast, is where the market moves as one. Two-year retention slipped in all 12 sectors, including sectors that added headcount. The declines were modest, representing a slow drift rather than a cliff, with little variation by size or industry.
While this trend may seem nonconsequential, it is promising that we are not seeing another Great Resignation. Voluntary turnover stayed broadly flat. Employees are not walking out the door in a wave. They are simply staying a little less long, and moving less once they are there.
A market can be stable in aggregate and fragmented underneath. Headcount, hiring and internal opportunity fragment sharply by company size and industry, but how long people stay erodes gently and almost identically everywhere. Both are true at once.
The data tells a layered story overshadowed by labor market headlines. The biggest employers grew the least and accounted for nearly all of the decline, even as smaller companies kept hiring. So the first question for any leader isn't "how is the labor market doing?" It's "how is the labor market doing for a company like mine?"
If you run a large organization, the national recovery is probably not your experience: you're more likely flat or contracting. If you run a smaller or mid-sized company, you're where the growth actually is, hiring with more candidates per opening than you've seen in years. This is a great opportunity to source new talent—the kind that thrives when AI handles the tasks.
There's a second signal that matters more the larger you are. Hiring has slowed, but so has internal mobility: people are staying, yet moving up and across less than before. At the biggest employers, the odds of landing an internal move are measurably lower.
When external hiring is quiet and people are staying put, internal opportunity is one of levers you can control. But, the data shows this lever has started to rust. Internal mobility fell year over year across the majority of employers, and the decline reaches across every sector and company size.
This is more pronounced within the largest employers, where internal approval rates were lower and continue to fall. This means large employers aren't sitting on an unused internal mobility lever; they're watching the lever corrode. The internal labor market is tightening alongside the external one—so the best retention strategies will treat internal movement as something to actively rebuild, boosting engagement and making career paths visible to build trust and resilience for the AI era.
The takeaway is clear: benchmark against companies your own size and sector, not a national average that describes almost no one. By doing so, you’ll see where you have an opportunity to adapt, not simply watch and wait.
The data in this story stems from Workday’s Global Workforce Report, launching October 1. The report provides a deeper look at the forces reshaping headcount, hiring, retention, and movement inside organizations.
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Beneath a seemingly stable labor market, jobs are changing fast. In job listings, demand for basic AI skills has dropped 25% while applied AI skills are up 51%. A majority (65%) of employees are confident they can learn new skills, and those who can adapt to change are pulling ahead.