For the first time in recent memory, we are experiencing a simultaneous softening of the economy and significant labor scarcity. With the consumer price index rising at twice the rate as hourly earnings, potential employees are seeking stability – but not necessarily through employers. More people are willing to dip into their savings and stay unemployed longer in order to find the right job.
What does this situation mean for employers?
hrQ Corporate Vice President Brian Wilkerson warned employers in his recent 2022 Q2 Economic Insight Webinar to not be fooled by the current economic milieu; we should not expect rising inflation and declining consumer spending to resolve labor challenges. Whether or not we are technically in an economic recession, he suggested that organizations use the current environment as an opportunity to reassess and revamp labor strategies in order to attract and retain talent and meet operational needs.
“The truth is we are going to continue to see declines in spending and challenges in the labor force. That’s unlike how most companies think about recessions and recession planning, Mr. Wilkerson said. “I’ve heard people say in the past three months, ‘I’m not too worried because if we go into a downturn, salaries are going to go down, and we’re going to be able to get people again.’ Don’t believe that.”
Instead, he advised organizations to prepare for an economic downturn by taking the following steps:
Ultimately, opportunity abounds, even in this current economic situation, Mr. Wilkerson said. We were due for a reexamination of labor strategy, and, now, organizations have the chance to reconfigure their workforces in ways that are better for them and better for people.
Now is the time for organizations to rethink what they want to be from a culture and brand perspective. They have the opportunity to redefine who they are and create a work environment that capitalizes on the strengths of diversity and different generations coming into the workforce. They can be more innovative, more oriented to the world as it is today and better prepared to face its many challenges.
Most importantly, we as organizations have the opportunity to increase our resilience so we can thrive in the future.
Learn more in our new blog series, “Preparing to Thrive: Building Real Agility for the Road Ahead.”
Carisue Bench, Senior Vice President, hrQ
Carisue is a senior strategist and organizational transformation leader. She’s spent the last 20 years in various leadership capacities where she partnered with complex organizations to define value propositions, go-to-market strategies, and operational and human capital governance models. Carisue excels as an engaging people leader, facilitator and coach that fosters trusted relationships with key internal and external stakeholders.
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