From what I’ve heard from my clients, I don’t think we’re going to see a decline in hiring. There will be layoffs, yes, but they won’t be widespread and (are) mostly specific to one sector: technology, where a lot of the job losses have come. You’re not seeing significant layoffs in any of the other seven major industries. The Fed may have to get more aggressive in raising interest rates again.
Wage pressures appear to be moderating, with average hourly wages rising by just 10 cents in January.
The labor market is cyclical. A year ago it was dominated by employees, which meant that if you wanted a raise or a promotion, you could get it. Companies have paid a lot. The candidates were in the driver’s seat. Now the balance is shifting towards where employers have more influence. There’s no going back to where the employer is in charge again, but the balance is somewhere in between.
Part of the pay moderation is related to recent earnings that have been disappointing at many companies. They are no longer willing to give candidates big salaries just because that’s what they ask for. Over the next six months, I expect to see wages level off.
A year ago, employers were reluctant to ask employees to return to the office for fear that good talent would quit. It seems to have changed recently.
Companies now say you have to go back to the office. A year ago that didn’t happen. Companies like Disney say everyone has to go back to the office at least several days a week. They are willing to part ways with their workers who disagree with this. Work in the future will be more hybrid.
Last year, everyone was talking about the “big waiver.” Is it still the trend?
People who quit their jobs have actually been going on longer than you think, and we’re still going to have it. Companies looking to hire talent are now more likely to accept this, but we advise our clients to vet a candidate who has left an employer carefully. Have they left to step up and grow and show a level of progression in their career? Or did they just not like their boss? Many companies aren’t afraid to hire a worker who has left their job in search of better, more impactful opportunities.
Recently, we’ve been seeing more and more boomerangers — employees who quit, then dislike the new culture they join, and end up returning to their old employer. We made it happen in our company. They find that the grass isn’t always greener on the other side.
By all accounts, small companies are still hiring.
It’s no surprise. Historically, small and medium-sized businesses have always been the creators of jobs. All of these layoffs at places like IBM and Google should greatly benefit smaller employers. Every organization needs technical support and now kids can find that experience in candidates who are leaving the biggest employers.
I once worked for a much larger staffing firm, Kelly Services, with $5 billion in revenue. It was a great experience but I wanted to go to a more entrepreneurial organization where I could have a larger voice at the table.
Is a recession still possible this year?
It seems less likely now. As long as the job market is this strong, it’s hard to imagine we’re heading into a recession.