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Potential recession and the implications for the labour market

This month we’ve decided to tackle the talk of a potential recession head on and discuss what some of the implications for the labour market may be.  As your people specialists we think it’s important to have full and frank conversations about what’s on the horizon and how this could impact you.

The below information is from an article from XPG Insights, specialists in the staffing sector from the USA.

Economists have been discussing the possibility of a recession for months. Recessions are difficult for companies and employees in the workplace, but in some ways, they’re a force to bring balance back into the economy.

Elon Musk said it at a tech conference earlier this year said “I’ve been through a few [recessions],” he said. “And what tends to happen is if you have a boom that goes on too long, you get a misallocation of capital. It starts raining money on fools, basically,” Musk added. A recession, painful
as it is, clears out weaker companies and weaker performers.

The workforce will always be impacted by booms and recessions: When a booming economy goes on for a long time, it’s hard to tell top performers from workers who just got lucky. As the economy tightens, companies will have to determine who the real performers are and make some tough
decisions about who to retain and how to weather the storm.

There’s no question that the balance of power has shifted to workers over the past year of recovery from the pandemic. But we believe we’re about to see a shift back.

That means some of the policies that were implemented to recruit and hang on to talent will change. Things like signing on bonuses, salaries that were not in alignment with job responsibilities, letting employees work all the time remotely.  The survey’s tell us that employers are ready to get back to regular office hours. A recent Microsoft survey of more than 20,000 employees in 11 countries found significant differences of opinion on remote work. While 87 percent of employees said that working from home increased their productivity, 80 percent of supervisors didn’t agree. That probably means more office time for more workers very soon, particularly as harder times hit and productivity and adding value come under the spotlight.

As the economy tightens, the company’s focus will change from what the employees need to what the company needs.  Team members will need to pay greater attention to balancing their wishes and preferences for work against the reality of business cycles in the 21st century.

Have you got people concerns you’d like to talk through?  Give us a call on 07 870 4901 and one of our people specialists can help you get the right strategy and resourcing in place for your business.