Amid growing economic uncertainty and fears of a possible recession in 2023, the steady strength of the economy, both nationally and in Wisconsin, has been the labor market.
December’s unemployment rate was 3.5%, and Wisconsin is a few tenths lower overall. Wages and salaries have continued to rise, even if the pace has slowed somewhat.
Meanwhile, some warning signs are beginning to emerge with major tech companies such as Amazon, Meta and Salesforce cutting thousands of jobs.
“We have a feast and a famine in terms of what industry you’re in and what circumstances you’re in,” says Molly Thiel, principal of Brookfield-based talent acquisition firm Cielo.
Thiel said that Cielo, which serves a range of industries including business services, consumer products, healthcare, media, technology and life sciences, is seeing many clients who have essentially over-hired coming out of the COVID-19 pandemic. :
However, differing views on the labor market persist even within companies.
“We’re seeing a lot when the attitude of hiring managers in organizations continues to be; “I need more people, I need more people because I have a lot of work to do,” Thiel said. “But the financial elements of that company and the corporate elements that look at it and say,
Thiel will be among the speakers BizTimes Media’s 22nd Annual Economic Trends Event on January 26 at the Italian Community Center of Milwaukee.
In addition to the mixed labor market picture, Thiel said there is also an open question as to whether the market will favor employers or workers more in the coming year.
“Over the last 18, 24 months, it seems that we as employers are at the mercy of what our competitors are doing, or what our employees are demanding, who now collectively seem to have a lot more bargaining power than they do. before,” Thiel said. “It’s becoming more and more important that we take ourselves more seriously in terms of what we’re offering those candidates, rather than assuming they’re going to work for us.”
Part of the labor force comes from economic conditions that force businesses to hire more, while part also comes from demographics. Regardless of the direction of the economy, demographic trends driven by the retirement of Baby Boomers will continue to shape the labor market.
“If you look globally, there’s really only one part of the world that will have more labor than jobs in the next 10 years, and that’s India,” Thiel said.
Even when Baby Boomers are not retiring, many are becoming more selective about their work and career choices. At the same time, younger generations are looking to see the companies they work for as part of a larger mission or giving back to their communities. Thiel said this is where a business’s efforts in hiring on diversity, equity and inclusion or environmental, social and governance issues are put into equality.
“It’s no longer just about the bundle of cash you give them and how creative you are going to be with your comp, it’s about the whole experience of working with you and from the candidate’s perspective how much of that experience they can have throughout their process. looking for you as an employer,” Thiel said. “Instead of thinking of the interview process as judging whether you want the person to come work for you, you treat the interview process as a dating situation where they have just as much choice.”
Businesses are also faced with the need to do things differently as they face a potential downturn. “Having made significant investments in recent years to attract and retain talent, many businesses are becoming more creative about layoffs,” Thiel said. Examples include better systems to avoid redundancies in the future, sharing jobs or skills, and offering additional flexibility in certain roles.
He added that companies are also changing how they plan to make layoffs when they become necessary.
“You do as an employer has to remember, you can hire those people very well, or you can want to and they have to want to come back,” Thiel said.
It’s important for companies to avoid damaging their employer brand, Thiel said, noting that businesses should strive to be transparent about the layoff process, help employees transition to their next job where possible and be mindful of the financial compensation they offer.
“If you’re in a layoff situation, you have to start thinking about it differently than you did because taking care of the whole person becomes more expected,” he said.