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As the business press has well documented, we find ourselves once again in unprecedented (or at least unusual) times.
The Department of Commerce recently reported that the US economy contracted at the annual rate of 0.9%. This represented the second consecutive quarter that the US economy contracted (it contracted in the first quarter at the annual rate of 1.6%).
Yet labor markets remained tight with unemployment in the most recent Bureau of Labor Statistics report showing a rate of 3.5%. Job growth also appeared strong with a monthly increase of a robust 528 thousand additional jobs in July 2022. Pundits can be seen and heard debating as to whether we are or are not already in a recession.
For the moment we find ourselves in an environment where growth has stalled, yet labor markets continue to be tight. For managers, this raises the question: how should they manage their labor force in this seemingly contradictory environment?
As we discussed this issue with our clients and colleagues, we developed the following suggestions for managers to consider:
Now is the time to give careful consideration as to how one would proceed should economic conditions change.
Expect very rapid change – reflecting on the last two and half years, we have been struck by how rapidly change occurred. Change is always a part of the management equation. But we now seem to be in a cycle of hyper-change; change occurring at an accelerated rate. This has impacted virtually all elements of how and where we work. It has even caused serious reflection regarding why we work. This change can be negative manifesting itself primarily as a revenue crisis. But just as frequently it seems to us, the change can be unexpectedly positive, presenting new opportunities for thoughtful, agile companies to grow.
Should managers shift their talent acquisition strategies?
Probably, but that should be determined by a thoughtful, critical analysis of their own situations not a knee jerk reaction to macro-economic headlines.
Written by Mark Bealin.