There has been much concern and discussion over inflation’s impact on the US economy and whether it can be curbed before triggering an economic recession.
Several factors help economists determine if a recession is looming including consumer spending, industrial production, personal income, job growth, and unemployment rates.
The jury is still out on whether a recession is looming (or already taking place for that matter), but what could happen to the job market and employers’ workforces if a recession does take place?
First let’s examine the early signs and indicators of recession impact.
INCREASED LAYOFFS
Economists are currently closely monitoring layoff statistics and finding a very minor uptick, however job growth continues to be robust with several hundred thousand jobs added each month.
HIGHER UNEMPLOYMENT
Higher unemployment will lead to reduced spending, a stalled housing market, and eventually even more strained supply chains and industrial production due to job losses. And if inflation is not under control before this time, a cyclical problem will be difficult to solve as costs of goods and services will be out of reach for many households to afford if they have one or more unemployed members within the home.
SLOWER HIRING
While some employers are hiring at a normal pace, others are implementing hiring freezes or pauses. The more this happens, the more the economy will feel the impact negatively.
WHAT CAN EMPLOYERS DO TO PREPARE?
Employers should focus on finding ways to operate as efficiently as possible, reducing operating costs wherever feasible. Employers should also evaluate their workforce strategies as a whole. Many organizations are finding efficiency, cost-containment, and in many cases, cost-savings by shuffling their workforce makeup from mostly full time employees to a combination of full time employees, part time employees, independent contractors, labor vendors, and outsourcing service providers.
HIRING CONSULTANTS CAN INCREASE EFFICIENCY
Using consulting specialists can help increase productivity while decreasing spending. Next Level Benefits provides expert HR consulting services and can help your HR department prepare for and weather any economic storms that come our way. Contact us to learn more.
