There’s No Recession in Hiring

If a recession is coming, why are there so many job openings?

Job openings remain high partly because companies have struggled to remain fully staffed amid the Great Resignation. Right now, it’s very difficult to hire and retain employees. And employers don’t want a repeat of 2020—when companies laid off scores of workers only to struggle to rehire them.

“There is a tendency not to overcorrect, especially given the challenges organizations have had around hiring in just the last year,” Lexi Clarke, head of people at compensation data company Payscale™, said. “This is a time to be proactive and think about the long-term impact of [hiring] decisions related to talent.”

There’s also been a cultural shift that’s made quitting more palatable, as people now search for more personal perks like work-life balance, workplace amenities, meaning, and purpose.

Can employees use the hiring shortfall to get more money or better benefits?

It seems so. Not only are employers still hiring, but they’re also offering higher pay, perks, and signing/retention bonuses. ManpowerGroup’s clients, which include Fortune 500 companies, offer tuition reimbursement, remote work, gas subsidies, and four-day work weeks. This affects every industry, from tech to retail, and includes everything from health care to PTO.

The Society for Human Resource Management’s recent Employee Benefits Survey found that employers said every type of benefit (health benefits, retirement savings, paid leave, and flexibility) are more important today than before 2020. So, now is as good a time as any for workers to ask for better pay and benefits from an existing employer—or from a new one.

To quit or not to quit

An employee’s viability depends on their industry, qualifications, savings, and tolerance for uncertainty. So, it’s not a bad time to be looking for a new job.

Business-focused think tank The Conference Board discovered that while many company executives predict a recession by the end of 2023, they also say that attracting (and retaining) talent is part of their top long-term growth strategy.

So, while the high-profile layoffs, hiring freezes, and slowdowns at tech companies like Meta, Coinbase, Netflix, and Tesla are pivoting to deal with setbacks, these aren’t necessarily reasons to worry, since those only make up a tiny fraction of jobs in the economy.

According to Sean R. Gallagher, executive director at Northeastern University’s Center for the Future of Higher Education and Talent Strategy, “There are sectors that are just continuing to grow and structurally are going to need more workers.”

When do we get back to normal, whatever that means?

A lot of the recent weirdness about the current employment climate isn’t so much that the economy is tanking as it’s simply not growing as fast as it was, two drastically different metrics.

“For a lot of people, this slowdown, or return to normal, can feel more painful than the data suggests, just because we’d been at this breakneck speed of economic growth in 2021,” said Luke Pardue, an economist at payroll, HR, and benefits software company Gusto.