HR Market Update
A Tale of Three Cities
To paraphrase a classic novel, it’s the best of times, it’s the worst of times, and everything in between.
Strong macroeconomic forces in the form of record high inflation, low unemployment rates and rising interest rates have combined to create a perfect storm of uncertainty. But a rising tide doesn’t lift all boats and a falling tide does not sink every ship. What we are seeing is a trifurcation in the HR marketplace, as companies find themselves in one of three distinct scenarios:
The Best of Times
Despite the possibility of recession, companies in sectors such as manufacturing are continuing to hire aggressively. This is due to a combination of trying to backfill previously vacated key roles and a backlog of orders as measured in years. The challenges for these companies are threefold:
- To hire quality people at speed and scale (Recruitment)
- To train and retain key talent (Talent Development)
- To do all this without misaligning the existing compensation plan (Compensation)
We estimate that ~60% of HR leaders we have spoken to are currently in this situation. Our teams have been able to help clients solve for these challenges not just individually but holistically.
The Worst of Times
We are seeing companies in the financial, real estate and tech sectors scaling back their open roles, instituting hiring freezes, and in some cases, downsizing as they prepare for recession. Currently we see about 10% of companies we’ve spoken to at this stage. Demand for our Career Transition and Outplacement services have picked up, and for good reason.
Word on the street is that some of the smaller firms offering competing services have scaled back their offering to cut costs, while we have just enriched our offering by partnering with Happify to include a best-in-class science-based mental health and wellness platform for all our Career Transition and Outplacement clients.
Everything in Between
In some cases (we estimate 20-30%), companies are in a state of uncertainty and still evaluating the situation. However, evaluation does not mean lack of action. Key roles are still being hired for, workforce contingency plans are being made, must-keep talent still need to be retained and proactive companies are reaching out to us to get their Career Transition and Outplacement services in place before they need them.