HR Market Update
Uncertainty is in the air. Whether it’s in the economy, employment or the future of work as we collectively define and re-define a post-pandemic world. An uncertain economy is resulting in uncertainty in the HR space. These are some of the major trends we are seeing this month:
Inflation rates are still high and hourly wages are up, but interest rates are increasing. Companies are still hiring, but they are also laying off. We at The Talent Company are experiencing this first-hand, as both our Recruitment and Career Transition and Outplacement services are in high demand. Job vacancies are currently at record highs (5.9%) according to Statistics Canada, yet job numbers have declined for three straight months. The economy is still strong but companies are cutting costs and raising cash in anticipation of a weakening of the global economy.
HR Planning Season
We are getting to the time when many companies are starting to plan their Compensation Strategy and Talent Strategy for next year. The importance of cash flow in uncertain times cannot be understated, as cash flow is the oxygen of an organization. Growth at any cost is no longer the modus operandi. Profitability and ROI are top of mind. Purposeful and select hiring is the order of the day, as companies ask themselves, “How critical is this hire?”
Additional key questions include:
- What do we do about compensation and inflation?
- What other economic factors are still relevant (ie. tight labour markets, unemployment, etc) and how will they impact pay practices?
- How much should we budget for 2023 pay?
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As well, organizations are looking at how internal equity initiatives, retention programs, and other lump sum payments are impacting the sustainability of their pay practices. Companies are still willing to invest, but they are much more deliberate and strategic in their investments. To help with evidence-based planning we have a number of complimentary webinars coming up where we will be providing data and insights on these issues, and you can always reach out to our Compensation team to help you get ready.
Post-Pandemic Work Culture
We are still dealing with the knock-on effects of what we hope to be a post-COVID environment, and this is likely an issue that will persist for some time. There is the belief that the future of work will be different going forward, with many believing that they can’t go back to what we had before the pandemic, that things are different, expectations have changed, all in the backdrop of an uncertain economy.
There are a number of symptoms, as the “quiet quitting” discussion is now front and centre. Companies are still struggling with Remote vs. Hybrid vs. Office and our coaching programs for teams have been helping our clients navigate this challenge. There are also differing levels of appetite for returning to the office. There are younger generations saying they want to come into the office for social interaction, and there is the belief that career advancement happens in person, which is attractive to those who are ambitious.
We’ve noticed that purpose-driven businesses are capturing hearts of the employees in the push-pull of business vs. individual expectations. The amplification of the need for this is very real, and in these organizations, more people are saying, “It’s really good to be together.”
Do you have a plan to navigate this uncertain macroeconomic environment? How ready are you for Compensation Season? How are you adapting to the post-pandemic work culture? We’re here to help. I invite you to book a quick 15-minute chat and let’s have a sounding-board conversation.
Greg Vertelman, Chief Growth Officer and Career Transition Practice Leader