The Employment Conundrum

Dictionary.com defines a conundrum as a "confusing and difficult problem or question." So why do we find ourselves in the midst of an employment conundrum? In April 2023, the United States gained a substantial 253,000 jobs for the month, even though we have record high inflation, rising interest rates, and a banking collapse that could weaken the economy.

For the Fed, having a strong jobs report is not bad, as they would rather see a slowing jobs market. This is because a slowing jobs market would indicate that their interest hikes are working, and inflation may start to slow. Instead, we added 165,000 jobs in March and 248,000 in February, increasing to 253,000 in April. So, we actually have a vigorous labor market despite seeing many layoffs that have happened.

If you pay attention to LinkedIn or my newsletter, you will know that tech went through and is still in the process of widespread mass layoffs throughout the industry. The problem with layoffs of this type is that it is hard for high-earning employees to find an equivalent job. As I predicted, many candidates I am in touch with have taken 3-4 months to land a new job that is even close to what they were earning with the same perks they are now so accustomed to.

Many are not looking for work, and not just because of layoffs. Due to the pandemic and the related stipends and free money that was handed out, many people left the employment line. They stopped working altogether or pursued side hustles rather than working for a company. However, many of those workers are back looking for a job, which is suitable for a strong labor market with many open positions to fill.

Another issue that could continue to impact employment is the financial systems in America, which have been rattled significantly. Two of the most significant bank failures and collapses have occurred in the last couple of months, and disaster was only avoided because the Fed stepped in to back all of the depositors that stood to lose thousands if not millions of dollars. However, those collapses may not yet be over, and if they continue could significantly impact those companies that bank with those struggling systems.

If you are a worker looking for work, it is an excellent time to be looking. While fewer high-paying jobs are open, there is plenty of work to be had, and if you're willing to go to work, you shouldn't stay unemployed for long. We still have many open jobs. Robert Half reported last week that they are still seeing high demand for workers across industries, particularly in skilled trades like finance, accounting, and healthcare.

So, as always, I recommend putting away some rainy-day money in case layoffs impact your company, as so many others have. Prepare for the worst; you will thrive even in those downtimes. Protect your downside and you will boost your upside. Also, ensure you always find ways to increase your value through upskilling, continued education, and becoming more valuable to any employer.

Thank you for reading, liking, and subscribing to this newsletter. It is greatly appreciated!

-Nick