The Presidential Impact on Recruiting: A Post-Election Analysis
Welcome back to the Recruitonomics Newsletter! This week, we’re diving deep into the outcome of the U.S. presidential election and what it may mean for recruiters. Plus, we go across the pond to look at the latest labor market data in the United Kingdom.
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This Week on Recruitonomics:?
Trump’s Trio: How Immigration, Tariffs, and Taxes Shape the Economy?
The voters have spoken: Donald Trump will be the next president of the United States, returning to the White House in January 2025. Now that the dust of the election uncertainty has settled, a new uncertainty arises: policy change. Three core policy shifts are likely to impact the economy, and therefore recruiting, in 2025: taxes, tariffs, and immigration reform. Immigration policy will likely focus on deportations. This will reduce the talent supply that has grown so strongly in the past couple years and helped tame labor shortages. Trade policy will likely expand tariffs on all imported goods, increasing costs for businesses and consumers and contracting economic growth. Finally, tax policy will focus on extending the current tax code, leading to modest gains in employment and wage growth over the next decade, but adding significantly to the national debt. In all, economists agree that these potential Trump policies will have a large impact on the American economy, and Sam Kuhn reaches through and spells out what that means for recruiters in his latest piece.?
Read the full article here .?
What does this mean for recruiters??
Tariffs will drive up costs and slow economic growth. For recruiters in sectors sensitive to these price increases, this could translate to reduced hiring demand as businesses pass higher costs on to consumers, potentially curbing overall demand. As for immigration, regardless of whether your company employs unauthorized immigrants, chances are your competitors do. This creates a cascading effect across the economy. And for taxes, these impacts are particularly pronounced for those recruiting hourly workers. The labor market for “standing-up” workers—those in physically demanding, on-site roles—remains tighter than for “sitting-down” workers in office-based or remote roles. These policy shifts could exacerbate challenges in these sectors, potentially triggering another wave of attrition reminiscent of the Great Resignation in 2021.??
The UK Labor Market is Cooling, But Worker Churn Has Frozen
The latest employment data from the United Kingdom shows a labor market that has rapidly cooled, defined by a steep decrease in turnover. The unemployment rate unexpectedly increased to 4.3% for the period of July to September (it previously stood at 4%). However, the extremely low response rate to the household survey, which measures the unemployment rate, means that we cannot fully trust this data. Regardless, even with the volatility, it is obvious the unemployment rate has increased since the tight labor market of 2022. Other data points also suggest a weaker, less flexible labor market, specifically the level of worker churn (workers moving from one job to another). Job-to-job transitions have plummeted in the third quarter of this year. For workers, the option to leave a current company to find employment elsewhere has clearly deteriorated and, from the decrease in resignations, it is clear they are aware that this is not a great labor market. It’s not all bad news, though: Two recent employment outlook surveys from Manpower and the Chartered Institute of Personnel and Development show that companies have a more positive hiring outlook in the fourth quarter, a trend that will hopefully follow into the new year.?
Read the full article here .?
What does this mean for recruiters??
If you are currently hiring, you will likely receive a higher number of applicants at a lower cost (the cost-per-application has decreased as the labor market has cooled). But challenges remain. While it will be easier for now to find white-collar workers, blue-collar workers are still in relatively short supply due to Brexit.
Recruiting Tips:?
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Recently on Recruitonomics:
The Good, the Bad, and the Ugly: Three Takeaways from the UK Autumn Budget?
In the last week of October, the new Labour government in the United Kingdom announced its first budget, the most significant in decades. Over a decade of Tory rule has created a sluggish U.K. economy, with stagnant economic growth, depressed wage growth, and increased economic inactivity. It is thus not a lie when Labour officials say that they inherited a terrible economic legacy. With government debt at its highest level in decades and interest rates above 4%, the government does not have a lot of fiscal space.? The private sector had been eagerly awaiting the policy announcements ever since Labour came into power. Policy uncertainty has weighed on business investment and hiring in the months prior to setting the budget. Now that it is released, there is no doubt that the budget will take the U.K. economy in a new direction. Public spending will increase, as will taxes. Whether this approach will be more successful than the Tory way, however, remains to be seen. Julius Probst, PhD outlines his three main takeaways from the Autumn Budget, and what the new measures will mean for recruiters.?
Read the full article here .?
What Recruitonomics is Reading:
One thing is for certain when discussing AI: Executives are excited about it. According to Slack’s new Workforce Index report, 99% of executives say they plan to invest in AI in the coming year. However, that excitement is not matched throughout companies. In the past three months, adoption of Artificial Intelligence has stalled in the United States, and nearly half of workers reported feeling uncomfortable admitting to their managers they use AI for common workplace tasks. This disconnect will be interesting to observe in the year ahead. Read the full report from Slack here .?
More Data & Insights:
Thank you for reading! Stay tuned for next week's Recruitonomics Newsletter and check out Recruitonomics.com for more data-driven insights.