Status Update: It’s Complicated

The global economy operates a lot like a social media platform. If it had a news feed, it would be filled with posts about high inflation, low unemployment, and efforts by governments to avert a recession. If it could tweet, its announcements about interest rate hikes would reverberate across the platform in comments and retweets. And, let’s face it, if it had its own relationship status, it’s…complicated.

Recently, I wrote about how today’s world has become one big, interconnected network and how operating globally requires an authentic commitment to meeting your clients where they do business. Understanding the underlying economic dynamics in key markets is a critical part of this effort, which is why I’m so proud to present Workforce Solutions Market Overview: March 2023 Edition. This report combines the latest economic data and insights from around the world with leading solutions to help companies navigate the ups, downs, and in-betweens of today’s complex, changing marketplace.

What’s happening with the labor market

If you’re looking for cracks in the global economy, it’ll be harder to find them in the labor market. In many parts of Europe, job vacancies still outnumber job seekers, even as data shows that a slowdown in the economy is already underway. In the U.S., where policymakers spent 2022 attempting a soft landing by sharply raising interest rates in an effort to tame inflation, it appears like their strategy might pay off: inflation is cooling, yet the job market has proven resilient.

In January, U.S. employers added more than half a million workers, significantly beating expectations and pushing the unemployment rate down to a 53-year low.

There are, of course, some exceptions to this unexpectedly rosy picture. In the U.S., hiring saw a steady — but relatively small — decline throughout 2022, with industries like big tech leading a pack of highly-publicized layoffs. Still, hiring for the year tracks well ahead of the period prior to the COVID-19 pandemic, which saw a slow recovery over the decade following the Great Recession. Across Europe, labor market tightness is leading to below-potential growth. Take the UK, for example, where the impact of Brexit on the supply of workers, along with the high incidence of long-term sickness among workers, is pushing wages and inflation even higher. Meanwhile, Germany’s growth potential continues to be limited by its aging population: by 2030, the country will employ more 65-year-olds than those under 20.

Despite these exceptions, the underlying labor market remains remarkably strong, making it clear that — even in times of extraordinary uncertainty in the global economy — many employers aren’t willing to part ways with their most important resource: their people.

For these companies, the upside to retaining their workforce is clear: in an unpredictable market where economists speak of ongoing labor supply woes in terms of years rather than months, it’s wise to bet on a sure thing. Should the global economy dip into recession — or even a milder “slowcession” — companies that keep people employed will remain in a stronger position to scale up their operations as soon as conditions recover.

A successful response begins with enterprise transformation

Flexibility is the theme of our latest market study. There’s a good reason for that: no matter the economic circumstances, companies that approach their work with agility will be in a stronger position to succeed.

At AgileOne, agility is our namesake. To make sure we’re living up to the promise of our brand, we’re making serious investments in our Enterprise Transformation Team (ETT), expanding and aligning our department to better meet the needs of our customers, suppliers, and internal stakeholders. By forging strategic relationships with leading technology and industry partners and leveraging our network of more than 3,500 suppliers, we aim to become the greatest aggregator, capable of delivering a wide set of solutions no matter the size or scope of the engagement. We’re also speeding up implementation by deploying an internal training strategy and focusing on opportunities to build a genuine, consultative partnership with our customers.

Companies everywhere should view this period of transition in the global economy as an opportunity for real transformation.

What are some ways you can streamline your basic operations to allow your teams to double down on your core mission? Is your team equipped with the tools they need to successfully carry out their roles? Where are there opportunities to forge more meaningful partnerships with industry experts who can help you deliver results on behalf of your clients?

If the past few years have taught us anything, it’s that uncertain times call for ingenuity and light-on-your-feet thinking. And, at AgileOne, it’s our customers who stand to benefit the most from the ideas we’re generating today.

In rapidly changing times, AgileOne is at your side. We are the one workforce solutions provider to offer comprehensive solutions leveraging the best of the best, combined with our technology expertise, consulting services, and exceptional delivery teams to meet all your talent attraction and management needs.

Here are five solutions we’re recommending for companies of any size or scope to navigate today’s evolving labor market:

1.  Hire flexibly with contingent labor. In times of transition, contingent labor provides companies with the flexibility to adjust to reduced demand during economic contractions while allowing them to quickly scale up during recovery.
2. Streamline with total talent solutions. AgileOne's total talent management solutions offer a strategic approach to managing all categories of workers with a singular model supportive of an organization's workforce fulfillment needs. This allows companies to streamline their operations and weather any conditions.
3. Diversify your workforce. Employers who hire nontraditional candidates — or "hidden workers" — benefit from a larger and more diverse talent pool. Furthermore, women and minorities in leadership positions have been shown to outperform their peers on profitability, strengthening the business case.
4. Build the ultimate worker pipeline. By leveraging talent communities — or groups of interested candidates who are not yet ready to commit — companies can focus on building a pipeline of quality workers until the right time for both parties.
5. Double down on culture. In an era of historic labor market tightness, companies that prioritize a human-centered approach will be in a stronger position to retain employees. Proven strategies that improve company culture include embracing flexible working arrangements and supporting opportunities for learning and career advancement.

Download AgileOne’s Workforce Solutions Market Overview, March 2023 Edition here.