We’re Going Across the Pond!
Welcome back to the Recruitonomics Newsletter! This week, we’re featuring a post from the newest Recruitonomics’ contributor, Julius Probst. Julius is a European Labor Economist for the United Kingdom’s largest hiring platform, Totaljobs . We are excited to share his insights with you!
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This Week on Recruitonomics:?
Is the UK Headed For a White-Collar Recession??
The United Kingdom may be headed for a white-collar recession. The economy (one of the only advanced economies that has not surpassed its 2019 GDP level) has already been through a very difficult time from the pandemic and Brexit. Now, the Bank of England’s interest rate hikes are sure to cause even more pain in the already-suffering economy. The central bank now forecasts a prolonged recession through 2023 and into 2024. What does this mean for the labor market? If the recession remains relatively shallow, unemployment may not increase as much as the BoE forecast suggests because of labor hoarding – companies are still facing blue-collar labor shortages.?
Read the full article here .
What does this mean for recruiters?
The state of recruiting during a recession is always nerve-wracking, but there’s early evidence that a downturn in the U.K. may not bring about the normal level of devastation. If you’re recruiting in lower-wage industries, recruiting may not slow as in recessions past. A similar trend is emerging in the U.S. – layoffs in white-collar professions have increased, while demand remains strong in sectors like leisure and hospitality.?
Wage Gains Favor Low-Wage Workers
Low-wage workers and job switchers have made the most impressive wage gains in recent years. While gains have been impressive across the economy, these two groups have far outperformed higher-wage workers. The trend for job switchers and low-wage workers are distinct but not independent. Industries that often employ these workers, like leisure and hospitality, have seen historic rates of turnover since the beginning of the pandemic. Intense competition for workers has made it easy to make gains in this tight labor market.
Read the full article here .
What does this mean for recruiters?
Looking back on the state of recruiting for the past couple years, the news of historic nominal wage gains may not be surprising. The increased competition for workers has truly created an anomalous labor market, including the low-wage earnings boom.?
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Recruiting Tips:?
??The 2023 Benchmark Report is coming! ?? Our yearly report features must-see recruitment marketing data and Appcast’s key takeaways on how recruitment will look in 2023. The countdown is on!
Join us on Tuesday, January 24 at 1:00 p.m. ET to be among the first to hear the findings on Tuesday, January 24! Labor Economist Andrew Flowers will take a deep dive into the data and give an inclusive peek into our key findings. Don’t miss out, register now! ?
Recently on Recruitonomics:
Inflation is turning a corner. Though prices remain elevated, the last Consumer Price Index Report of 2022 showed monthly disinflation. This third consecutive “good” CPI print will undoubtedly please the Fed – and perhaps convince them to start slowing (or even pausing!) interest rate hikes. The future of the labor market depends on the Fed’s upcoming decisions – and therefore, on today’s inflation. The risks are certainly not behind us, but it’s starting to look like the “soft-landing” scenario may not be as much of a dream as originally thought.?
Read the full article here .
Manufacturing demand thrived in 2022, despite the Fed’s interest rate hikes. How did manufacturing, a particularly at-risk sector, manage to preserve demand into the new year? For one, demand for goods has stalled but remained elevated compared to 2019 levels: consumers still want new things, even rate-sensitive durable goods. Secondly, companies were absolutely walloped during the pandemic: supply chains crumbled and the true benefits of “reshoring” became clear. Manufacturers may feel compelled to strengthen their workforces at home, thus pushing demand higher.?
Read the full article here .
What Recruitonomics is Reading:
New pay transparency laws were created to reduce wage gaps and inequalities. Now that several laws are in place, people are watching if these laws truly help those inequalities. So far, they have – but there are ripple effects. The New York Times found that business owners have found that it makes the search process more efficient – candidates who applied with all the information about the position were often better fits than before pay ranges were included. Other indirect effects include narrowing the pay ranges between high and low performers, in part because of weakened bargaining powers. Candidates are taking companies at their word and accepting the high range, rather than negotiating. There are other, positive, indirect effects though – workers in the know on managers’ salaries work harder, eager to reach the next stage of employment. As these laws continue to gain traction and develop, Recruitonomics will be tracking their direct and indirect effects.?
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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.