Why recruiting and retention difficulties are finally easing | C-Suite Insights 6.12.24
Finding Workers Gets Easier But Is Still No Walk in the Park
While the US labor market remains tight, many organizations are finding it much easier to recruit and retain workers. That’s according to the annual Reimagined Workplace survey of HR leaders from The Conference Board US Human Capital Center.
The hunt for talent has eased: At the peak of the Great Resignation in 2022, 83% of HR leaders cited difficulty recruiting workers. Now in 2024, the share reporting this dropped 28 percentage points, to 55%.
Workers are sticking around: Retaining workers is also becoming less challenging. Only 41% of HR leaders report difficulty retaining workers compared to a high of 66% in 2022.
The TCB take: “The steps companies have taken to attract workers are paying off, but more than half still report difficulty finding talent," said Robin Erickson PhD , Vice President, Human Capital, The Conference Board.
"To broaden the pool of job candidates, companies can not only accept alternative credentials, but also open positions to remote workers—which has the added benefit of providing flexibility so they’re more likely to stay,”
Number of the Week: 272,000
The US economy added 272,000 jobs to nonfarm payrolls in May—an outsized month after job gains slowed to a downwardly revised 165,000 in April.
May’s surge in hiring was on par with the sizable readings over much of the last six months. Health care and social assistance (+83,500) once again led the charge, while government (+43,000) and leisure and hospitality (+42,000)—which each took a breather in April—roared back with a pick-up in hiring.
The TCB take: This resilience in hiring—accompanied by sticky wage gains—supports further Fed patience and higher-for-longer interest rates ahead.
The Window Is Closing to Save Social Security
Social Security is a vital and immensely popular program that supports approximately 67 million Americans—but policymakers need to act quickly to save it.
A ticking time bomb: Current projections show that those receiving retirement benefits will face mandatory benefits cuts in 2033 if nothing is done.
The cost of complacency: As an important component of the Federal budget and US GDP, the program’s finances have significant effects on the national debt and the American economy. The longer the delay, the greater the chances that the necessary legislative changes to save Social Security will be disruptive to beneficiaries and the broader economy.
The TCB take: Given the impending depletion of the Trust Fund for retirement benefits, it is crucial that Congress addresses this issue quickly. Options for saving Social Security include:
Doing so will preserve these benefits for current and future generations.
Americans Are Fed Up with High Prices—and Companies Are Responding
In our latest Consumer Confidence survey , consumers mentioned prices as being top of mind alongside expectations that both inflation and interest rates will increase over the next 12 months.
Rising pressure: Heightened debt levels and interest rates mean that consumers are spending more on interest payments, with less left for goods and services. Consumers are increasingly stretched. Pandemic savings are depleted. Wage gains are slowing. Household debt is rising rapidly.
What happens next? The spending slowdown is unlikely to abate. When asked what type of spending they would cut back on, consumers mostly cited dining out, clothing/fashion items, entertainment, and vacations. Consumer prices will be a leading topic of debate in the election campaigns.
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The TCB take: Big retailers have already responded. Walmart announced promotions on 7,000 items while Target revealed price cuts on 1,500 items, all in an effort to sustain spending. But marketing must play a role to sustain the belief that things are worth buying.
QUOTABLE: Office Politics
“Polarization is negatively affecting workplace dynamics because employees are people, right? And they are also consumers. But employees are increasingly bringing their personal and political beliefs into the office, and they expect their companies to take stances on these very divisive social and political issues. And they are questioning the legitimacy of opposing viewpoints and decisions.”
— Merel Spierings, Senior Researcher, The Conference Board ESG Center. She joined C-Suite Perspectives to discuss the corporate political environment.
Some Breathing Room for China’s Economy
Due to unexpected high growth in the first quarter, The Conference Board has revised upward the forecast for China’s GDP growth this year to 5% from 4.6%. This means China only needs to expand by an average of 4.9% through the balance of the year to achieve the official target of “around 5%.”
Tackling unsold housing: Despite indicators suggesting weaknesses in retail sales and property investment in April, there are no signs of a Q2 slowdown. Authorities are increasing stimulus support, and the government has recently announced a RMB 300 billion (USD 41 billion) relending program to finance the conversion of unsold housing units into affordable housing.
The TCB take: While there are signals that the Chinese economy is stabilizing, growth is mainly being driven by supply-side stimulus. While structural issues remain unaddressed, multinational corporations (MNCs) will continue to face a market of weak consumption and intense local competition, challenging notions about the China opportunity.
MNCs in China need to rethink their strategies to defend market share while also maintaining robust alignment with head offices.
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