With gas prices almost tipping to $6 this June in the Chicagoland, the dreaded word, inflation, is the number one cause for grumblings from every commuter and business owner today. Hiring managers this quarter will have to discover how to create a profit while cutting costs. That’s all while balancing workers requesting an increase in pay to offset the increase cost of living. From large corporations to small local stores, organizations from every size and shape are not immune to the result of inflation, but how exactly will inflation affect the job market?
Let’s take a look at how inflation may impact hiring this year and what that means for pay and profits.
Will Hiring Be Touched By Inflation?
For an insight into how high inflation will affect pay, positions, and more this year, let’s reflect on the basic principal that when inflation is low, then unemployment is actually high. To counter the woes of inflation, unemployment usually has to rise.
“Hiring won’t necessarily decrease just because we anticipate unemployment to rise.” says Jeff Naugle, with Catalyst Career Group’s Hiring Fairs.
This idea may sound counter active, but in actuality, during a recession or times of inflation, organizations don’t just stop hiring. They begin to change the way in which they hire for that season.
“We can expect to see hiring managers transition from the concept of hiring a single full-time worker for a position to a multi-hiring part-time hiring to save on costs.” says Jeff Straub, with Catalyst Career Group’s Private Recruiting Events.
Contact, “gig”, and part-time workers are all types of positions we can expect to see more of in the future as we move into more of an inflated economy. Employers won’t have to pay for benefits such as healthcare, and part-time works come at at cheaper rate that full-time team members.
Do You Need To Adjust Salaries In Response To Inflation?
There as been a trend during high inflation periods for team members to ask for more money. This is in response to the greater cost of living. As an example, data from the Bureau of Labor Statistics show that wages have increased by 5.6% in the past 12 months. That is at the same time as prices have increased by 7.9%. There is definitely a definite in wages to prices and there will be movement on this forefront to equalize this across every industry.
“As a hiring manager, one of the big things you’ll have to do is address these concerns on a case by case basis,” says Naugle. “A vice president’s salary is going to look much different than a waitress’s hourly rate, so what is your bargaining power to retain top talent for the position you want to fill?”
Hiring managers that want to retain quality candidates must be creative and source the right talent if they don’t have the budget for typical raise percentages. Other perks and benefits can be a major contributor to hiring and retaining an employee.
Hiring Forecasting: Does Inflation Create Recessions?
The 1970’s showed us that when inflation has reached the levels that it is today (think again about the $6 for gas in the Chicagoland), the government counter acts by pushing the economy into a recession to slow spending and ultimately change the way people spend their money. That is what we can expect to happen today.
Companies can expect to protect themselves during recessions by investing in quality candidates for their most necessary positions, being strategic about their pay, prioritizing their marketing, and focusing on customer service (did someone say talented hires again?).
Consider how you can beat inflation for your organization and hire the right people in the right positions at the right price point. Ask us about our virtual job fairs or private hiring events and what job descriptions will draw out the right candidates to help you be successful during this season!
