Markets

Employer-employee dynamics at the heart of changing labor markets

With growing economic uncertainty and fears of a potential recession in 2023, one constant strength of the economy, both nationally and in Wisconsin, is the labor market. The national unemployment rate was 3.5% in December, and Wisconsin was a few dozen lower overall. Payrolls and wages continued to rise, even if the pace slowed somewhat. At the same time, some warning signs are starting to flash with big tech companies like Amazon, Meta and Salesforce cutting thousands of jobs. “We have a feast and a famine in terms of what industry you’re in and what kind of circumstances you’re in,” said Molly Thiel, director of people at Brookfield-based talent acquisition firm Cielo. Thiel said Cielo, which serves a variety of sectors including business services, consumer products, healthcare, media, technology and life sciences, is seeing many clients that were essentially over-hiring coming out of the COVID-19 pandemic. However, differing views on the labor market persist even within companies.

Thiel

“We see a lot where the feeling of hiring managers in organizations was still, ‘I need more people, I need more people because I have so much work,'” Thiel said. “But the financial elements and the corporate elements of that company look at it and say, ‘I can see down the road, you won’t need that, I can see a picture that you don’t feel right now.'” Thiel will be among the speakers at 22nd Annual BizTimes Media Economic Trends Event on January 26th at the Italian Community Center in Milwaukee. In addition to the different labor market pictures, Thiel said there is also an open question as to whether the market will favor employers or employees more in the coming year. “For the last 18 years, 24 months, it’s felt like as an employer we’ve been at the mercy of whatever our competitors are doing or what our employees are demanding, who now collectively seem to have a lot more bargaining power than they used to,” Thiel said. . “It’s becoming increasingly important that we take ourselves more seriously in terms of what we offer those candidates, rather than thinking that they’re dying to come work for us.” Part of the increased employee power came from economic conditions that led businesses to hire more, while part of it also came from demographics. Regardless of the direction of the economy, demographic trends – led by the retirement of baby boomers – will continue to shape the labor market. “If you look globally, there’s really only one part of the world that will have more labor than jobs in the next 10 years, and that’s India,” Thiel said. Even when baby boomers are not retiring, many are becoming more selective when choosing their jobs and careers. At the same time, younger generations want to see that the companies they work for are part of a larger mission or contributing to their communities. Thiel said that’s where a company’s diversity, equity and inclusion efforts or environmental, social and governance issues come into the hiring equation. “It’s no longer just about the cash package you give them and how creative you are with the comp, it’s about the whole experience of working with you and from the candidate’s perspective, how much of that experience can they have through their process of researching you as an employer,” he said. is Thiel. “Instead of thinking of the interview process as an assessment of whether or not you want the person to come work for you, you treat the interview process almost like a dating situation where there are just so many choices.” Businesses are also faced with the need to behave differently as they face a potential downturn. Having made significant investments in recent years to attract and retain talent, many businesses are getting more creative to avoid layoffs, Thiel said. Examples include better systems to avoid overstaffing in the future, sharing work or skills, and providing additional flexibility in certain roles. She added that companies are also changing the way they lay off when it becomes necessary. those people come back or maybe you want, and they have to want to come back,” Thiel said. It’s important for companies to avoid damaging their employer brand, Thiel said, noting that businesses should strive to be transparent through the layoff process, help employees transition to their next job where possible and be thoughtful about the type of financial compensation they offer. “If you’re in a layoff situation, you absolutely have to start thinking about it differently than you have, because taking care of the whole person is becoming more and more expected,” she said.

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