I know recruiters are busy, especially now with the turmoil in the industry including higher requisition counts, lower candidates in the pool and inflation driving demand for higher pay higher. Since I’m a giver, I thought I’d provide a quick summary of some key economic news affecting recruiters.
🍻 and 🚬 tell a story
The high rate of inflation has forced American consumers of both alcoholic beverages and tobacco products to shift away from Budweiser and Marlboro and toward cheaper, lower-priced brands like Icehouse and Eagle 20, according to one report. Retailers are reporting customers are increasingly choosing less expensive beer brands like Busch Light, Icehouse, and Milwaukees Best Ice.
In the four weeks ending July 2, retail sales of cheap beers were up 5.4% over the same time frame a year ago, according to Nielsen data commissioned by beer industry consulting firm Bump Williams Consulting Co. The research was cited by The Wall Street Journal. By contrast, sales of cheap beers at the retail level fell 10.9 percent last year.
Sales in these two areas show the workforce is still stressed but now even more so because of inflation.
The Dollar gets a Raise
The US Dollar has seen a substantial increase against most international currencies so far this year. The U.S. Federal Reserves relatively hawkish position relative to its Central Bank peers, global “safe haven” status, and the Greenbacks relative resistance to commodity price shocks this year has helped fuel the greenbacks gains.
As a result, a number of countries including Portugal, Costa Rica and others are marketing to US workers who identify themselves as digital nomads.
In 2021, Costa Rican President Carlos Alvarado signed the law allowing travelers to stay up to a year with the possibility of extending for an additional year, according to The Tico Times. However, the program hit a few snags, causing a delay until early July 2022, when Alvarado finalized the regulations.
Now, foreign remote workers and their families can apply for the visa and stay for up to two years (which includes the year-long visa plus the one-year extension).
US companies who have a more liberal mindset on where workers are located may be able to take advantage of this in both their recruiting and retention strategies. The adverse is true as well: those who don’t may see great employees use their dollar and choose to work for organizations that will allow them to maximize their income elsewhere.
The Bleak Economic Indicators
The economy shrank for the second straight quarter, leaving the United States in what is generally, but not officially, considered to be recession. Gross domestic product fell at a 0.9% annual rate for the three months ended June, according to Commerce Department data, following a 0.4% contraction during the first quarter. While the job market is the strongest in roughly 70 years, with a 3.6% unemployment rate, other areas of the economy are slower amid higher inflation and rising interest rates.
New jobless claims have reached the highest levels in eight months, with a growing number of companies reporting layoffs. First-time filings for jobless benefits rose 7,000 to 251,000 last week, and continuing claims rose by 51,000 to 1.38 million, their biggest rise since November. The increases come amid signs that the job market is weakening: Ford is reportedly planning to let one-quarter of its salaried workforce in the United States go, and companies ranging from Lyft to Twitter are announcing cuts or hiring slowdowns.
A recession, or decline in economic growth, is typically defined as two consecutive quarters of declining gross domestic product. The pandemic recession in 2020 was the deepest and shortest on record. New unemployment fell for the first time in a month last week, but it remains near its highest point since November.
My advice is to stay close to your executive team as more economic trends point to a pending recession.
Giving economic updates used to be fun but it seems like we are teetering on some major trouble ahead. Stay tuned for more economic updates.
About me
and Sprint Recruiting
I joined the HR industry in 2004 after working as a sales leader in the Financial Services Industry for eight years. After spending his first couple of years in HR trying to fit in, I found my voice. Now I leverage all of the things I once hated about HR to become a consultant and invaluable partner to the businesses I support. I contribute to the HRGazzette and to DataDrivenInvestor on Medium. WARNING: my writing style is raw and in your face, not what you would expect from an HR executive.
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