Will A Recession Impact The Talent War?

As salaries rise and the difficulty of finding new employees increases, I have a feeling some managers are actually looking forward to a recession. Maybe not consciously, but the last recession gave companies reasons to rein back on information technology salaries, and brought some sanity back to the hiring process.
Of course, many companies took their cuts and pay cuts too far, but that’s a management issue, not a structural one. When your employees are able to demand $10,000 and $20,000 raises, or when you see people leave taking jobs for twice what you pay them, it’s only natural to hope for some wage relief.
Like a thunderstorm that cools off a hot summer afternoon, a brief deluge can give you some breathing room in your budget. There’s just one problem.
There’s no rain in sight.

According to the Hodes QTrac blog, demographics and the skills needed aren’t going to be favorable for companies if there is indeed a recession.
It’s also important to remember that as unemployment data hits the market, it doesn’t represent the “educated” workforce (Bachelor’s degree and above) but overall unemployment. So BLS reports overall unemployment is at 4.7%, but “educated” workforce unemployment is less than 3%.
While most HR/staffing professionals may hope a mild recession will help with labor shortages, they need to realize that the labor deficit is a demographic structural problem, not an economic cyclical problem.
The truth is there are more jobs available then there are candidates, and even the rise unemployment affects mainly low-skilled workers. College-educated unemployment is at 3%, easily below the structural unemployment rate known as full employment, and that means that even massive layoffs at your competitor aren’t going to help you that much.
The good news is that jobs are out there. If you’re a job-seeker that is struggling, that means the key to employment is doing a better job search. The bad news is that companies that try to profit from an economic slowdown are going to find there’s very little reward in squeezing wages or recruiting.
Article by Jim Durbin and courtesy of StlRecruiting.com

Originally posted by Candice A