The Job Market – Today & Perhaps Going Forward

Disclaimer: I am not a economist

I’ve heard some business owners I know, many of whom are very smart and up to date on current affairs, tell me that the current hot employee job market is temporary. That the high wage requirements and hybrid work or fully remote work demands will go away once we experience a recession, and the employer will be “back in charge” of the situation.

Initially, this made sense to me, but as I’ve thought about it more, I’m not so sure business owners should be counting on this strategy. Why do I think this?

Inflation is not transitory as we were told. Most of us who were paying attention knew this all along. It may be around for a long time, if not permanent. This is evidenced when looking at the Federal Reserves yield estimates, with every metric from the 2-5 year and even the 2-10 year yields turning negative.

As a result, this has forced a reshaping of the go-forward working relationship between employers and employees.

According to a March 10, 2022, CNBC article on the topic of employment, there were 11 million open jobs in the US. And as of January, there were roughly six jobseekers for every 10 openings — or nearly two open roles for every available worker.

With the boomers and some x’ers having succeeded in their business/occupations and investments, many are choosing to not reenter the traditional workforce model. Some retire and travel. Others, turn their hobbies into small businesses, while others move into part-time consulting projects to keep their minds engaged and some spend money coming in.

If inflation stays high and salaries don’t adjust fast enough, there will be more workers choosing not to reenter the workforce and more leave altogether in my opinion. I also believe this is why we’re seeing more and more young people working a few side gigs to earn money while working wherever and whenever they want. Vs. going back to an office and incurring all the costs associated with the more traditional model.

The Covid lockdowns changed a lot of things, and people. I’ve personally witnessed extraordinary behavior and irrational decision-making by people who I’ve known for years to be quite stable and measured in their approach. It’s happened to all of us to some degree, but some more than others and it is a sad thing that was caused so unnecessarily.

However, I think the positive coming out of this situation is that it allowed all of us to reevaluate where and with whom we spend our precious time. In the same CNBC article, an interview with a San Francisco-based therapist commented that “the pandemic has made people reevaluate how they spend their time and who they spend it with.” She adds “people are questioning traditional workplaces where psychopathic traits in leaders, like seeking recognition, being self-centered and having a high sense of entitlement.”

I’m not so sure I agree with the commentary on “psychopathic traits” in leaders. Maybe that exists but in the small to medium size business market I’ve been in for the last 20+ years I find most hard-working, generous, caring, and supportive leadership. Owners who genuinely care about their employees and their families.

I think the “right” answer may be that we all just come to terms with the fact that situations and people have changed due to being locked down and stripped of our ability to live and work as we always had. Sure, some people are “broke” due to this and won’t ever fully heal. Then others who expect that given just a little more time, we’ll go back to the way it was. I don’t think we’re ever going back to the way it was. I think we will be weaving in and out of remote and office work, I think employees will continue to seek out positive environments for work and I think if employers and employees are transparent and communicative, we’ll be able to figure this all out as we go along.

Finally, I think if we stop judging each other’s motives and just set clear expectations for performance and pay fair wages for those expectations being met, we let people flourish whether that be working remotely or in an office or both.