As economists and news outlets inform us daily, a recession is
coming – with some asserting it is already here. For many
companies this signals a major change to what has been a very tight
labor market.
Employers are well aware that during the economy's
recovery from the COVID-19 pandemic, the ability to hire and retain
talent has been a challenge. Compensation increases, signing
bonuses, and retention bonuses became commonplace in an effort to
attract talent where there were more open positions than applicants
to fill them. However, as the threat of recession looms, forward
looking employers should prepare for a change in course regarding
labor challenges. Contracting markets will force many organizations
– who just recently could not find enough employees –
to downsize their workforces. Taking steps now to prepare for the
possibility of future reductions will help lower risk for
companies.
