How Inflation and a Possible Recession Are Leading to Hiring Concerns

Inflation and the possibility of a recession are leading to hiring concerns among talent procurement professionals and recruiters. According to SHRM, high inflation is leading to a "turbulent compensation environment" that is "wreaking havoc on workers' budgets, as pay increases fail to keep pace with rising prices."

In this article, we will explore how inflation is making it difficult for businesses to hire the right employees, and how a recession could make things even worse. We will also discuss some solutions that talent acquisition teams can use to overcome these challenges.

Employee Compensation Concerns

When inflation is high, it means that the prices for things are going up. This can also mean that workers might not be able to keep up with the cost of living, especially if their paychecks don't increase at the same rate as inflation.

Businesses can expect employees to ask for more money to make up for the difference. This can be difficult for businesses to afford, and it can also lead to inflation in the wages that businesses have to pay.

This is a concern for talent procurement professionals because it can make it difficult to find employees willing to work for established wages. Businesses may have to offer higher wages to compete with other companies, and this can drive up the cost of talent.

Talent acquisition teams need to be aware of inflation and its effects on the labor market so that they can plan accordingly.

The Prospect of Budget Cuts

Budget cuts could make it more difficult for talent managers to find new employees because they would have less money to spend on recruiting. This could mean that businesses would have to reduce their spending on things like advertising and employee referral bonuses.

It is also possible that businesses would have to lay off employees, which could lead to a decrease in the number of available jobs. This could make it more difficult for talent managers to find the right candidates for their open positions.

Talent management teams need to be aware of the potential budget cuts so that they can make plans to compensate. They may need to adjust their expectations regarding hiring and recruiting, and they may need to be more selective about the candidates they choose to interview.

Pay Discrepancies Between New Hires and Tenured Staff

When new hires demand higher pay for their work, it can lead to pay discrepancies between themselves and tenured staff, who may still be working on pre-established wages. This can lead to tension and resentment between new hires and tenured staff, and it can also make it difficult to manage the team's budget.

Talent managers need to be aware of these potential problems so that they can take steps to prevent them from happening. They may need to establish guidelines for wage inflation, and they may need to be more careful about how they allocate their budget.

In most cases, a review of agreed-upon pay rates among new and existing staff will be necessary to identify discrepancies.

Addressing Current Talent Challenges

Inflation and the possibility of a recession will continue to be concerns among talent procurement professionals and recruiters for the foreseeable future. Those in recruitment need to stay up to date on economic changes that could impact their industry.