Checkr’s panel of experts share 5 strategies to help organizations navigate today’s challenging economic environment.
America is experiencing unprecedented economic times. Despite low unemployment, both the US GDP and worker productivity declined in the first two quarters of 2022. As the Fed continues increasing interest rates to combat inflation, the economy is predicted to slow even further. With recession on the horizon, how can employers best weather the coming storm?
At Checkr’s Forward event recently, we tapped the expertise of Lee Ohanian, a Professor of Economics at UCLA and adviser to the Federal Reserve Bank of Minneapolis, and Naeem Ishaq, Checkr’s Executive Vice President and CFO, to find out. Ohanian and Ishaq discussed how market conditions are impacting hiring and how employers can respond. Below, we highlight five key actions they advised employers to take to navigate today’s turbulent economic waters.
1. Enhance worker productivity
COVID disrupted supply chains, employment and productivity in ways that continue to resonate across the workforce. Traditionally, economic growth results from an increase in the labor force or an increase in productivity. Ohanian noted that workers aged 25 to 54 have re-entered the workforce at levels comparable to pre-COVID times. Because unemployment is low, economic growth must come from higher productivity, he said.
How can employers boost productivity? New approaches to compensation and motivating workers, increased training to enhance worker skills, and innovative tooling can help. “Fully leverage the power of technology,” Ishaq advised. “Investment in software and automation is one of the best ways to drive productivity.” Software automation can help eliminate routine, manual work that reduces employee satisfaction and is subject to human error.
2. Evolve your recruiting strategies
The combination of slower economic growth and slower employment growth will require employers to focus carefully on talent. Are you hiring the best person for the job? The most productive person? Employers can widen their talent pool and increase team diversity by expanding recruiting strategies to include the over 77 million Americans with criminal records. Fair chance hiring practices that give former criminal offenders a better chance at employment can make your workplace more attractive to job seekers.
Hiring from within is another way to find the right people. As more employees seek to diversify their skills and experience, workers are increasingly open to making lateral moves within an organization, switching roles and even changing careers. Promoting open positions internally can benefit both your company and your team. Giving employees the chance to learn new skills makes your organization more competitive, enhances innovation and increases productivity.
3. Entice more experienced workers
The current economy offers the potential to increase the quality of your workforce by adding experienced employees—more than one-third (36%) of our panel audience said they plan to do so in the coming year. Today, 11 million more people are in the workforce than 20 years ago. Almost all of that growth is due to workers over age 60, Ohanian said. “Innovation has made it possible for people to work longer,” he explained. “This creates an opportunity to attract more experienced workers.”
Ease of access to talent varies depending on the type of worker you’re seeking, Ishaq noted. Hourly employees remain in high demand, but as the white-collar job market softens, recruiting for professional and office positions is getting easier, Ishaq said. Employers who take advantage of the opportunity to uplevel talent by recruiting experienced workers can gain a competitive edge. Layoffs and hiring freezes will also drive growth in the gig workforce, which tends to offer the flexible schedules and quick payment that laid-off workers seek as they search for full-time jobs.
4. Prioritize the right goals
As the Federal Reserve Board continues fighting inflation, interest rates will remain high and employment will decline, said Ohanian, who expects the economy to enter recession later this year. Continued volatility in the public markets, alongside real effects in consumer spending that will ripple through to the B2B side as well, present additional challenges. “The next six to nine months will be somewhat choppy. Waiting it out is key,” Ohanian said.
“Inflation is impacting costs, including compensation, which can make it harder to compete for workers,” added Ishaq. Your customers and competitors are likely taking a more thoughtful approach to investments and spend. In this environment, Ishaq advised going back to basics. “Consider reducing costs, repositioning or raising capital,” he said. Examine opportunities to invest further in talent and tooling. To address inflation, companies might experiment with their value proposition to make sure pricing reflects value.
“Running a business is not that different from running a household,” noted Ishaq. “Plan your scenarios well and understand how you may operate under different conditions.” Doing so early helps you to remain calm and clear-eyed, no matter what the future may bring.
5. Position your organization for growth
The US economy has always bounced back from recession, our experts noted. “Successful companies look inward during recessions to revisit goals and business plans and make needed changes,” said Ishaq. “When the economy turns around, they tend to grow really rapidly.”
While you can’t control the future, you can control how you operate in the future. “Be honest with yourself about what resources you have to put your organization in the right position,” advised Ishaq. “Make sure you stay solvent; then when
Steering a course to success
Today’s economic challenges can be an opportunity to uplevel and come out stronger on the other side, Ohanian said. “Be prepared to take advantage of opportunity.” Planning, prioritizing and people are key to riding out the storm and emerging a better, stronger business.
“It’s important to remember that even during difficult times, our people are our most important assets,” said Ishaq. Embracing innovation and using technology to automate hiring processes can help you hire better, faster and smarter, positioning your company for smooth sailing despite choppy seas.
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