Tag: Recession

17.0% of consumers said business conditions were “good,” down from 19.5% in June

According to the Conference Board Consumer Confidence Index, consumer confidence fell moderately in July following a larger decline in June.

It marked the third consecutive month of declines in the index, which now stands at a level of 95.7, down from 98.4 in June.

Lynn Franco, Senior Director of Economic Indicators at The Conference Board said that the decrease was driven primarily by a decline in the Present Situation Index. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist.

Franco said: “Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”

Inflation and surging gas and food prices remained top concerns for consumers and weakened their expectations, Franco went on to note. Meanwhile, purchasing intentions for cars, homes, and major appliances have softened further in July.

Present situation

  • Consumers’ appraisal of current business conditions was less favorable in July. 17.0% of consumers said business conditions were “good,” down from 19.5% in June. However, 24.0% of consumers said business conditions were “bad,” up from 22.8%.
  • Consumers’ assessment of the labor market was less optimistic: 50.1% of consumers said jobs were “plentiful,” down from 51.5% in June, and 12.3% of consumers said jobs were “hard to get,” up from 11.6%.

Six-month outlook

  • Consumers’ optimism about the short-term business conditions outlook was mixed in July; 14.0% of consumers expect business conditions will improve, down from 14.6% in June. Conversely, 27.2% expect business conditions to worsen, down from 29.7%.
  • Consumers’ optimism about the short-term labor market outlook was also mixed;15.7% of consumers expect more jobs to be available, down from 15.9% in June. However, 21.4% anticipate fewer jobs, down from 22.2%.
  • Consumers were more pessimistic about their short-term financial prospects. The index found 14.7% of consumers expect their incomes to increase, down from 16.1% in June, while 15.7% expect their income to decrease, up from 15.3%.
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60% of companies said they need more employees to manage their workload

According to poll data released by Express Employment Professionals, companies are becoming more hesitant to hire amid worries about a possible recession and other concerns.

Nancy Reed, an Express franchise owner in Texas said: “In our market, the big fear is a recession. Businesses aren’t confident in the future, and recession talk has employers waiting to see what will happen next.”

According to Reed, employers have been tolerating more absenteeism, tardiness and less experience, but that is changing.

“Now, they are holding off to see what happens,” she continued. “Managers will hire that skilled employee who is ready to come back but are holding off hiring any extra help until they see what will happen with the recession.”

Businesses aren’t panicking yet, but there are signs of cautious hiring, said Chris Cary, an Express franchise owner in Virginia.

Cary said: “In one of our markets, we are not seeing this rear its head dramatically at the moment, but in speaking with business owners and leaders, there is a sense of what is around the next corner with inflation and chatter of a recession.”

According to a poll by Express Employment Professionals that took place in May, 60% of companies said they need more employees to manage their workload but don’t have the capacity to hire them. Of those who lacked the bandwidth to hire additional employees, 48% reported it’s because their company is adjusting its recruiting/hiring strategy. In addition, 42% said their company is waiting to see if the workload will level out before hiring additional employees.

Other concerns: 32% said upper management has not approved hiring of additional staff, and 32% do not have enough money in the budget this year to hire additional staff.

The survey was conducted on behalf of Express Employment Professionals by The Harris Poll and took place between May 3 and May 23. It included 1,003 US hiring decision-makers.

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More concern around skills hiring than the recession

Despite concerns about the recession, most tech leaders are planning their recruitment around market growth, says new research from Talent Works. The research revealed that leaders are more concerned about skills hiring than a recession and that hiring, especially in the tech industry, is aligned to market growth.

Talent Works’ latest study, gauging attitudes towards hiring in an uncertain economic landscape, revealed that despite the chance of a recession, over 61% of the 500 US and 200 UK tech leaders surveyed said they are still planning their recruitment drives around the market growth they are seeing.

The findings of this research align with the most recent information from The Office for National Statistics, which reported that the number of job openings in the UK from April to June was 1,294,000. This is an increase from the previous quarter. These numbers are still higher than pre-pandemic levels, indicating that worker demand remains robust.

The research also showed that tech leaders are still experiencing challenges with finding the right talent. Forty-eight percent said they are concerned about a skills shortage and getting the talent and specific skill sets they need to grow their businesses. A further 37% of tech leaders believe that flexibility in hiring models is a top priority.

Jody Robie, Senior Vice President for Talent Works, commented: “We’re still seeing high levels of demand for roles across every sector, including technology,”

“However, businesses need to find the right people within their budget to meet their growth predictions. We’re also seeing more businesses opt for flexible and embedded recruitment outsource (RPO) models as a way of extending their in-house talent teams. Beyond just getting resumes and hiring fees, this model allows them to understand the market and provides insight into the perception of their employer brand. It’s helping them to focus on growth, not recruiting, and it makes economic sense to establish a flexible sourcing relationship during a time when businesses need agility now more than ever before.”

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Data reveals a slowdown in hiring in May and June

A recession may become a reality sooner than expected, suggests new data from the Association of Professional Staffing Companies (APSCo). The research reveals difficulties in the UK’s labour market.

Traditionally, June showed a recruitment spike ahead of seasonal drops in July and August. This year, however, although numbers improved slightly in May, the latest research showed a slowdown in hiring between May and June, suggesting further drops in the summer months.

APSCo’s June research suggests that the economy is feeling the effects of Government uncertainty, a cost-of-living crisis, and substantial skills shortages.

According to the report, the number of permanent vacancies added dropped by 12% month-on-month in June, and the number of contract positions fell 11% year-on-year. It appears that permanent roles are on a downhill trajectory, down -2% between June 2021 and June 2022. Contract roles, however, increased 5% in this period.

Compared to pre-pandemic data, the number of permanent jobs being created dropped by 9% between June 2019 and June 2022, suggesting that the stability of the country’s hiring market and the economy is taking strain.

The report also revealed that placements dropped month-on-month for contract (-9%) and permanent roles (-7%). In terms of permanent salaries, the report showed a 2% increase month-on-month, but -3% decline, year-on-year.

Ann Swain, CEO of APSCo, comments: “A slowdown in hiring following the post-pandemic boom was to be expected, but in the current market and with talks of a potential recession in the pipeline, this decline is of concern. The UK’s post-COVID economy has been hit with employment strikes, skills shortages, Government uncertainty and a cost-of-living crisis. With controversial changes to rules around using agency workers during strikes voted in and the country facing continued uncertainty alongside Governmental leadership changes, employers and the recruitment sector have been hit hard. Stability is crucial as we continue to navigate such an ambiguous market. As the trade body for the professional recruitment sector, we believe that there is more to be done to make the UK’s employment sector competitive on a global scale. With recruitment activity slowing, we could be at a tipping point that sets the country on a downward trajectory unless swift action is taken.”

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A recession should not have any impact on staff turnover or retention

Predictions of a spiralling economic crisis will be another blow to businesses’ hiring headway but according to Steven Jagger, founder of tech recruitment firm Maxwell Bond business leaders should “revamp” their culture in order to weather the looming recession and avoid a Great Resignation 2.0.

The arrival of the so-called Great Resignation this year hit the headlines and saw UK businesses’ staff turnover and attrition rates hitting record levels. But experts are forecasting another blow once the impacts of inflation, the cost-of-living crisis, and the recession come into full force.

Steven Jagger, Founder, Maxwell Bond commented: “An economic crisis shouldn’t leave you clutching at straws and panicking. Staff will always be loyal – if you give them reason to be. Employees don’t leave workplaces and colleagues – they leave bad leadership, toxic culture, or a lack of vision for your team and business. Ask yourself, when was the last time you looked at these and revamped your vision?”

Jagger was quoted saying that while a recession would be another blow to businesses when they’re already down, it shouldn’t have any impact on staff turnover or retention if your business’s culture is right.

The founder of the award-winning tech and digital recruiter whose clients include the BBC, Reckitt Benckiser, Barclays, TalkTalk, and Mastercard, believes talent retention “is a skill in itself” and that many leaders “fail to see the importance of it in times of adversity”.

Jagger continued: “By industry standards, we should have experienced higher attrition rates than we have to get to these numbers, but we founded the company on the values of prioritising people, especially our staff, above anything else.

“A recent Deloitte report shows only 56 per cent of employees think their company’s leadership cares about their wellbeing – contrasted to 91 per cent of leadership believing their employees think they care. This disconnect is a big player in staff turnover.

“Companies need to go the extra mile to attract and retain candidates if they want to hit their hiring aspirations, stay ahead of their competitors, and weather the incoming storm. In times of adversity, it’s understandable that survival instincts are to slash headcount and starve spending – but this short-term logic leaves firms bare once the turmoil is over.

With that being said, he understands employers can be afraid of the “T word” (turnover), wrongly perceiving that it reflects their leadership and values: “Some level of turnover, whether facing economic hardship or not, is part of any healthy organisation. If you train people up, they may leave to progress further and take on a higher role or they may be poached by another company for their skills and talents.

“Either of these scenarios means that as their employer, you did your job properly. Remember: running water never goes stale.”

But Jagger says to take heed: “Retaining someone who doesn’t fit the company values can easily make the whole infrastructure fail,” he says. “Put a bad apple amongst good apples, the good ones will eventually turn bad and leave.”

Maxwell Bond has grown by 4,000 per cent since its inception five years ago, despite weathering numerous economic crises, and has seen a further 45 per cent increase just in the last six months. The firm took no financial support from the government during the pandemic.

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