On July 1, she was laid off from her tech startup job along with a few co-workers.
Sure, hiring has been a bit slow lately, but pauses are normal, she tells CNBC Make It, especially when people are on summer vacation. So when she received word from the staff via an internal memo, she didn’t expect it.
Big-name companies including Microsoft, Google and Meta are putting the brakes on hiring, giving way to fresh concerns about economic stagnation and a plunge in the job market. But hiring professionals, even those who have recently been laid off, say the recent tremors in the labor market do not indicate a mass contraction ahead.
A cold job market doesn’t mean a recession is inevitable
Employment and job turnover remain at record levels, yet 70% of Americans believe an economic downturn is on its way, driven by concerns about rising inflation, rising home prices and stock market volatility.
Sentiment data from workplace platform Fishbowl from Glassdoor shows a slight rise in employees citing keywords like “stagnation” and “layoffs” in their discussions.
Ali Kelly understands the concern. She is the Marketing Director for Employ, the parent company of several recruitment brands. But it says employee employment data shows further “normalization” in the labor market, as record vacancies have begun to stabilize to match the labor supply. There are currently approximately two jobs available for every unemployed worker.
She notes that layoffs and halting employment in certain industries and geographies are noteworthy and unfortunate for those affected, sure, but they also represent a “small slice” of the US economy.
“These happen to be very obvious areas: tech companies in Silicon Valley on the West Coast,” Kelly says. “Have there been some layoffs, pauses, or hiring freezes? Sure. Is it enough to affect the larger market? Certainly not.”
Recruits are still as busy as ever
Nearly half, 51%, of US companies with fewer than 500 employees have increased hiring levels this year compared to the previous, according to a June survey by the recruiting firm. Meanwhile, 46% plan to increase staffing for the remainder of 2022, and only 7.6% plan to reduce staffing until the end of the year.
“We’re still seeing job growth overall,” Kelly says. “We haven’t seen any verifiable data that suggests a real decline.”
So why are people so worried?
People have been quitting and negotiating for better jobs and higher wages at record rates last year, and workers know that those pressures on their employers won’t last forever. In other words, “People are waiting for the other shoe to fall,” says Kelly.
It is true that workers will lose some leverage if there are fewer jobs available in the coming months. But Lal Berry, who has been a recruiter and job seeker recently, says it’s still undoubtedly a market for the candidate.
“As a recruiting firm, this is the craziest market I’ve ever seen,” she says. She keeps hearing stories from her peers about job candidates falling behind days before they’re hired to start.
How do you know if a company is hiring responsibly
To be clear, Lal Berry doesn’t have a hard feeling about laying off her previous company: “It’s the nature of a Series A startup, so I knew in some sense anything could happen.”
I changed some of the questions I asked potential employers, though: Have you ever laid off workers in the past? If so, how do you deal with it?
Ginny Cheng, Career Contessa coach, agrees that it’s a good idea to ask a few additional questions about the company’s growth during interviews. “Be wary of descriptions like ‘excessive growth’ in the job description and dig deeper,” she says. “Learn more about the steps they take to support employee retention or how to grow responsibly.”
In general, she adds, “many companies may continue to take on key priorities even after a temporary layoff in hiring or even layoffs.”
Two weeks after Lall Berry was laid off, she accepted a new job as a talent acquisition and retention manager at another small company, this time in business consulting. She would rather risk a small business than a big one in order to make an impact.
“You’re going to have to take risks whatever happens,” Lal Berry says of changing jobs. “You just have to weigh the risks you are willing to take.”
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