Although a mild recession is predicted for later this year, the U.S. economy added far more jobs in January than was expected, and unemployment fell to its lowest in more than 50 years. Demand for labor is more robust than predicted, and revised 2022 and 2021 data show even greater job increases than previously reported.
The news builds on positive trends observed in Q4 2022. Still, economists advise organizations to stay cautiously optimistic, suggesting that slowing in the first half of 2023 may result in a mild recession by the end of Q2.
Our team recommends using this “calm before the storm” to devise workforce strategies to help your organization weather future economic challenges.
Calm before the storm
Some Q4 2022 economic indicators presented a positive outlook for employers:
Proceed with caution into the storm
Last quarter’s – and this January’s – positive economic indicators are only part of the big picture for organizations planning and implementing their 2023 workforce strategies. Employers should be mindful of the following labor trends:
Despite these cautionary trends, some employers plan to add new employees over the next six months, believing that demand for goods or services will rebound in the first half of this year, even after recent revenue decreases.
Utilizing fractional HR is an effective strategy for adding needed HR leadership without increasing headcount. hrQ has access to proven fractional CHROs that can quickly step in and make a positive impact. Learn more about our fractional HR services.
Weathering the Storm
In light of these conflicting indicators, organizations need to plan for any possible economic situation over the coming months. Employers should prepare the following strategies:
It is more critical than ever to have a nimble workforce strategy that can respond to whatever economic scenario may come. There is an urgency to build a more robust set of options and take advantage of the available opportunities for developing the agility and resilience to thrive through economic ups and downs.
For more advice on preparing your organization for the ebbs and flows of 2023, contact hrQ.
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