The current and future state of the job market is uncertain. While some major corporations impose hiring freezes and layoffs, there are still more job openings than job seekers. What does this mean exactly? In this episode of the Hire Calling Podcast, host Pete Newsome and HR expert Ricky Baez discuss this topic and their predictions for 2023’s workforce.
Their job market predictions are based on data from the Bureau of Statistics and articles from the Wall Street Journal. Some expectations they anticipate include continued growth in the freelance market and a more prominent role for AI in the workplace.
Tips For 2023 Employers
- Be financially prepared for any situation by treating your business budget like your personal one. Prioritize budgeting and prepare for emergencies and potential financial difficulties in the coming year.
- Keep your employees informed by communicating openly and transparently, whether the news is good or bad. Give them advance warning and discuss the status of the organization with them.
- Maintain transparency with your employees, especially during the holidays, to avoid uncertainty and worry. Though there may never be a perfect time to share information, the business often picks up again in January.
Employment Trends and Predictions
1. The freelance market and gig economy will continue to grow
As companies strive to attract top talent, they will increasingly turn to freelancers. Candidates who value flexibility will also be drawn to freelance work if companies continue to implement compressed schedules.
2. AI will rapidly evolve and change the way we do our jobs
As AI technology advances, it will automate more tasks that were previously done by humans, but it will also open up new possibilities for those who adopt it. It may eliminate some jobs, but it will also create new opportunities for those who are willing to learn and adapt.
3. There will be more layoffs
Prepare for potential layoffs by creating an emergency budget and keeping open lines of communication with employees. Being transparent and proactive can help mitigate the negative impact on your business and workforce.
- 2023 Hiring & Salary Guide
- Guide to Creating Recruitment Goals for the New Year
- Best Freelance Websites to Find Top Talent
- 12 Recruiting Trends for 2023
- Everything You Need to Know About AI Recruiting Techniques
- Takeaways From the 2022 Job Market
- Look Into The Latest Jobs And Unemployment Reports
Pete Newsome 00:00
You’re listening to the Hire Calling Podcast. I’m Pete Newsome. And this is your source for all things hiring, staffing, and recruiting.
Pete Newsome 00:06
Back again with Ricky Baez. Ricky, how are you this morning?
Ricky Baez 00:09
I’m doing great. Pete, you know what I’m going to ask you, I want you to ask me why I’m doing great.
Pete Newsome 00:14
So Ricky, why aren’t you doing so great?
Ricky Baez 00:16
Well, you know, my mom’s in town for the holidays in, there’s just one Puerto Rican dish that I maybe have once every four years.
Ricky Baez 00:24
And that’s Mofongo. Have you ever had that?
Pete Newsome 00:27
No, I haven’t. But I want to clarify, you’re not calling your mom the Puerto Rican dish?
Ricky Baez 00:37
No, no, you’re because that’s weird, man.
Pete Newsome 00:39
This is his audio. We gotta keep going. Stay with me.
Ricky Baez 00:44
Well, you caught me off guard with that. No, so my mom cooked an awesome Puerto Rican dish in his cold Mofongo.
Ricky Baez 00:52
And actually, it’s more African than anything else. But it’s mass plantings where garlic is so good.
Ricky Baez 00:57
I’m just happy that I finally got to eat some Mofongo for the first time in a couple of years. So I’m gonna a happy camper right now.
Pete Newsome 01:03
I am not going to ask you to spell that.
Ricky Baez 01:06
I’ll send it to you. Well, we’ll have a Mofongo show. And I guarantee in a couple of weeks, we’re gonna have some more fun with q&a.
Pete Newsome 01:14
We can have some q&a, a lot of layoff talk going on right now. And but were we well, what we wanted to talk about today, and we still will talk about today is the expectations for 23.
Pete Newsome 01:31
For 4 Corner Resources, we just put out our 2023 Hiring Guide, which we’ve been doing for four years now.
Pete Newsome 01:38
And it was backed by popular demand. And it’s a really difficult year to make a lot of predictions.
Pete Newsome 01:46
In fact, I’m not comfortable making any predictions really, it’s because of so much uncertainty from our economy here in the US to geopolitics that is taking place in just strife and war and inflation and a lot of just unrest.
Pete Newsome 02:08
So, man, it’s going to be an interesting year. And you know, here’s the thing right now. It’s because we have had a lot of recent layoffs.
Pete Newsome 02:20
You and I were just talking before we started recording about peloton sort of kicked it off. It feels like earlier in the year with the layoffs.
Pete Newsome 02:29
And then it’s happened with a lot of the tech companies recently Washington Post, I believe, two days on announced, yeah, significant layoffs there. It’s rapid.
Pete Newsome 02:42
But at the same time, the Bureau of Labor Statistics Data indicates that the job market is still really strong.
Pete Newsome 02:49
Oh, you’re you don’t like that? Well, why not?
Ricky Baez 02:52
I just don’t understand how both of those things can go the opposite way. How is the job market so strong, but we’re continuing to experience these layoffs?
Ricky Baez 03:03
I just don’t understand what element or variable in that equation is making it go the opposite way.
Ricky Baez 03:11
Shouldn’t those two points follow each other?
Pete Newsome 03:14
Well, yes and no. So the data tells a story.
Pete Newsome 03:18
If you look at the past 15 years, which is what the jobs report shows, you’ll see that we typically have about 5 million openings in the US, and post-COVID we’ve averaged over 10 million, so we have a long way to drop.
Pete Newsome 03:37
And then we also have really low unemployment, because there are so many job openings, and there have been so many jobs, a lot of people exited the workforce is probably the easiest way to phrase it during COVID.
Pete Newsome 03:51
Now there’s a lot of talk about why that’s happened. A lot of theories. The one that I think doesn’t get mentioned enough is that this coincided with when a lot of baby boomers were already expected to retire.
Pete Newsome 04:04
And you and I’ve talked about that on the podcast before how the great resignation was.
Pete Newsome 04:10
Everyone associates that with what was going on post-COVID. But in reality, that term was coined in 2019.
Pete Newsome 04:18
And so it was really just unfortunate timing. Well, depending on how you look at it, if you’re a job seeker, it’s not unfortunate at all.
Pete Newsome 04:27
For employers, it’s been difficult too, to retain staff to at times hire staff. They’ve employers have been forced to increase wages to attract staff. Right.
Pete Newsome 04:40
And we’ve talked about that as well. So there are all these things happening at once. But the data makes it pretty clear that we have a lot more openings than we have had historically and fewer job seekers.
Pete Newsome 04:51
So there are about 6 million people on the market for 10 million openings so we have a long way to fall I guess that is the best way to But when a company or these companies are announcing big layoffs, but you add them all up, and it really doesn’t make much of a dent in the number of openings overall.
Ricky Baez 05:08
No. So what I’m hearing is, is that the numbers we’re seeing it’s, I guess what I’m calling out like a large number of layoffs and at the same time, large numbers of job growth, or job opening, I guess this is the result of the anomaly of 2020.
Ricky Baez 05:25
That’s what we’re gonna have to call the anomaly of 2020.
Ricky Baez 05:28
Because it’s what, really, what, really gave me that in the case that I’m like, this is a little bit off was Amazon, when Amazon said, we’re cutting jobs right before when they’re there, their Black Friday is upon them. That really surprised me a little bit.
Ricky Baez 05:44
And then I started thinking a little bit more, I’m like, wait a minute. So Amazon is doing this right before the holidays that they work all year to prepare for.
Ricky Baez 05:54
They severely underestimated how many people they’re going to need in this and are really underestimating what the customers are going to do. Two years post COVID
Pete Newsome 06:02
Well, I think it’s I think that Amazon’s story is not dissimilar from the peloton story where the peloton just experienced incredible growth during COVID When everyone was home and couldn’t go to the gym.
Pete Newsome 06:18
Therefore, peloton sales go up, and couldn’t go to retail stores, and either, therefore, Amazon’s sales went up.
Pete Newsome 06:27
And so Amazon hired a lot of people to accommodate that. But now this holiday season, people I think like getting out and going back into stores. And we’ve talked about that a little bit.
Pete Newsome 06:37
I look, I don’t I don’t want to get deep into this because I’m not knowledgeable enough on these particular businesses and what their operations are really about.
Pete Newsome 06:47
But it makes sense from the outside looking in that what happened during COVID. There were reactions to that.
Pete Newsome 06:55
And then what’s taking place post COVID As we get back to a normal environment, and in places like Florida, where we live, it’s been normal for over two years now, practically, but Well, I think it’s selectively been normal.
Pete Newsome 07:11
I mean, that’s a giant X Factor, and that is such a bigger factor than the layoffs we’ve seen to date. Now, the big caveat there is, what are we going to see? What are we going to see in January and beyond?
Pete Newsome 07:11
I’ll say that is because if I look back, even a year ago, through 2021, we of course, it was far from normal for us, however, as that’s happening, then we are you know, things are equalizing except the problem are we have a lot fewer people in the workforce.
Pete Newsome 07:46
As we as inflation continues to be really high. The Fed raised interest rates two days ago, again, half percent?
Pete Newsome 07:58
So we’re far from out of this, and many people still believe that we’re heading toward a recession. So I don’t think it’s while things are good. Now, I don’t know that they’re going to remain good in the job market. Do you agree with that?
Ricky Baez 08:13
I agree with that, I think I think there’s still another shoe to drop. But what I’m looking forward to is competition, because if you take a look at all these jobs, these are not low-level positions that are being cut.
Ricky Baez 08:27
These are highly skilled positions in that world in the web, one web to web three world.
Ricky Baez 08:32
And now that it’s web three is coming up and becoming more relevant, then I think what’s going to happen in 2023, is that that divide that we have right now between candidates in hiring authority, I think it’s going to get thicker, to be honest.
Ricky Baez 08:49
Because I think we are going to have some organizations that are still going to hold true to the legacy scheduling system.
Ricky Baez 08:57
And you’re going to have a lot of people out there that are going to want more of the flexible scheduling system as an example. Right.
Ricky Baez 09:05
So I really think what this competition that’s back and forth was going to do in 2023.
Ricky Baez 09:10
It’s going to force organizations to come up with really creative and out-of-the-box compensation programs to attract top talent that’s out there right now.
Pete Newsome 09:19
Well, there’s so much going, on with you, on one hand, unemployment is really low. On we have the freelance market that is continuing to grow in popularity, and that will continue because it just makes sense.
Pete Newsome 09:39
Right? And so the larger the organization, the more they’re going to struggle with those changes, probably.
Pete Newsome 09:47
But yeah, it’s it there’s a lot of there’s a lot of moving pieces and parts of this right now, that’s for sure.
Pete Newsome 09:53
And I’m not really comfortable making any prediction on what I just don’t know or have a feel for it, which normally you see trends.
Pete Newsome 10:03
But the trends to your point earlier, are very contradictory.
Pete Newsome 10:06
And I think one of the things that’s relevant to mention and being a staffing professional, this is meaningful to me in a way that would probably not be to people outside of the industry is just because you see a job opening or a company claims to have a job opening if they’re not actively working to fill it.
Pete Newsome 10:26
Is it really open?
Pete Newsome 10:27
You know, does it count? And so those jobs do appear in the BLS data. But I’m skeptical of the true number to your point.
Ricky Baez 10:40
It’s, I just want I just rather wait till next year and see what happens again, I’m really sad about that competition of talent, and the White House is going to change the landscape of recruiting.
Ricky Baez 10:51
I’m really curious about that. So we’ll see, we’ll see him. And now again, I was just reading, I was just reading an article in The Wall Street Journal the other day about people trying to decide whether this is a good time to quit their job and make that jump has never been easier than before.
Ricky Baez 11:07
And I think I sent that to you because I’m like, were we not just talking about this a few weeks ago, it we talk about something and next thing, you know, the Wall Street Journal, does it.
Ricky Baez 11:16
There’s a mic in here? Well, there is a part of you. And I have some more Mofongo, please.
Pete Newsome 11:26
This is not the most private of conversation.
Ricky Baez 11:28
No, but it’s you’ve got more and more people and more and more opportunities right now to go out and do your thing.
Ricky Baez 11:37
And if you and I would have this freelance conversation in five years’ week, I guarantee we’re gonna be talking about much bigger numbers by leaps and bounds and what we’re talking about right now.
Ricky Baez 11:47
I’m wondering how many more layoffs do we see. How many more layoffs are we going to see going forward? Not just by the business? Because this is another article I read is how crazy AI is getting you and you sent me an article?
Pete Newsome 12:03
I wrote an article about it. I interviewed the chat GPT and wrote a blog. Did you not see that?
Ricky Baez 12:11
I think I saw that one. I think I saw that my biggest you posted it and you tagged me on it.
Pete Newsome 12:18
I interviewed chat GPT have you played around with that yet?
Ricky Baez 12:25
I’m kind of afraid. I’m afraid I like it too much. And it’s going to take over a lot of my creative processes.
Pete Newsome 12:33
It’s interesting, I’ll just say that it is incredibly impressive and powerful.
Ricky Baez 12:41
That’s the scary part.
Pete Newsome 12:43
It’s terrifying if you start extrapolating where all this is heading.
Pete Newsome 12:47
And in that, it appears that we I’ve looked at some AI writing in the past, and it’s prior to this, it’s always been pretty apparent that it wasn’t written by a human. This is an entirely different level from anything I’ve seen.
Ricky Baez 13:04
I haven’t played around with it. But I have seen some examples. And some examples where it’s kind of scary is that it does take away the human creative process.
Ricky Baez 13:15
And I’m afraid that the more we do that, like Okay, right now, how many people do you know right now that can write cursive? Not many, not many, right?
Ricky Baez 13:26
You and I can, but not many. This is an art form that was lost, right? Even print. Here you go write a book here to save your life in cursive, it’s not going to work out.
Ricky Baez 13:37
I think the same thing is going to happen with this, that we’re going to rely on it so much that at some point, we’re not going to be equipped to be creative enough to come up with things come up with solutions unless it has an algorithm attached to it.
Ricky Baez 13:53
And that’s all AI is just, you know, a geometry equation. I mean, yeah, geometry algebra equation.
Pete Newsome 13:59
You know, I’m sure there were people who weren’t thrilled when the horse and buggy went away, either right or, you know, me all the way back then.
Pete Newsome 14:08
Well, I mean, yeah, yeah. I don’t know how to write on a cave wall. I don’t know how to tell a story on a cave wall, either. But I would, I would argue that there are benefits to that.
Pete Newsome 14:19
And I think what I find scary about it is not being able to tell the difference. And so I do think it makes humans better, right? If we don’t have to do the most basic of tasks.
Pete Newsome 14:32
It allows us to add layers on top of that and enhance and improve what we were previously doing right. I mean, we get places a lot faster because of technology.
Pete Newsome 14:42
We can accomplish a lot more and this just can add to that. But what is bothersome for me is that I can’t separate what’s real and what’s not. Right, that’s the scary part.
Ricky Baez 14:57
And if you know about crypto why not take this conversation there? But I can really see this being big in the pair-chain crypto market.
Ricky Baez 15:08
So if you want to start a contract some kind of a contract, a smart chain contract you use that AI program creates a contract for you and puts it on the blockchain for you.
Ricky Baez 15:18
It’s getting I see this being part of a financial transaction, making it that easy in about 10 years. It’s because what I see this doing, it’s for HR and legal professionals, it really is going to take a big chunk out of that, again, create a process to put together contracts, training, even training, is does a really good job with it. So it does its humans.
Pete Newsome 15:46
So I have to caveat it. You said crypto, which means I have to say it’s not don’t stay away from crypto, it’s just Bitcoin, everything else? Oh, yes, I know. But I have to caveat it.
Ricky Baez 15:57
I believe blockchains, though, I think that hasn’t Well, that’s another show.
Pete Newsome 16:00
Sure. Sure. Yes. It’s but don’t leave you don’t leave your money on exchanges there. And don’t do that. Yeah, don’t do that.
Pete Newsome 16:08
So yeah, it’s, it’s, it’s really wild. I don’t know how we started talking about that, in particular, other than whether is AI going to take jobs from people, sure.
Pete Newsome 16:17
But they’re hopefully going to have better jobs as a result. Right. And that’s, that’s the goal. So when I did the interview with it, so to speak, it lacked the nuance that is necessary.
Pete Newsome 16:30
And it’s sort of like when you see programs in applications that profess to take bias out of the recruiting process, right, let’s just match based on need, and want, and take the individual bias out of it.
Pete Newsome 16:48
And I find that bothersome because I don’t want to hire someone just based on there, whether they could do the job, I want to hire someone whether I want to be around them while we’re doing the job, whether I like the way they do the job, the way they present themselves, the way they interact.
Pete Newsome 17:05
Now, certainly, there are jobs where human interaction isn’t necessary.
Pete Newsome 17:10
But I don’t necessarily see that as a good thing, I think you have to get but I think people are too unique and have too many wants and dreams and desires and goals and objectives and habits good or bad.
Pete Newsome 17:23
All those things that you just can’t find on a resume are that you have to have the human element. So bias is necessary for the hiring process, I believe,
Ricky Baez 17:37
well, let’s define that. It is necessary, right? If we weren’t discriminatory and biased, we wouldn’t be doing our job as talent acquisition professionals.
Ricky Baez 17:49
Now we are biased and discriminatory legally, right? Because it’s here’s what we do. We got several resumes. This that qualifies this doesn’t we just were biased on the resumes that have the qualifications that we’re looking for.
Pete Newsome 18:03
Yeah, let me just say, I mean, we tend to Gosh, human is the English language has been, we’ve changed the meaning of words so much over the past few years, right?
Pete Newsome 18:16
I am biased against people who communicate poorly when I’m hiring a recruiter. And I will discriminate.
Ricky Baez 18:24
Okay, it sounds bad.
Pete Newsome 18:27
But it does sound bad. You don’t understand the definition of the word. Right. And so this is in it’s funny. This is so off-topic. But I like you probably have to wonder at times, do I need to be concerned that I know how how to you know that I know what these words mean?
Pete Newsome 18:43
Because my audience may not be right. I don’t know, I don’t want to live. I don’t want to live my life that way.
Pete Newsome 18:49
So yes, I applied bias regularly to hire, as do, as does everyone else, whether they know if it’s healthy and good and well intended and for the right reasons.
Pete Newsome 19:05
Of course, I should apply if right, I want someone better than someone worse. That’s the way it kind of is.
Ricky Baez 19:13
It’s just common sense. And we do need that as human beings. That’s why I hope this AI technology continues to evolve way faster than we would like.
Ricky Baez 19:24
I think what you said make sense to a point to me, you said about five minutes ago that the more jobs evolve, and the more AI takes jobs, that creates more opportunity for other people.
Ricky Baez 19:39
I’ll pause on that to say that creates more opportunities for the people that embrace it. Because there are going to be some people who are not going to embrace it.
Ricky Baez 19:48
And those are the folks who are going to feel that pinch right now. I know I just said I just communicated my disdain for it doesn’t mean I don’t embrace it. I’d like I like innovation. I like technology.
Ricky Baez 20:00
Do you want to juice properly? It’s just too close to Skynet. And if you start if I start talking through a program that resembles a human, for me, that’s kind of scary for a lot bigger reasons to just work.
Ricky Baez 20:12
Right? Because you’re right, I’m going to want to know, I’m going to want to know who I’m talking to in the other line. Well, be a man.
Pete Newsome 20:20
And today, you already can’t. That’s when you look at some of the deep fake videos that are out. You cannot differentiate those in any way
Ricky Baez 20:31
have used heat. Those things are scary because I see I saw one for Elon Musk. And I’m like, wow, that looks like him. It sounds like him.
Ricky Baez 20:41
But it was somebody showing off how they can create those videos. And it is really hard to detect. So it’s in that’s now 20, the end of 2022. might say it’s impossible starts coming out. What wasn’t possible?
Pete Newsome 20:58
It’s possible that attacked, you’re not gonna know the difference. Yeah, yeah. There’s just no possible way. Alright.
Pete Newsome 21:03
So look, we’re killing this whole show talking about things off-topic, what we were going to talk about was 2023, which we did, but also this article that came out in the Wall Street Journal yesterday, that asked why companies have layoffs near Christmas.
Pete Newsome 21:24
And so I think that there’s a lot to the ad, right? It’s a simple headline. But there’s so much into it. And the biggest one being Christmas coincides with the end of the fifth calendar year, which is more often than not the end of most companies’ fiscal year.
Pete Newsome 21:45
So Christmas is an unfortunate time to for a company to be in financial trouble, right? I think that’s really what this is all about.
Ricky Baez 21:59
So you’re talking to somebody who’s done who’ve put together a lot of layoff packages, a lot of processes.
Ricky Baez 22:05
And let me tell you, it always comes down towards the end of the year for the sole reason of budgeting, budgeting, budgeting, budgeting, what mistakes do we do at the beginning of the year with a budget because at the end of every year, organizations look at what’s the budget for today for the following year.
Ricky Baez 22:23
And we need approval for that once we get approval from the corporate executives, we got to stick to that budget. But what happens if we’re not on track to get there or not get there in some of those fiscal years that coincide with the end of the calendar year?
Ricky Baez 22:37
So around the end of summer, the beginning of fall, we start to have a really good picture, of what the end of the year is going to look like and that’s the question, right? Do we execute this layoff before or after Christmas?
Ricky Baez 22:51
There’s no right answer to that.
Pete Newsome 22:53
There’s no good answer, right? That’s, yeah, because we’re talking layoffs. There’s not there’s never a good, good, and that’s for the employees.
Pete Newsome 23:03
And I’ll tell you when I read this article I saw that you and I both get the same messages or alerts for the journal when they come out.
Pete Newsome 23:12
Over the years that when we find out at the end of a week that we have to cut an employee in contract employee at any given time we have hundreds of contract employees with 4 Corner.
Pete Newsome 23:27
I have the same thought every single time do should we should we give them the news on Friday and, quote, ruin their weekend? Or give it to you know, wait to give it to them.
Pete Newsome 23:42
So we don’t ruin their weekend? Or I always think do I want to give it to them before the weekend? So they don’t go out and spend money that they are counting on that’s the problem is no longer coming in.
Pete Newsome 23:51
Without exception I have that say I’ve had that same thought every time it’s come to my attention over the years. And to this day, I still don’t know what the right answer is. I don’t know what better it will get.
Pete Newsome 24:01
As we just said there is no right answer. I don’t know what the better answer is.
Ricky Baez 24:05
Here’s the better answer because either way, either way, it’s a financial risk because for the employee who’s about to be affected. Right, because if you do it before Christmas, right, then you ruin Christmas for the families. Do you know what I mean?
Ricky Baez 24:20
If you do after Christmas, then they’ve already spent money that they otherwise wouldn’t have spent right. So here’s what we do. Right? And I’ve made this suggestion before some people have taken it some have not, if you’re going to do it over the holidays include a 10% Bump include a 10% Bump.
Ricky Baez 24:37
So when you’re putting that plan together go to the financial executive to let them know how much this package is going to cost including a 10% Bob holiday fee or tax.
Ricky Baez 24:47
That way you give the employees a little bit more than normal for that holiday co tax is still going to be a tough pill to swallow, but it’d be an easier pill to swallow.
Ricky Baez 24:58
That way they know how any month, you’re gonna get for severance, and none of that’s going to be used for whatever bills they had. Just here’s a holiday tax for you to take it with it, it’s still going to be harsh.
Pete Newsome 25:08
Well, you’re assuming that I think in this equation that companies have accrued dollars in anticipation of the layoff. And I don’t think that is typically the case, because you’re having a layoff because you’re having financial difficulty. The preset may not be, you know, probably isn’t available, or that’s only going to make the financial challenges worse.
Pete Newsome 25:35
It’s a tough one because it’s in you. And I kind of end up here a lot, because we try to balance the perspective of both sides.
Pete Newsome 25:47
And no employer, right, this faceless, nameless thing, it’s people, right? And then underneath the brand name, it’s people. And yes, you could say, well, and this is always the argument, while these executives and these companies are still, you know, they’re still taking their money, right?
Pete Newsome 26:08
And now a lot of times, that doesn’t happen. And I can tell you as a small business owner, as a much smaller business owner, at the end of the day, whatever’s leftover or not, is what you end up with, right?
Pete Newsome 26:21
And sometimes, that’s a negative number. And that can happen. I don’t want to go into that right now. But that’s the reality of it.
Pete Newsome 26:30
And so it’s just not as simple as saying, well, let’s just be more generous, because we want to be, of course, you want to be, but if you don’t have the ability to be, well, how do you handle it?
Ricky Baez 26:42
So how do you have the ability to be so you know, so this is for all the organizations out there listening, you treat it just like you treat your budget at home, you got to have an emergency budget, you have to have a line item in your p&l that says in case of blank happens, right?
Ricky Baez 26:58
Some people don’t some people do. Now, obviously, people say that, if you have that line item in your budget, in your p&l, they shoot you dip into that first before you start cutting heads. I mean, makes sense. Right?
Pete Newsome 27:14
Well, this sounds like you know, dipping into the strategic oil reserves, right? That’s been happening over the last year, right, like, well, how’s that help? And later?
Ricky Baez 27:23
Yeah well, you just ship by, you know, by an electric car that a battery costs $28. I read that article for $20,000. That guy had to spend for a battery for a Chevy Volt well, anyway. No. So it depends on the company’s plan for it. Right? Nobody ever wants to plan for layoff. But that’s an emergency like nobody ever plans to get into an accident used to put on a seatbelt.
Pete Newsome 27:48
So it’s yeah, we treat it like insurance, which is smart. I mean, on paper that makes complete sense. I don’t actually know the I mean, it you know, how many companies would you estimate, have that reserve.
Ricky Baez 28:03
You know, have not many.
Pete Newsome 28:06
In your personal life, you say what, six months, six months, or worth of income is what you should have reserved? How many people actually have that? I know, there are statistics about I think it’s a pretty small number, pretty small number. So yeah, could companies maintain a reserve of 10% of their payroll? That’s what you would recommend, which is, which makes sense.
Ricky Baez 28:30
But why not? What, not 10% of the payroll for everybody, right? It’s you, you come up with fake scenarios. And you’re like, Okay, if, in October, we had to lay off 2% of our payroll, which means 200 people, right? How much is 10%?
Ricky Baez 28:46
Whatever number we’re put, because before, when corporate comes out and says you got to X X amount of percent, you got to go do some homework behind the scenes and trying to figure out what you can move around to avoid affecting people’s lives, right.
Ricky Baez 28:59
So you obviously start off with empty positions that are your budget for cutting those bad boys out, and you start moving some things around, you work with your old D person to move some things around and save some cash in the event.
Ricky Baez 29:09
You can’t do that. Then you got to put together that number and say, Hey, what we’re doing here is going to cost save us this much a what to say was this much but it’s gonna say was this much because we’re working this little bonus in there?
Ricky Baez 29:22
Again, it’s just an idea. Some clients have taken it some have not really depending on how the plan throughout the year. But now real quick, what does that say for you as an individual?
Ricky Baez 29:32
Because we talked about this on the other episode? Always be ready. Always be ready ABR.
Pete Newsome 29:40
Yeah I mean, there are so many factors that go into this from public company considerations to small businesses and owners have had to pay taxes on that information. I mean, it’s just, it’s not that simple.
Pete Newsome 29:50
And so, being ready. Yes. In theory, but is anyone really ready? You know, Clark Griswold should have been ready to not receive his bonus. Right? If it was, it wasn’t, it was, he wasn’t really ready because he countered on it.
Ricky Baez 30:12
Right? Everybody down here for the first day.
Pete Newsome 30:15
Throw in the Christmas vacation reference, but so you know, what I think about these scenarios, though is how much you should to the company, communicate with their employees, give them warning give you talk about it in advance, and I’ve always erred on the side, for better or worse of trying to be transparent with those things.
Pete Newsome 30:37
Like, hey, if times are great, I want everyone to know, if times aren’t so great. I want everyone to know that too. And proceed accordingly. Right.
Pete Newsome 30:49
My hope would be that as a business owner everyone rallies together and figures and figures it out and, and works together to solve whatever challenges lie ahead.
Pete Newsome 31:03
But on the other hand, it’s okay, let me I’m I just have always wanted to be transparent, because so much of how I’ve developed my business is what I wanted as an employee.
Pete Newsome 31:17
And I wanted, I wanted that open communication, I found it was very hard, any layoffs would happen, you’d hear rumors, and then it would actually take place.
Pete Newsome 31:24
And all of a sudden people who were there yesterday are gone today. And that was just an awful way to live. And I thought, Man when I start my company, I’m going to have to make it so no one ever has to wonder where they stand. Right?
Pete Newsome 31:36
They never have to question whether they should be worried. But if there is a reason to be worried, whether it’s because of performance or any other reason, I’ve always wanted people to know that.
Ricky Baez 31:49
Now, does that make a credit as no HR guy, you see the smile on my face, Pete because I talk about this in a class all the time. There’s a huge difference P huge difference. In the same, I want to be transparent, and actually, be transparent. Right?
Ricky Baez 32:06
So let’s talk about the transition from theory to application because I agree with you, right, you want to be as transparent as possible.
Ricky Baez 32:13
Let’s talk about what that as possibly means because there are going to be some things that you just it’s not going to make any business sense to communicate early. And then when it should be. Right.
Ricky Baez 32:25
Your employees should know that though, you should let your employees know that peace because your employees will respond better to being told, hey, this could happen versus them feeling that they’re being treated like a little kid, and the wool is being pulled over their eyes.
Ricky Baez 32:40
So I agree with you, I would just stand up there and say, Look, when we’re doing great, let’s have a conversation about why we’re doing great. And thank you for helping us get there.
Ricky Baez 32:48
But if we’re not doing great, let’s have a heart-to-heart conversation about what that means. And if we don’t get to x level, what that could mean for the organization?
Ricky Baez 32:57
Now, here’s where a lot of CFOs would cringe, right? Because if I communicate, what people are going to be afraid of leaders, they’re going to be afraid that people are going to leave prematurely.
Pete Newsome 33:08
Do we want to control that well, or do or is that part of it? Right? If if I mean, the smart person might say, hey, let’s let this happen. But again, you don’t want your best people to leave either.
Pete Newsome 33:22
So how do you curb that I get I get that I know? Because it’s an angle, it’s not necessarily the best angle in that scenario, because you don’t want your best people to leave.
Ricky Baez 33:36
So if you can work it in your favor, check this out. So if you know if you’re a smart leader, and you know that this message is going to rattle some of your best folks have a conversation with them first and say, look, here’s what this organization is going you are a big piece right in this puzzle, right?
Ricky Baez 33:55
We need you to make this better you get their buy-in because chances are if they’re your best employees, chances are other employees look up to them and they have their ear. So you want them on your side.
Ricky Baez 34:06
So you get them on your side, you let them know, here’s what’s going to happen. And you’re a big piece of the future of this organization.
Ricky Baez 34:13
And if they’re on your side and all the employees see that quote-unquote leadership is on the same line. The right people are going to leave and that’s okay.
Ricky Baez 34:25
You just have to know who’s the right one and who’s the royal I think every company does. Yeah. Every company knows that every employee knows well.
Pete Newsome 34:34
Yeah, that’s a different conversation. A whole different combo. Yeah. Okay. So it is layoffs at Christmas that is your definitive answer on that? Is what when do you want to when’s the best time to do it? When’s the better time to do it?
Ricky Baez 34:54
And it’s one side says you know what, rip the band-aid off as quickly as possible. Another side says, Man, if that badly falls on right before right after Christmas, it’s gonna suck either way, if you don’t get that 10% to, to really help that out of your p&l I will see before if anything right after Thanksgiving before giving them any kind of
Pete Newsome 35:23
Oh, no, no, no, that’s it. That’s an out. You don’t get that out. You don’t get the right after Thanksgiving. We’re talking right before Christmas or after you don’t get a six-week runway.
Ricky Baez 35:35
Okay. So what does that say to me as a leader that I cannot come up with a program that can help me understand that I will save money to lay people off on any other date other than Christmas?
Pete Newsome 35:45
Well, it’s not, you know, he’ll tell you as being a staffing person. That it’s uncanny how frequent layoffs, not layoffs but cuts happen. And I don’t want to call them layoffs because that’s a different thing.
Pete Newsome 36:04
But contractors get cut. With frequency, significantly more frequency than they get hired at this time of year, and it’s every year, I mean, you ask anyone in staffing, and they will tell you the same story your cuts will happen at the end of the year.
Pete Newsome 36:22
The various reasons, but I often describe it as just a natural closure. There’s the end of the year, we’re going to run this through the end of the year, well, the end of the year comes in no one wants to do it then or no one’s happy about it, even though you knew that the end being in staffing, I know it’s coming.
Pete Newsome 36:40
I know we’re gonna get a lot of cuts, relative, we’re going to get relatively more cuts at this time of year with fewer hires to balance it out. Unless there’s an anomaly. And if I look back on 17 years, there’s been a few anomalies.
Pete Newsome 36:54
But for the most part, that’s been the way it’s gone. Gone down. And it makes sense. But no one ever no one likes it. No, no, the people don’t like it on paper, it may make sense. So I
Ricky Baez 37:11
can I back up real quick? I kind of want to change my answer. If you’ve had a great conversation and great relationship with your employees the entire year if you get to a situation where you may have to do a layoff that you cannot avoid during Christmas time.
Ricky Baez 37:28
If you’ve kept them up to speed, I don’t think they’re going to have a hard time with it because it was suspected.
Pete Newsome 37:37
Well, I mean, well, that’s back to the communication if Yeah, if it’s been there all along. I think but it’s it still feels bad. At this time of the year. Yeah.
Ricky Baez 37:49
Yeah. I mean, it’s, you know, this is without this happening, there’s this was a time of year that really pushes people to the breaking point emotionally, emotionally, without this whole job thing adding to it. So it’s just crappy all along. before, during, and after.
Pete Newsome 38:06
I don’t know. Is Africa done? Well, here’s, here’s if there’s never here’s the silver lining. I won’t call it good news. I’ll call it a silver lining. Most don’t see Thanksgiving. No, no, no, no, well, it’s too late. So that’s passed with it the new year is just around the corner.
Pete Newsome 38:25
And with that, there’s a lot of things to pick up. So also from the trend, I’ve it’s been very obvious to me in staffing over the two decades that I’ve been in it is come January things pick up.
Pete Newsome 38:39
And so at the end of the year, one of the reasons hiring gets slows down so much is vacations and it’s hard to get some people out of the offense, it’s hard to push things through and get the right people to interview and etc. But in January, everyone’s back in the saddle ready to go.
Pete Newsome 38:55
Boom, things pick up pretty darn quickly.
Pete Newsome 38:57
So that’s the good as soon as you have been laid off, or you have to do a layoff just look at that as a silver lining and try to enjoy the time while you can and remember that we further moment is in a good position in the job market for candidates we still are and if you’re in a technical role or healthcare or finance, I can tell you a huge demand more jobs than there are qualified people.
Pete Newsome 39:28
No question about it. So that’s that is more than a silver lining that is actually good news.
Ricky Baez 39:35
It is easy for us to be sitting here talking to people right now. People who are listening. They’re like, yeah, easy for you to say I’m the one who just got laid off.
Ricky Baez 39:46
You know, it’s just how he was talking about this being an anomaly. We were in it for the past three years, right? We’re gonna look back at this time from 2020 2020 to 2022 or 23.
Ricky Baez 39:59
This point in these 36 months is going to be dissected and talked about in classrooms for years and years to come. So I’m here too That’s it. Right? That’s it. As I said,
Pete Newsome 40:12
if we beat it up, we always do enough.
Ricky Baez 40:16
Let’s not go down another road right now.
Pete Newsome 40:18
No, we’re gonna end up but before we do, we want one thing in one sentence or just one you get one soon. 30 seconds or less. You still have to make the prediction for 2023 on what just describes the hiring market.
Ricky Baez 40:38
It’s going to be radically different than what you’ve seen it today and get ready for some big changes. That’s one sentence.
Pete Newsome 40:46
Okay, wow, a lot of detail there. Things are going to change and it’s going to be different there. I said it.
Ricky Baez 40:56
Oh, but I can own one successful psychic business.
Pete Newsome 41:00
Yeah, exactly. Yeah. You just predicted every year in the history of the world that so yeah, I that here’s mine. Okay, I think the freelance market will continue to grow.
Pete Newsome 41:14
I think government or government will try to fight that but it’s a losing battle for them because it’s better for the employees. It’s better for employers and that train is rolling and picking up steam.
Pete Newsome 41:26
I think we will see jobs slow down hiring and in freezes and more layoffs. But I still believe that there are going to be more jobs in many sectors and there are qualified people I don’t see that catching up because of the true great resignation, which is the baby boomer generation retiring so I don’t see it as bad for the economy.
Pete Newsome 41:53
Not as terrible for the workforce.
Ricky Baez 41:58
You and I have very different definitions of what one sentence means. It’s a very different definition because I was sticking to it.
Pete Newsome 42:12
That I said 30 seconds or less. I think I met that.
Ricky Baez 42:15
You did? He did? No. Okay. So so can I clarify that mine?
Pete Newsome 42:19
Oh, I want to make it as awkward as possible. Yes, of course. And then we will say goodbye. And we will say goodbye well, okay, yes.
Ricky Baez 42:27
The reason I’m saying this is going to change is that either side they’re not budging, right, you’ve got some candidates that are going to stick to their ideals of you to know what organizations need to bow down to my skill so that ever seen before.
Ricky Baez 42:43
And the opposite is happening with some other organizations. So I am curious about how that’s going to change how we recruit.
Ricky Baez 42:50
Because I am thoroughly convinced how we recruit how are going to recruit from here on forward is going to be a night-and day difference from what we have been doing in the past three years and I cannot wait to see how that’s gonna work out.
Pete Newsome 43:01
All right, we’re gonna talk about that more in a future episode then. Yes, sir. Cool, sir. Absolutely. Ricky thank you to everyone who’s listened this far and gotten to this point.
Pete Newsome 43:09
Thank you. And happy new year almost the last show or Christmas is almost hot. Well, maybe I guess we’ll see if we can but just in case, we’re not back with publishing another show until January.
Pete Newsome 43:23
We’ll just say just in case. But please, questions. We love them email@example.com. And if you would rate and review, as long as it’s five stars, we would love that too.
Pete Newsome 43:36
So thank you so much. Otherwise, you know, don’t bother. There are lots of other things.
Ricky Baez 43:43
Both four and a half note five, five only. Alright folks, thank you very much. Merry Christmas. Happy new year if we don’t see you. Have a good one. Bye.
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