How to Prepare for the Changing Economy: Assessing the Current Job Market and Talent Shortage

Episode 55 October 26, 2022 00:23:04
How to Prepare for the Changing Economy: Assessing the Current Job Market and Talent Shortage
The Edge: A Skillsoft Podcast
How to Prepare for the Changing Economy: Assessing the Current Job Market and Talent Shortage

Oct 26 2022 | 00:23:04

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Hosted By

Michelle Boockoff-Bajdek

Show Notes

Although we are not yet in a recession, layoffs and hiring freezes have insighted some fear that we may be headed that way. As these changes in the economy impact the workforce, how can employees and employers prepare? On this episode of The Edge, our host Michelle Boockoff-Bajdek is joined by Diana Ransom, an executive editor at Inc. who specializes in covering small businesses, entrepreneurship, and economic inflations and recessions. Diana shares her expert opinion on the changing state of the economy, its effect on the job market, and what we can all do now to weather what’s ahead.

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Episode Transcript

Speaker 1 00:00:07 The views expressed by guests are their own and do not necessarily reflect the views of Skillsoft. Welcome to the Edge, the Skillsoft podcast where we share stories of how transformative learning helps organizations and their people grow together. I am your host, Michelle Bebe. My pronouns are she and her. You know, since launching the edge in the spring of 2020, we've looked at some very important and very timely topics, from working remotely to leading inclusively from reskilling at scale, to building a culture of leadership and learning. I've had lively conversations with dozens of guests, including executive coaches, talent development leaders, diversity consultants, the curator of a virtual museum, a professional storyteller, and a resilience ninja. All of them driven by purpose and passion, and it's been a privilege to introduce you to them. Today I have the pleasure of introducing you to Diana Ransom. Diana is currently executive editor at Inc. Speaker 1 00:01:10 Her insightful stories on small business and entrepreneurship have appeared in the Wall Street Journal, smart money.com, the New York Daily News Fast Company and entrepreneur. Most recently, Diana has been covering two topics that are probably already on your mind inflation and recession. And we've invited her here to help us sift through some of the more alarming headlines we've all seen so that she can offer her expert insight on what we can expect and give advice on the things we can do as employers and or employees to help us weather whatever's ahead. Thank you so much for joining me today, Diana, Welcome to the Edge. Speaker 2 00:01:48 Hey, thank you and I'm happy to be here and I'm really looking forward to our conversation today. Speaker 1 00:01:54 So am I, I mean, let's face it, it's impossible to pick up our phones without a notification from a news outlet or social media platform that is alerting us to some rather frightening statistics and predictions about the economy. You know, as I was going through some recent headlines, new inflation developments are rattling markets and economists. Inflation isn't just about fuel costs anymore as prices increase and broaden across the economy. So even when there's good news, it seems to be tempered with anxiety. Americans are feeling better about the economy, but inflation still loom. So Diana, I'm hoping you can help us understand how the inflation we're all experiencing right now might or might not signal a recession and is that where we're headed or are we already there? Speaker 2 00:02:40 So there have been rare downturns, or I guess I should say, fed tightening periods that have not resulted in recession. I think there's actually one, the economist I I spoke to recently, Bob Litton, he's been studying recessions for a long time, and there was one, the, the short recession that we had had, it was like a couple months long, uh, at the outset of the pandemic. That was like basically the one period of, uh, tightening that we did not end up in a recession. Hmm. So it's likely we're gonna get there. Yeah. I don't think we're there yet. And a lot of times it ends up being this sort of self-fulfilling prophecy. The expectation is that people are gonna start pulling back on spending, so we should pull back on hiring. We should pull back on buying. You know, it's like everyone sort of predicts the recession and then the recession just materializes <laugh>. We're not seeing, we're not seeing recession yet. You know, if you look at the jobs numbers, uh, for August, they're actually pretty robust. They're expected to be robust in September two, but you'll see different sectors feeling the pinch right now. So tech sector for instance, like Facebook is freezing all hiring at this point. There's a lot of companies that are freezing hiring. Um, even Goldman Sachs for instance is, is letting people go. It's sector by sector specific at this point. Speaker 1 00:03:53 This idea that one most certainly follows the other is important because I think people are waiting to see what's going to happen and what do I need to do right now. You know, you recently wrote that businesses are facing a perfect storm, right? So we've had supply chain issues, we've had higher costs, higher wages. In part, we've talked about some of these issues on the edge, things like the Great resignation being one of them here in the States. You talked about it, The Fed continues to raise rates and this is all translating into higher prices for customers. And whether that's fuel or rent or medical care or groceries. In fact, we've seen the food at home index increase 13 point a half percent since last year, the largest such increase since 1979. So what are businesses doing to address or to offset this? Besides what I think what we're seeing in the tech sector, which is, you know, laying people off Speaker 2 00:04:47 Mm-hmm. <affirmative>, Well, there's this expectation of future hardship. So a lot of companies and even the ones that aren't necessarily feeling it yet, they're cutting back on marketing spend or they're trimming inventory levels or they're bulking up on inventory, but they're doing it in a more, uh, sort of aggressive bulk buying kind of way. They're trying to be smarter about how they're spending. They're basically just spending more cautiously. Businesses will look for alternate um, vendors, for instance. You know, can they get a better deal with the vendor that's just further away, For instance, are there alternate products that they could be pushing instead of typical loss leader that they're looking at alternatives, They're being strategic and smart, but you know, a lot of times they're not even feeling it yet. Speaker 1 00:05:30 Mm. You know, it's interesting you say they're spending more cautiously. I would also argue that they're hiring more cautiously. And yet, you know, we're still seeing in the news this concept of quiet quitting and now quiet firing. It seems as if stories are sensationalizing what's going on in this labor market. And while they're focused on these, I think really pithy headlines, they're not necessarily talking about the why. Why is this happening? What's your perspective on that and what can employers do at this point to counter the sort of sensationalized headlines and manage a tight labor market that we're seeing right now, despite the fact that we know that they're also being cautious about hiring? Speaker 2 00:06:19 Yeah, I mean, I don't know how sensational it is. You know, we've all just experienced such trauma as a, as a nation, as a society that, you know, it's not surprising to see these ominous headlines about people quietly quitting. You know, 50% of the workforce quietly quitting. For instance, people have just been doing so much for so long, you know, doing the jobs of four people because your employer can't hire fast enough, for instance. Or you're juggling family obligations at home while you're trying to maintain a full time job. The fact that people are burned out is not surprising, and I don't think it's sensational at all to suggest that they are. For an employer, this is definitely tough to navigate, you know, if people are feeling burned out, what can you do to help people manage their time or manage their workloads? Where the companies will succeed and fail is how they do right by their employees at this moment. Speaker 1 00:07:09 Thank you for saying that. We've seen some of that in our own research at Skillsoft. We have a skills and salary report that we publish each year, and in our most recent one, 30% of respondents told us that they changed jobs for higher compensation, but 59, almost 60% and nearly twice. That told us that they changed jobs for increased training, for growth and for professional development. And so in this job market, even though I think again, companies are looking at hiring more cautiously, they're still having to manage and think about the employee experience because employee satisfaction is of paramount importance. Speaker 2 00:07:48 I totally agree, and it's certainly not just compensation. What I meant by opportunity is that an employer has this opportunity to sit down with the people that they still have. They're pushing forward and they're helping the company get through it. They have this opportunity to reinvest in them, sit them down, ask them these questions, like, what really motivates you? And like, what do you need for your best self? And a lot of times, you're right, they will not say compensation. They'll say greater flexibility. They'll say, career advance, I wanna learn how to do this. Then you kind of need to provide that in, in so far as it's possible. Speaker 1 00:08:24 I really love what you said there about the fact that people are seeking more or new kinds of value from their work, and we see companies evolving to meet those expectations. You know, we've talked about here on the edge that the traditional relationship between employers and employees is transforming and there's a new social compact between the two that centers on mutual growth, whether that's business growth for the employer or personal and professional growth. We all have career aspirations and we all want to advance or continually advance. That seems like not just a trend, but something that keeps us going, particularly during difficult or disruptive periods. But I also think that social compact isn't recognized entirely by employees. And I think after two and a half years of disruption, companies really have to continuously earn the trust of the people who work for them. Yes, Speaker 2 00:09:22 Absolutely. And, and in fact, probably during the pandemic is when a lot of companies did earn that trust and those that didn't are facing the ravages of the great resignation at this point. You know, people aren't leaving good jobs. They're leaving jobs if they, they can't stomach anymore. This is a real flash point for people and employers generally, like you have to look at your organization and kind of reassess to some degree, you know, whether you're fulfilling your side of the bargain despite what you see in the headlines about recession. The employee is still in the driver's seat. Employers still need them obviously, but they still have a lot of leverage. They can still go out and get a job and work remotely if their employer is requesting them to come back in the office full time, even though they've spent two years, you know, doing their job remotely and are perfectly competent doing that while this is happening, the employer really needs to go a step above and beyond because you do need these people. Your employees are your lifeblood. Speaker 1 00:10:19 That is something that we believe strongly here. Obviously, you know, when I think people have gotten used to a new way of working, and also we've seen the acceleration of digital transformation, which is forcing us to look at the skills that we have internally, the way that we manage talent, how we navigate our workforce as we head into a future, which is certainly different than we would've imagined two and a half years ago. Talent in and of itself, talent development, talent management is becoming a strategic priority for so many companies. Let me ask you a question about, you know, you've got an employee who wants to stay where they are, they're looking for upward mobility. They might be worried, right? They might see the headlines sensationalized or not worry that there could be a recession of eventual layoffs. We talk often about keeping skills current, especially as we see more skills based hiring. But what are some of the other things people should be doing outside of continuous learning and development? Speaker 2 00:11:28 This is something that we hear a lot among entrepreneurs and in entrepreneurial circles is developing your personal brand, but it doesn't need to be something that only entrepreneurs do or people who are out there hustling every day. Employees themselves can also do this. You know, it's developing a website, it's figuring out how to amp up your LinkedIn page, how to better showcase the skills you do have. A lot of companies do have much more mobility now, and the skills that you have been using throughout one career can be very much applicable for another, and you just need to figure out a way to kind of sell yourself in sofar as it's possible. Um, and also employers are really looking for that. They like diversity in who they hire, especially now when the labor market is so crunched that certainly could work for people. Also just starting a side business, there was this study that came out, it was just written up in Harvard Business Review about how basically the experience of starting company and then the experience of having that failure is tantamount to three years of work experience. Even though it could have happened in shorter time span, you've learned so much how you explain that to a potential employer because it kind of is confusing. It's like, Yeah, I started this thing and it failed, but you didn't fail. You learned really valuable skills. Speaker 1 00:12:46 And I started at Skillsoft. I don't think I could have predicted that six months later we would be entering a pandemic and we'd now be sort of at Maslow's Hierarchy food and Shelter, trying to figure out not only who are we gonna manage our own employees, but we're a professional learning company that that sort of invented online learning. And so now we've gotta put business continuity programs into place for our customers in the midst of a social justice movement and a widespread cry for new d i training in the summer of 2020, we had to build new curriculum to support the needs. I've learned a lifetime in the past two and a half years, but I was talking to another guest of mine and you know, she talked about this notion you just did of diversifying your revenue streams, right? For her, she had been a public speaker out there and that was drying up. Speaker 1 00:13:36 People were not hiring, um, you to come in and talk to employees, at least not in person. And so she took the time to write a book, she took the time to create a virtual speaking platform that now is, is far more lucrative and she doesn't go on site too much anymore. And so I I love this idea that for people, we're doing things differently and we have different opportunities and in some ways have had to think more creatively. And I think that's great advice for people out there, right? There's not all doom and gloom. There are great opportunities to learn to grow in advance, even if it means failing. Mm-hmm. <affirmative>, what advice would you have for companies like right now they're thinking, Oh my gosh, how do I keep these people? How do I retain them? What do I do in order to ensure that my business is stable? And not just from an an employee perspective, but overall, how do I need to look at my business right now? Speaker 2 00:14:37 That is the, um, you know, $10 million question. Speaker 1 00:14:40 <laugh>, Speaker 2 00:14:41 Starting from the employee perspective, it's about rethinking or reassessing your workplace. Do you need to be in an office? And I can't believe we're still even, you know, having this conversation, but that's a question to have. Do you need to be in an office? Do your employees even want to be in an office? And if they don't, how do you measure productivity in a completely un sleazy kind of way? Because you don't wanna be offputting, right? But you also wanna make sure that people are doing their job in the best possible way. And so you're just sort of reassessing your own situation. And then from mm-hmm. <affirmative> mm-hmm. <affirmative>, sort of an exogenous, kind of like outside world perspective is, you know, assessing everything. If you haven't already assessed everything during the pandemic, you probably need to reassess vendors relationships. You need to reassess even even down to the products you sell. Speaker 2 00:15:33 Do I need to be using such high quality sheep, skin leather for the boots that I make? Right? Like, you don't need to necessarily use all of those really high cost things, or maybe that's like your bread and butter. It's all about being strategic right now. Cutting costs, ratcheting down inventory. Also thinking of clever bundles. How do you create more value for a, a customer right now? Because if they are concerned about a potential recession in the future, even if they don't feel it yet, there's still the concern. So you need to think about like how to be more valuable to your consumer. Also, just realizing that if you have a premium product, like how do you play up the fact that you have a premium product? How do you lean into the consumer that still has money? It's, it's tricky. We've reported on surveys that have looked into this and they say that just having gone through the pandemic, generally they feel like better prepared heading into this mm-hmm. <affirmative> grooming recession because they experience such trauma during the pandemic. Speaker 1 00:16:32 You just got me thinking about something as we talked about companies tightening their belts, right? Will that have an impact on the way companies have been investing in and thinking about their sustainability efforts? I just see more and more focus on hitting our targets, right? Not just scope one and scope two emissions, but now pushing down through the value chain into scope three. And there seems to be still an increased pressure, but do we see that or do we think that that will change as companies maybe start looking at areas of cost reduction, tightening their Speaker 2 00:17:12 Belts? In our upcoming issue, we have the whole package on existential threats. Mm-hmm. <affirmative>, for instance, the ever rising cost of health insurance, right? And, and what the company does to sort of compensate for that. You know, a lot of times traditionally companies have where one cost increases, they pull from another department or they pull from another cost wherever they can, but mm-hmm. <affirmative>, things like sustainability, those ESG efforts that you're seeing at mm-hmm. <affirmative> that we're so trendy and like the last year or so, they're gonna continue because your customers require them and you know that, and customers are increasingly demanding that the companies that they buy from are more vocal about social issues and just even political issues that, you know, they wanna be more progressive toward, so that you're gonna still see that push towards sustainability. Speaker 1 00:18:05 I agree wholeheartedly. I I was at the World Economic Forums advancing social justice session just a couple of weeks ago. It is top of mind for so many people, and one of the most provocative questions raised there was, do you know how many of your employees sit below the poverty line? People want to work for companies whose values align with their own, where they feel they're going to be cared for and where they know they're going to be valued. Mm-hmm. <affirmative>. But I think the same is true for companies. I think companies wanna do business with other companies that align with their values and, and es and g efforts. Not again, just about carbon and climate, but when you start to get into social issues, it's really critical that we continue to place emphasis on this and don't let it just be a poster hanging on a wall. Speaker 2 00:18:53 And from a company perspective, let's say we're talking about medical care and if you're a company that provides 100% coverage or, you know, same thing with sustainability. After you establish those goals, how do you build a company that 100% supports those goals? That way you're not getting blindsided by a goal. You are establishing your, your company from the start with that mission. Speaker 1 00:19:18 Yeah. It's embedded into the fabric of everything you do, which I think is, is so important. I really look forward to any new research that you're gonna publish or articles because I think this is a topic that is so, so important. All this emphasis on inflation and a potential recession. There's gotta be some good news on the horizon. What good news would you share with us? Speaker 2 00:19:40 You know, I actually think it's kind of a beautiful thing that people are starting companies and, and sort of record numbers. Um, I was just taking a look at the Census Bureau estimates for new business starts. It was pretty dramatic during the pandemic, we lost hundreds of thousands of companies, but we're seeing massive growth in that department. So that is heartening. People are not just sitting around letting downtime occupy them. They're getting out and they're starting businesses. And in large numbers, these might not end up being, you know, the next Google for instance, but there's still people just out there slugging it out and trying to make something great. So that's exciting. Speaker 1 00:20:17 And that speaks to, I think, two things, resilience, right? But also adaptability or agility, if you will. And I think those are some of my favorite power skills, and thank you for that. We always wanna know that there's good news even when sometimes we're only hearing the bad. Before we wrap up, Diana, I've been asking the same three questions of my guests since I started The Edge, which I did back at the spring of 2020, just as we were in the, the beginning of the pandemic. Number one, what are you learning right now or, or what have you recently learned that's had an impact? How are you applying what you've learned, whether it's in the flow of work or, or a passion project or in life? And third, what advice about learning would you share with others? So again, what are you learning, how are you applying and what advice would you give? Speaker 2 00:21:04 Last year I began teaching a class on future writing at nyu, and it is the hardest thing I've ever done. Speaker 1 00:21:12 <laugh>. Speaker 2 00:21:12 I've been doing it for almost 20 years, but I've never taught it. It has been a real learning experience for me. My husband is professor, he teaches political science, so I have new appreciation for his, his work, which is kinda a beautiful thing for our relationship. I think the biggest upshot from it all is you just, frankly, getting outside of your comfort zone that I've done it. But it's like learning how to teach, frankly is something brand new to me. And it's been exciting and satisfying in, in ways that I never even dreamed would be possible because it is something so uncomfortable for me. That's my new thing. <laugh> embracing discomfort, I guess when we sort of embrace complacency. You're not growing, it's not exciting. So try the new thing because you, you just might surprise yourself. Speaker 1 00:22:02 Well, congratulations. I mean, that sounds like a wonderful opportunity as, as well as a way to take your skill and honestly give back to others. Congratulations on that, and thank you so much for joining us today, Diana, it has been an absolute pleasure to have you. Speaker 2 00:22:16 It's been my pleasure. Completely. Thank you so much and really enjoyed our talk. Speaker 1 00:22:26 And thanks as always. To our listeners, you can find more of Diana's [email protected] and on Twitter at Diana Ransom here at Skillsoft. We propel organizations and people to grow together through transformative learning experiences. And so I hope you've enjoyed this episode of The Edge, where we've talked about the importance of transformation and the value of skill building, especially in these economic times. I hope you'll tune into future episodes as we unleash our edge together, and I look forward to seeing you. I'm Michelle Bebe. Until next time, keep learning, keep growing, and be well.

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