Déjà Leonard is a copywriter and freelance journalist based in Calgary.
There’s been a lot of talk about a looming recession, especially if you work in the technology industry where we’ve seen a number of companies reducing headcount.
However, another trend – labour hoarding – is gaining traction in the U.S., as data suggests companies are actually holding on to their people. Labour hoarding is an economic tactic where companies choose to retain employees, rather than laying them off, during an economic downturn.
The idea is that companies can save costs down the road by keeping talent today – especially when you consider the cost of rehiring people and the obligation many employers have to provide salary and benefits even after layoffs.
The interesting thing about labour hoarding in our current context is that it hasn’t really been used in the past few recessions, says economist Heidi Shierholz in a Yahoo Finance video.
“One of the things I think about is employers just went through this really intense thing with COVID where a lot of employers saw the COVID recession having laid off a ton of workers, and then five minutes later, wanted them back,” she says. “That could be having some effect on how businesses are reacting to this. Like, ‘I’m not going to move immediately.’”
Economist Julia Coronado of Macro Policy Perspectives shared a similar perspective on Twitter.
So, what could this mean?
According to Bloomberg, labour hoarding can signal, and be a key driver behind, a more mild recession.
Keeping workers in a downturn can help to stabilize the job market in the long term. Plus, when more people are employed it affects full communities. People can pay their bills and shop and they can continue to support much-needed social services through paying taxes.
Signs of labour hoarding, paired with an easing Canadian inflation rate, is reason to feel hopeful. However, the inflation rate is still well above the Bank of Canada’s target of 2 per cent and you can never fully predict how harsh a recession will be.
What I’m reading around the web
- Have you been applying to jobs but aren’t hearing back? You may be the victim of “ghost job” postings, where managers post jobs with no intent to hire anyone. Data from lending firm Clarify Capital shows that 43 per cent of hiring personnel kept job postings active to “give off the impression that the company was growing.”
- So far, bananas have proven to be inflation-proof. The tasty fruit, which has been in a chronic oversupply, has barely jumped in price, rising just seven cents over the past year, to $1.68 a kilogram from $1.61.
- Sept. 30 is National Day for Truth and Reconciliation – a day to reflect on the tragic history and impact of residential schools. Read about how the government of Canada is investing more than $4-million for commemorations, and what this federal holiday means to Indigenous peoples, members of Parliament and more.
- Employees and employers alike have rightfully shown concern about proximity bias since many workplaces have shifted toward a hybrid model to allow workers more flexibility. Here, an HR exec shares how leaders can leverage one-on-one meetings to create more equal and intentional experiences for all employees.
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