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Talent Talk: Why I’m Hiring, and Why You Should Be, Too

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With the unemployment rate at its lowest since 1969, the Fed wants you to stop hiring to help tame inflation. That could be bad for the future of your business.

As we are all aware, the Federal Reserve has been raising interest rates to tame inflation. It began with an innocuous quarter-point hike in March, which has become a total of 3% year to date (300 basis points, if you want to sound smart to your friends and colleagues). Another three-quarters of a percent is almost certain in November.

The Federal Reserve is trying to slow jobs growth, which would put less pressure on employers to raise pay. Pay increases are typically passed on to customers through price increases, and so it ripples through the supply chain all the way to the end user, driving inflation.

Here is the thing, though. It really isn’t working. Maybe you are thinking, “I guess he wrote this before the Labor Department’s September payroll report.” No, I saw that: Only 263,000 new jobs added, down a bit from August. But if you read past the headlines, the increase in unemployment that Federal Reserve Chairman Jerome Powell really wants, is not happening. The unemployment rate went down from 3.7% to 3.5%. That matches the lowest level since 1969.

I hope the Fed knows what it’s doing, and that it can bring the economy to something close to the “soft landing” everyone wants by slowing it down just enough to tame inflation but not enough to push us into a recession. But I cannot control that.

What I can control is how I manage my company, and I am hiring. Everyone in the plastics industry should be hiring now if business is good or even okay. Why do I say that? The reason job growth is (arguably) slowing while the unemployment rate drops at the same time is because there are far fewer people in the workforce than there were just three years ago — nearly four million fewer.

If your competitors panic and stop hiring, or even let good people go, this is an opportunity for you to capitalize on that. Given the labor demographics that we know for a fact will not change for eight to 10 years, this could be the best time to build a world-class team for the next decade.

 

About the author

Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].

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