From the course: Job Market Basics for Business Leaders
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Job markets lag economic activity
From the course: Job Market Basics for Business Leaders
Job markets lag economic activity
- One of the most important secrets about the labor market is that it lags economic activity. That means when an economy is going into recession, hiring is often still strong, but when an economy is coming out of recession into recovery, hiring has slowed and layoffs are rising. This is because there's often a budget planning impact on how people hire. Because many people hire around how the headcount was planned in the year prior, they're still hiring in to a recession, but when the recession's going on and they do the new year of budget planning, they find the headcount is greatly reduced. And now, even though the economy's going up, people aren't getting hired and the unemployment rate is higher. As a business leader, this is important to know because you're going to have more options for people to hire if the labor market softens. The trick will be trying to deal with the budget considerations and the planning…
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