Things are great right now — but are changes on the horizon?
- Right now, job openings are abundant and companies are eager to hire.
- Things could change quickly if a recession hits.
- It might be a good idea to capitalize on the current market and see if you can get a raise or even a new position.
For many months now, companies across a wide range of industries have been desperate to hire workers. And many have been throwing extra money at the problem in the form of sign-on bonuses and higher wages in an effort to solve their labor shortage issues.
But while today’s labor market conditions put workers and job seekers in a terrific position, we can’t expect things to stay this way forever. In fact, a number of economic experts are already sounding warnings about an impending recession.
If one were to hit, it could compel companies to pump the brakes on hiring big-time. And that’s something workers and job seekers need to be aware of.
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Is the labor market about to cool off?
In August, the national unemployment rate rose by 0.2 percentage point to 3.7%, according to the Bureau of Labor Statistics, and the number of unemployed individuals increased by 344,000 to 6 million. That uptick in the jobless rate isn’t very substantial. But it’s an increase nonetheless.
To be clear, though, a 3.7% unemployment rate isn’t terrible. And it’s comparable to where the jobless rate sat prior to the pandemic. But if the unemployment rate keeps ticking upward from month to month, that should serve as a potential warning sign for workers that the job market is weakening.
What’s more, workers and job seekers should pay attention to rate hikes by the Federal Reserve. Those are designed to cool inflation by making borrowing more expensive.
If the cost of credit card borrowing and personal loans increases, for example, then consumers are apt to start spending less, which could narrow the gap between supply and demand that’s been fueling rampant inflation. But it could also lead to a full-blown economic recession, at which point hiring could slow down and existing jobs could be lost.
Of course, that’s not the situation we’re in today. And so workers and job seekers should use today’s red-hot labor market to their advantage while they can.
How to benefit from a strong job market
Whether you’re currently employed or looking for work, the reality is that right now, companies can’t afford to lose or give up talent. And so you might be in a great position to negotiate a better salary and compensation package.
To that end, do some research to see what the average worker in your industry makes. And then go out and fight for the pay you deserve. That could mean asking your current boss for a raise or requesting a higher salary than the one you’re offered following a successful interview.
Also, if you’re seeking out a new job, don’t hesitate to ask for a sign-on bonus. Even if that sum is modest, it could serve a number of key purposes, from padding your savings account to chipping away at an existing credit card balance.
It’s hard to say how long today’s solid labor market will last, and much will depend on the direction the overall economy heads in. But for now, workers and job seekers do have an upper hand, and that’s something you might as well take advantage of while you can.