Recruiting In The Trough III
(November 15, 2007) In the 1970s, we
experienced
stagflation. Stagflation is a period of low economic growth, high
unemployment and high inflation (Investopedia).
So wages don't rise while prices do in a period of stagflation.
The alternative scenario I've been trying to
get by arms around in this series might be called conflation. It
would feature
- slow economic growth,
- higher than normal employment turn
over,
- low unemployment rates (because of
labor shortages),
- low inflation (as measured by the
CPI) coupled with
- high inflation (as experienced by
the average employee).
Part of the core issue here involves the
government statistics that track inflation. At the end of the Regan era,
the CPI had housing prices removed
from the numbers that make up the index. So, the recent run up in
housing prices (no matter whose fault) did not impact this Cost of
Living Index. This is in spite of the fact that rents and mortgages have
spiraled to unbelievable levels. According to the US Government, those
are not a part of "inflation".
That means that workers, throughout the
economic spectrum, would suffer the impact of inflation. However, none
of the statistics support the experience. So, there is going to be an
increasing level of distrust of mainstream media as a result. The
reliable sources (who have been cosnsitently failing us) are not
reporting the obvious inflation that is already going on. When the media
don't report the news that their readers experience, things get
Orwellian.
It would be an interesting time for
Recruiters on both sides of the equation. Raises would be hard to come
by and inadequate. Jumping ship would work well for the top 30%. A wage
gap would develop.
If this scenario pans out (and there's at
least some reason to think that we're already in the middle of it), free
agency would become a key topic. Financial services that help workers
manage their retirement savings through an inflationary period might
well become a part of the service provided by a headhunter. Job hunters
would require unprecedented levels of discretion in the services that
they use. Employers would be heavily in the market for tools that reduce
the consumption of resources in the recruiting process.
It's easy to imagine a full court press
on Recruiting productivity featuring six sigma and lean recruiting
concepts. When attrition is caused by the external environment, the work
has to be much more efficient than when internal growth is the cause of
hiring requirements.
We're at one of these points in economic
growth where everyone is pretty sure that the future will be more of the
past. That's exactly when discontinuous events change the playing field.
written by
John Sumser. - .© 2007
Two Color Hat Inc., San Rafael, CA
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