The Expert Podcast

So how bad is the economy and how bad is it going to get so here's an article from The Wall Street Journal about how companies are starting to rescind job offers what is what is this what's going on here I thought there was a labor shortage I thought it was hard to find employees and there's companies that are backing out of job offers to recruits and obviously if you're a recruit it's not like this is a long-term thing you talk to them maybe within the last few weeks or month.

What's happening is companies are starting to see that the future Market a future economy may not be as robust as they thought it was going to maybe they thought they needed more employees because they thought there's going to be growth maybe they needed them more employees for their current Revenue stream but they see that it's starting to decline is this across the board is it in certain industries well according to the article different Industries especially are rescinding offers a lot of it has to do with insurance retail marketing Consulting and recruiting well those are all intangible products and services they're not tangible.

Some other companies are starting to cut back on hiring maybe not rescinding offers but cutting back on hiring this is across the board of company size small companies large companies are all doing this in fact we're seeing it with a lot of our clients that they're not necessarily laying people off but there are conversations about adding staff have been halted their plans for adding different divisions or positions is being halted.

Some companies are starting to consolidate jobs in using automation to pick up the slack why automation well the cost of an individual employee has gone up whether it's a minimum wage employee or a mid-level executive or a higher level employee the wage levels have gone up across the board so if you're adding another employee now costs more than it did even two or three years ago so in order to get the ROI on that employee you have to make sure that you have the revenue for it and if you don't then you don't want to add that employee maybe if you need additional Staffing you take two jobs merging into one and use some automation or AI or some type of Technology to make the process more efficient so that you can still get the job done with the same number of footprint of staff.

We have a client that's a company has 42 employees they're planning on doing another 15 or 20 percent in Revenue but half of that comes from inflation meaning that their prices are going to go up the other half maybe six or eight percent is going to come from additional sales volume transactions they normally would need to add two or three staff to handle that they're not going to add anybody they're going to merge five jobs into two employees and use Automation and some technologies and tools to perform the same amount of tasks that the five people would have done they would rather have more people but the cost of adding the staff and more recently the the um reliability of the extra staff is low meaning that you hire somebody you recruit them and train them and they don't stay so they're going to automation.

There's a lot of great fintech tools out there that you can use to perform the tasks with multiple people this is even happening at the the retail side next time you go to a McDonald's look at how the ordering process is done you don't need five people at the front counter you have kiosks even look at the drive-through window when you go to pick up your food at the drive-through your drinks are filled by a machine they don't have a person that takes the cup puts it under the thing and fills it up and puts it back on the counter there's a little Carousel of empty cups that go through they see the orders in the system and it fills up the cup automatically now the window person has to pick it up and put it on the window for you to take but they don't actually have to do the job that doesn't replace an entire employee but it might replace 20 or 30 percent of one person's work time so they can consolidate jobs.

The labor market going up and increased costs have forced a lot of employers to have to do this is this a good or bad thing that's not really the point of this conversation it's more to show that companies are doing more of this to try to sustain themselves with the same type of long-term Roi that they did with the same number of employees tell us what you're seeing in your company or in your area with regard to employment Automation and hiring practices of companies.