While the economists, point to the nation’s relatively low jobless rate and ongoing hiring, U.S. companies in January announced more than 82,300 job cuts. On the other side new government data is expected to show that businesses hired about 177,000 workers. So, it can be inferred, these layoffs are mostly clustered in a few industries mostly among financial and tech businesses.
The most intriguing part of the hiring trend is the loss of worker’s confidence that companies take advantage of, by offering salary lower than expected or below industry standards.
Companies must pay sustainable salaries regardless of the market. Many blame it on Facebook/Meta, Google, Microsoft for making layoffs “popular” about a year ago and making it OK to lowball. People have bills to pay, and one might have to work a lower paying role for a while.
Another strategy seen amongst most companies now they have to backfill a position. Companies, at least some, still seem oblivious, some under the pretext to cut costs amid the rise in interest rates while others are shedding workers after a hiring binge during the pandemic. Other businesses are refocusing to invest in artificial intelligence, which has prompted job cuts in some of their non-AI business units.
In reality businesses need people to run and manage operations. Ironically, it’s amazing with a ‘fixed’ budget how Managers always can find money for themselves, isn’t it?! So, it’s never really about a fixed budget if it’s something they deem to be important. No budget is fixed.
Companies that did well in 2023 have announced some innovative incentives and bonus formulas. But in reality, the Managers are giving unfair and biased ratings to the hard-working loyalists to please certain chosen candidates to retain them for future transitional roles based on the company’s future needs.
Companies that choose to intentionally lowball candidates that are in high supply right now aren’t doing themselves any favors. If hired, these candidates will almost certainly leave for higher pay once the market shifts. Saving a few thousand now might seem like a good idea until you realize backfilling the role within a year will end up costing you more. Same for all those who stuck with your company during the ‘Great Resignation’.
Talent might be in excess supply in the job market, but loyalty is rare.
Shardul Bhatt 