By most accounts Al Smith was an iconic American politician. With a political career that ran from 1904,beginning with eleven-years as an Assemblyman in the New York State Legislature, to four terms as governor of NY,and culminating as a presidential candidate in 1928.
In his many political debates and interviews where he was asked, naturally, many questions about himself and/or his opponents, he would often begin with what became a very popular phrase,“Let’s look at the record”.
In business as well as politics, “The record” almost always includes the relevant “numbers”, what they are,what they have been, as well as where they might be going, i.e., “trends”. So, in business especially the phrase used in answer to many questions is: “let’s look at the numbers”.
Just about everyone was happy with the numbers in the February 2022 Jobs report. According to Staffing Industry Analysts (SIA) “perspective”: “This jobs report confirms the strength of the US labor market, and points to a very robust pace of hiring, all of which is good news for the US staffing industry”.
SIA also reported that in a couple of sectors (Retail, Information, Financial) the numbers had returned to their pre-pandemic levels. So, even after the “big scare” this past Winter(Covid surge with a sharp decline) we seem to be, once again, moving in the right direction.
There are other “numbers”plus the current and coming events that affect them which are not as optimistic. There is a continuing problem with the “Labor Force Participation Rate” (LFPR) which is at a 45 year low. This has certainly created or exacerbated the labor shortage.
And“Inflation”is a serious concern with its consequent increasing of interest rates which may cause an economic downturn or even recession in 2022.
Also, Dr. Fauci now talking about a possible “mild surge” this spring with a new variant and Congress debating how much more we might need to spend on Covid testing, prevention, and treatment in the coming year.
Additionally, we cannot forget the war in Europe, with its increasing sanctions and general disruptions in trade primarily in oil and gas throughout the world.
Although it is difficult to translate these probabilities into hard “numbers”, they undoubtably will affect prices and interest rates in a negative manner.
We could “dodge the bullet”in some of these areas but from what is now known or expected “the numbers” we are looking for are likely to be more subdued.
The negative impact of these possibilities in the staffing industry is likely to be a little less than the general market largely because other businesses may be looking to hire temp workers rather than new full-time employees or while, at least,until the market returns to a more predictable level.
In the current competition for recruiting employees, temp agencies’ may have an advantage in that there are millions of people who have simply “quit” their jobs during 2021, and who may be open part time work with much greater flexibility than the jobs they have left.This would especially be true for the women with children in this group.
In addition to the people who have “simply quit”, there are millions of others who took early retirements (50-64) in 2021.
Both groups may be interested in part time work to supplement their income.
Many of these early retirement people may have a good “nest egg” generated from no-penalty 401K withdrawals and/or the recent sale of a home.Both assets appreciated almost 14% percent in 2020-21 due to stock market and real estate price increases
But these are one-time incomes and even though largely exempt from income taxes, they are nonetheless finite.Most people in both groups are not yet eligible for Social Security benefits.
It is, therefore, reasonable to assume that these two groups may be interested in part time work so as not to dissipate their assets more rapidly.
There are millions of very good potential employees in both groups (those who retired early or quit.) They were not fired or laid-off for some questionable reason.
An attractively packaged, micro-targeted, recruiting presentation could yield some very good temp employees. They may not be as interested in higher wages as they are in flexibility, access to group health insurance and just “staying in the game.
So, looking at the numbers and the events affecting them one could conclude that there both opportunities and reasons for caution. So, move ahead confidently but wisely this year and, as always, stay safe.