And joining me now to discuss is Nolan Church co
founder and ceo of talent marketplace continuum. Thanks so
much for joining us to talk about this. Um
we know american jobs numbers have been very strong the
past few months and we hear it's a sign of
economic resilience. Is this what you're seeing? I
continuum as well or do you think there are cracks
forming in the labor market? Look to your point
, I mean we've seen great numbers with the data
for quite a while now. 11 million jobs are
still open but there's definitely dark clouds on the horizon
. As you had mentioned, some of the biggest
companies are starting to pull back meta and coin base
where two of the first google also announced a hiring
freeze last week, as you also mentioned with Apple
. So what we're seeing with our customers is our
customer base by the way is is pre I.
P. O. Tech companies, 20% of those
customers have already conducted layoffs and I'd say about another
30-40% are currently having layoff discussions right now as far
as what you can tell is this hiring slowdown that
we're seeing taking place only in specific industries or do
you think it has the ability or it's already starting
to spread to other sectors as well. Certainly.
So in technology it's happening right now, especially with
early stage technology and you're also seeing it with the
bigger companies as well. We are seeing resiliency in
some industries um specifically travel and hospitality is looking really
strong right now, retail is still looking okay.
But the biggest concern is that if we start to
see demand slow down. You know, even in
technology or some of these other industries, it could
trickle to these other sectors and then we could start
to see a more widespread recession which some people believe
we're already in. Yeah. A lot of guests
that we've had on the show have been trying to
make the distinction between a recession and a technical recession
. And this is also coming on the heels of
this week, we're looking to the Fed to release
new data poison to announce another rate hike soon.
How do you expect? This will impact the job
market. I expect the Fed is going to continue
to raise rates until they get inflation under control.
And unfortunately inflation doesn't look like it's under control at
all right now. And so as the Fed continues
to raise rates, the cost of capital becomes more
expensive and thus we are going to see companies start
to pull back. Ceos are telling me that the
macro economic environment uncertainty is causing them to re plan
and to narrow their focus. So because of that
, you know, you have these concerns about future
demand. Um And so that is the primary fear
that the C. E. O. S.
Have. And so they are going to pull back
even though they may not be seeing headwinds in their
business today they're expecting in the future. Yeah,
we've already seen it this past week with earnings report
like those coming from snap talking about how these Pullbacks
from relatively healthy businesses have led to lower ad budgets
and that's hit companies like snaps bottom line and we
saw sympathy trading happening this week off of that company
. These companies are even bigger to a point that
one of our guests made just earlier. I'm wondering
if you think this pullback from companies looks like mass
layoffs? Well, what's interesting is is that if
you look at early stage technology, which I do
believe it's a bellwether for the economy According to layoffs
that F. Y. I there have already been
56,000 employees laid off this year. I expect that
number to double in the next quarter. And so
if that continues to trickle to later stage technology companies
and then into other sectors, I think we're going
to see a bigger pullback than what the Fed is
currently expecting. And given that they only have a
few levers to pull to tamp inflation, such as
raising rates. I get pretty concerned about what the
future looks like. Yes, it does make you
think that this could lead to something beyond the technical
recession and more of that description that we've seen in
previous recessions unfortunately hope it doesn't go into that direction
, but that's essentially what it would mean if the
labor market was not healthy and to that point also
inflation is high, We've been talking about it over
the course of this conversation. How does that impact
hiring? Yes. So with it as inflation raises
. Ultimately, companies start to see the value of
the dollar goes down. Um And ultimately as that
happens that hurts consumers as they try to buy and
buying power, uh it starts to get decimated and
that is the biggest concern right now is that if
demand starts to slow down, which we've already started
to see an advertising already started to see in a
few other industries, then ultimately these companies will not
have the same capital to be able to invest in
hiring and thus will pull back and thus will narrow
their focus on on fewer projects and their corporate,
what do you and your team make of the jobs
numbers right now. And what does it say about
the everyday american out there? Have they stopped looking
for jobs? What is the current status with a
lot of these openings that have been out there for
a long time but are going unfilled by major companies
? Yeah, I think it's a tale of two
cities which is with knowledge workers. We're already seeing
the pullback happen, but with blue collar workers,
they're still incredible demand from companies and there are still
many open jobs as it relates to knowledge workers.
You're right. We still have had many open jobs
for quite a while, but companies have learned to
deal with it and they have been moving forward with
these roles still open and thus I think that they're
starting to think well we've had this role open for
69, 12 months maybe we actually don't need it
anymore and especially given the uncertainty of what the future
looks like, let's start to pull back. So
as it relates to the job numbers today, look
I think we're looking backwards and they look okay.
The biggest question is what happens as we move forward
. We've been talking about inflation, we've been talking
about the fears of ceos And I just worry about
what the next 3-6 months looks like if inflation does
not get under control. It does also make you
concerned about the great resignation sentiment and what this can
mean for current workers in these different companies, especially
in positions that are experiencing burnout. Um but I
also want to piggyback on what we're discussing in the
workplace here um for the past few months, everything
I feel like the narrative has been about every power
being in the hands of the employee or the job
seeker right now with employers offering big benefits packages and
also higher paychecks. Is that still the case?
Or is the narrative changing slowly with all of the
different economic pressures out there? It's absolutely changing.
We've been talking about the great resignation now for almost
a year and a half and that phenomenon has affected
almost every industry in our country that said, as
we started to see companies begin to pull back on
hiring, we're starting to see employees starting to settle
down, not moving as much and actually begin to
look for more work. So my expectation is,
is that we are going to see the pendulum shift
. Um Absolutely. In the last 13, 14
years, as we have been in this bull market
, the pendulum has shifted towards employees having more of
the power. But now as the economy begins to
contract as inflation begins to rise, I expect the
pendulum to shift backwards more towards employers and employees beginning
to settle down and not moving around as much as
they have been in the last two years. If
the pendulum as you mentioned, does shift to employers
, what do you think this means a little bit
of a curve ball for you. But what do
you think it means for the organized labor movement?
We've seen today, News of a strike coming for
Boeing. We've talked about organized labor movements across the
board with major companies like amazon Starbucks Apple, it's
been happening and strengthening over the course of this pandemic
. Do you think this takes steam out of a
lot of those movements? If we continue to feel
a lot of these pressures? It depends on the
industry. And so, you know, as you
talk about companies like Boeing and amazon, we haven't
seen demand destruction happen there yet. And so I
believe that those labor unions still hold quite a quite
a lot of power. But if you start to
see some of these companies top lines coming down,
I do think that that's when you're going to see
these labor unions have to come back to the table
and unfortunately, they will not have as much power
as they've had in the last few years, especially
as this money comes out of the economy. One
of the things we haven't discussed in this conversation is
quantitative easing. Easing is now starting to end.
And so you have two things happening at once with
inflation rising and QE ending and we've never been here
before. And so we'll see what happens. So
good to have your perspective. That's Nolan Church co
founder and Ceo of Talent marketplace continuum.