Appcast: How inflation & tech impact hiring success

HR leaders, don’t miss out: Join us in Las Vegas for free as a VIP guest at UNLEASH America.

We sit down with an UNLEASH America speaker very much in demand: Andrew Flowers, lead labor economist at Appcast.

At the Las Vegas conference, he will be appearing at the pre-conference Day Zero Vendor Summit, where attendees can gain insights from industry peers and learn what it takes to get an industry advantage.

But that’s not all! Flowers will also be speaking at UNLEASH’s Talent Acquisition Summit, and on a specialist Main Stage panel on how to unleash the US talent marketplace.

Economist, trusted analyst, and strategic expert

As a labor economist, as well as director of research at Recruitonomics, Flowers leads a team of analysts and researchers who work to give clear insights on the evolving labor market, ongoing economic challenges, and the need to transform in the face of them.

Andrew Flowers, labor economist, Appcast.

Indeed, on the UNLEASH America main stage labor market panel Flowers will be speaking to how the changing labor market is impacting workforce prospects, as well as what upheaval in the tech sector means for other industries, and how to create a strategy for success to navigate the evolving world of work in years to come.

As Flowers has frequently appeared as an expert voice in The New York Times, Wall Street Journal, CNBC, NPR’s Marketplace, and Business Insider, and has been a quantitative editor at FiveThirtyEight as well as an economic analyst at the Federal Reserve Bank of Atlanta, he is one of the voices UNLEASH trusts time and time again to help us analyze for you what big changes mean.

A clear-eyed view

For example, at the start of the year when ‘Big Tech’ layoffs were making headlines, UNLEASH reached out to Flowers to find out if there were any positives or a clear way forward — at a time when much media reporting was alarmist and focusing on the potential for technology sector redundancies to be the harbinger of wider disruption.

As he said in January: “The layoffs are happening but they’re concentrated in a few Silicon Valley mega-corporations. The broader technology industry has seen a slight uptick in layoffs, nothing catastrophic, and the broader [US] economy is powering along.”

With Flowers always looking to find a strategic solution to any labor market or economic disruption, let’s get into his pre-show Q&A.

Dan Cave: What are the big labor market stories right now and how do you disentangle them?

Andrew Flowers: The way to split it up is that we see the overall labor market as tight. From there, we can highlight that the tech sector is the exception to the labor market.

Outside of the tech sector, we can comment that employer demand for labor is resilient despite economic anxiety.

But, what we need to understand is that there is no one, overall labor. While most sectors are still seeing high levels of job openings, tech, and housing or construction, to some extent, are the exceptions.

DC: What role does inflation, the potential for a recession, and high-interest rates play in all of this?

AF: They help define the macroeconomic outlook for the rest of 2023. There’s one dilemma which is inflation is entrenched at the moment and it will be falling but not as fast as some forecasters had hoped.

On the one hand, we have that stubbornly high inflation problem, and we’re seeing financial distress in the banking sector in the US, and to some extent in Europe, emerge.

We also have to take into account the odds of a recession because of stubbornly high inflation and then there are continued increases in interest rates that kind of tamp down on business investment and consumer spending.

There have been a lot of expectations about pausing further interest rate hikes and focusing on shoring up the banking sector, which, ironically, would be good for the labor market in the near term — assuming the contagion doesn’t engulf into a wider financial crisis like in 2008.

Central banks are currently facing this dilemma: between financial distress and entrenched inflation.

DC: What does this macroeconomic outlook mean for hiring, then?

AF: Outside of these stories, there is a lot of focus on pay transparency legislation. We’ve been doing a lot of research and covering this topic on Recruitonomics a lot. The upshot of the research is that pay transparency is good for workers in terms of boosting their engagement and giving them more bargaining power.

However, it’s very disruptive for recruiters as that will impact how a job ad performs when you include wage or salary ranges.

The benefit is you get more interested clicks and applicants when you have wage ranges, and salary ranges at or above market, but you’re going to get fewer applicants, However, those applicants are of higher quality.

DC: Are there any other trends affecting recruitment?

AF: In the news, we can often focus on the quarter-to-quarter but there are long-term trends that can impact recruiting years or even decades into the future: demographics, technology, and politics.

On the demographics side, I’ve been beating the drum about declining birth rates and the aging of the population and how that affects expectations of labor shortages in the future and how that won’t get better barring a severe downturn or recession. The demographic impact is pretty sharp.

In my UNLEASH America talk, I’m also going to talk about how technology, namely technology that enables work from home, is changing recruiting and flexibility.

Since the pandemic, work from home has become destigmatized and whilst there has been a move to return to more in-person work it hasn’t fully reversed the change. We’re still seeing something around the order of three or four times as many hours spent in the economy working from home, compared to pre-pandemic times.

So that’s an interesting section about technology and how it’s shaping recruiting.

Finally, I’m going to talk about politics and how, especially with the tight labor market, you’re seeing increased efforts at unionization drives in the US more of the labor workshop urges.

I won’t shy away from how these political forces impact recruiting.

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