As the curtain rises in 2024, the interplay between politics, economics, and financial dynamics takes center stage, presenting a multifaceted landscape for businesses, job markets, and recruiters alike. One of our most important functions is to systematically research the ever-evolving marketplace. This post delves into the anticipated impact of the 2024 election year, encompassing not only hiring and economic shifts but also the repercussions of potential high interest rates and inflation, providing essential insights for the recruiting and job-seeking community.
Elections herald policy changes, and the 2024 race is poised to introduce shifts in regulatory frameworks, taxation policies, and government incentives. Recruiters must remain vigilant to these changes to predict skill demands and hiring trends across various sectors. Experts at Fidelity believe a Republican presidential win and congressional win will mean renewal of the 2017 Tax Cuts and Jobs Act, which would otherwise expire in 2025. On the other hand, a Biden administration would likely promote tax hikes on wealthy households to support his 2022 Inflation Reduction Act.
Additionally, the post-election economic landscape, including potential impacts on inflation and interest rates, will play a significant role in shaping business strategies and hiring decisions.
Economic policies post-election can sway business confidence, with high-interest rates potentially impacting investment and hiring decisions. Nearly identical shares of Republicans and Democrats view improving the US job market as a priority. OSISearch advises recruiters to monitor economic indicators closely, including inflation rates and interest rate adjustments, to assess the health of the job market and make informed decisions about recruitment strategies during periods of economic uncertainty.
Oil and gas also play a major role in shifting economies. Since the Biden administration has been in power, they have depleted the Strategic Petroleum Reserves (SPR) in an effort to reduce consumer prices at the pump. By executive order, Biden essentially put a moratorium on US drilling, resulting in our need to buy oil from other nations. However, this seems to be a temporary fix as the price at the pump is destined to rise again. Further, the global economic asymmetry has and will negatively impact our economy. Republicans argue that the 180 million barrels used from our reserves over the last 3 years put Americans at risk if real emergencies occur. Stopping domestic drilling and increasing reliance on foreign countries creates a cycle of increased oil prices and increased risk, all of which will continue to negatively affect hiring strategies.
The impact of high interest rates and inflation on recruitment strategies cannot be overstated. Recruiters should prepare for potential changes in compensation expectations, navigate evolving workplace norms influenced by economic dynamics, and remain agile in responding to financial shifts that may affect hiring initiatives. A strategic approach to talent acquisition that considers economic realities is essential for sustained success.
In the face of high-interest rates and inflation, job seekers may place increased emphasis on financial stability when evaluating potential employers. While inflation has reduced from 9% in June 2022 to 3.4% in December 2023, with layoffs in major banks and aggressive interest rate hikes, economists are less optimistic about job growth. Recruiters should be equipped to address questions related to salary structures, benefits, and long-term financial security during the hiring process, emphasizing the organization’s ability to navigate economic uncertainties.
The 2024 election will be a milestone in discerning conflicting agendas. Recruiters and job seekers alike must be attuned not only to political changes and economic shifts but also to the potential impact of fluctuation economic indicators including interest rates and inflation and US debt which is at the center of high inflation and thus a lack of professional jobs. The Bureau of Labor Statistics (BLS) reported that the U.S. economy added 275,000 jobs in February which on the surface seems like good news however, unemployment rose to 3.9%, the highest rate since January 2022. Again, there is a distinct asymmetry given these two reports, causing doubt of the overall US economy health. Federal Reserve (Fed) Chair Jerome Powell suggested he needs to see more evidence that employment is slowing before interest rates are reduced. So, until such time that debt, unemployment and rising prices improve simultaneously, companies will not invest further, and the jobs market will continue to languish.