The economy is turning a corner - don't get left behind

Mary Wellman

~ 5min read

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~ 5min read

It’s official. The economy is recovering faster than expected. And as always, there’s a lag while organizations adjust to these new market conditions. The result? Many are at risk of being swept up in a last-minute hiring scramble along with everyone else.

Today we’re speaking with Dan Woodward, EMEA Sales Director at mthree, to find out why smart companies are taking action now.

> A false lead from the big names

“Companies like Meta, Google, Amazon and Apple are still on a hiring freeze or announcing further layoffs”, Dan says. “At the moment they’re not luring talent away from other companies. So everyone else feels like they’ve been given a bit of a breather.”

This lack of pressure is true until suddenly… it isn’t.

“Six months down the line, everyone will be saying they wish they’d kicked off their hiring plans six months ago. I know that's what you'd expect to hear from someone in a commercial role, but the signals in the business world speak for themselves."

As reported by the BBC, a Deloitte survey published in April 2023 revealed that chief financial officers at the UK’s largest firms are feeling significantly more optimistic than they were at the end of 2022 – while still wanting to mitigate risk.

> Early signs of an economic turnaround

Although we’re not out of the woods yet, in February and March 2023, numbers emerged across the world that suggest the economic outlook is improving.

The US Treasury stated that the size of the US economy is now more than 5% above its 2019 level. They also describe the labor market recovery as “exceptionally strong”.

In the UK, the Office for National Statistics said gross domestic product has exceeded forecasts, rising 0.3% in January instead of the expected 0.1%. In light of the government’s Budget on 15 March, their prediction for overall GDP growth in 2023 has been upgraded to -0.2% from the previous -1.4%.

Similarly, the European Commission announced three months of falling inflation, stating that “the peak is now behind”. They conclude that economic activity in the EU will avoid a contraction in the first quarter of 2023, again defying predictions.

> Demand still outstrips supply – despite ongoing tech layoffs

It’s interesting to note that in some regions, the skills gap continues to widen. On 20 March 2023, McKinsey reported that “German companies have focused on filling tech jobs, yet the tech gap in the German economy continues to grow—from 700,000 open positions in 2023 to an expected 780,000 by 2026.”

You might anticipate that these open positions would be neatly filled by employees who’ve been let go, but there is still a shortfall.

This situation is reflected in North America too, the report goes on to say, where “about 80 percent of tech workers who had been let go in 2022 found a new position within three months, and new tech job postings far outnumbered laid-off workers. Considering that Europe’s tech industry was hit with fewer layoffs, the German tech talent gap is unlikely to vanish anytime soon.”

> The risks of hesitating to hire again

The majority of firms that have been languishing in a hiring freeze since 2022 are continuing to stay still, despite these economic shifts. This means history is repeating itself. It’s only a matter of time until restrictions are lifted across the board and the same old talent tussle resumes.

“People always perceive it as risky to be among the first to take action”, Dan says. “Which is certainly true from one angle. The thing is though, it’s also risky to be the last.”

If you start developing the talent you know you’re going to need – ahead of time, while things are quieter – you’re protected against the inevitable future chaos.

“We’re already seeing a wave of companies that are actively un-pausing their hiring. By the end of 2023 and into 2024, once the market is buoyant again, will you be protected because you’ve been proactive too? Or will you find yourself back behind the 8 ball?”

> Mid-level talent: a catch 22

“Organizations tend to want to hire people with three plus years of experience”, Dan says.

“Understandably they have concerns about kicking off a junior talent program that involves a lot of upskilling and active management. For a long time, that’s why business leaders were happy to pay a premium for mid-level talent. Because they need people who can make an immediate impact, get on with their jobs and drive project work forward to hit targets."

So – what’s changed? Well, Dan explains, the problem hiring managers are grappling with now is that the price of mid-level talent keeps getting more expensive. It used to be the case that companies struggled to compete for senior talent. Now they’re struggling to compete for mid-level talent too.

“Over recent years the mid-level wage bracket has shot up significantly. The supply in the talent pool is shrinking against the level of demand. Companies that can afford to pay huge salaries are paying huge salaries, which leaves everyone else in the lurch. They just can't compete with the biggest names in tech.”

The good news? For businesses that are in the same boat, Dan says, there are innovative solutions for getting around this problem.

“That’s one of the main reasons why clients turn to us at mthree. Especially those who want to hire for diversity and so are struggling with an even narrower talent pool.”

> How to build your own talent pipeline towards mid-level roles

We all know the cliché. The best time to plant a tree was 20 years ago, but the second-best time is today.

Using a Hire Train Deploy program like mthree, you can invest in your workforce to build an internal pipeline of trained, experienced talent. Our not-so-junior talent arrives ready to make an impact from day one, armed with the skills you need, and with external support to continue their upskilling journey. The training has been totally taken off your plate. And after two years, you have the option to hire the graduates as your permanent employees at no extra cost (95% of those who reach the end of their placement convert to stay with the client).

“Imagine what this could mean for your organization”, Dan asks. “Rather than waiting another six or 12 months until the right path is obvious in hindsight, you could take a step today that will see you thanking yourself later down the line.”

> Should you act now to secure the future of your team?

The truth is that it depends on your mindset and your past experience. Being at the forefront of this shift in hiring patterns won’t make sense for every business.

Have you struggled with employee attrition before? Does this change your perspective on the tradeoffs between hiring for the short term versus the long term? Are you uncomfortable with the idea of leaving your resourcing needs till the very last minute?

If so, Dan urges, the answer is yes. “Planning ahead is the way to go. Especially if you’ve heard rumblings that your organization is about to lift their hiring freeze. You can use the fact that the economy is recovering quicker than anticipated to your advantage.”

Find out more about how mthree’s Hire Train Deploy program could help you lead the way with your hiring strategy in technology, banking or business.

> Mary Wellman

Mary Wellman is a Senior Marketing Executive at mthree. She’s a marketing generalist who creates concise and useful content to help solve challenges for our clients. With a STEM degree, an MBA, and 30 years of B2B communication expertise, she is a seasoned business editor who spearheaded the digital transformation of five media brands and events. She understands how AI and information density shape the new business landscape.


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