Dive Brief:
- U.S. workers' wages grew 3.2% in the last year, increasing by $0.90 to $28.71 per hour, the Workforce Vitality Report from the ADP Research Institute found.
- "The labor market has shown signs of a slowdown. After accelerating at the start of 2019, annual employment growth has leveled off to a modest 1.7 percent in September," ADP Research Institute Co-Head Ahu Yildirmaz said in a news release. "While job switchers continue to enjoy wage growth of 5.1 percent, employers appear to have reached the limit of what they are willing to pay workers to entice them to switch jobs."
- The report showed that wages were on a steady but upward climb until Q3 2019, when they began leveling off.
Dive Insight:
Economists aren't unanimous in their predictions of an impending recession. According to the October 2019 edition of The Wall Street Journal's Economic Forecasting Survey, 47.5% of economists surveyed predict the next recession will start in 2020. Twenty-seven percent say it will begin in 2021, while 7.5% and 10% pointed to 2022 and 2023, respectively, as the years for recession.
Regardless of a recession's exact timing, HR leaders can take several steps to prepare for a potential downturn in the economy. First, HR may want to consider getting into the right mindset for planning by adopting transparent practices, Bhushan Sethi, partner and joint leader of the Financial Services People and Organization practice at PwC, previously told HR Dive. "Organizations, regulators, suppliers want to know these aspects," Sethi said in reference to how employers plan to face stock market changes and other external factors. "But the old adage of treating people with respect, and engaging people early on with some humanity, I think that's a professional way of operating any business." HR needs to approach layoffs carefully, as well. Employers need to be ready to have clear, non-discriminatory reasoning in their choice to layoff certain people, Shipman & Goodwin Partner Daniel Schwartz previously told HR Dive.
