Alberta is no stranger to extreme business cycles. But what’s been happening in the last few years is something new; it feels like a new reality is setting in.
We’re lagging behind Canada in unemployment. Some businesses are forging ahead, and some are hunkering down.
If you’re hiring, you’re probably awash in applicants. If you’re downsizing, you’re deciding on your core team and the strategy to pull you through.
Here’s a little myth-busting about what high unemployment rates can mean for your business.
It’s all double-edged swords. When you’re dealing with peoples’ jobs, that’s always the case.
High unemployment is an “employer’s market.” Expect hundreds of applicants from a single ad and get ready to wade through the resumes.
However, a lot of resumes don’t necessarily equate to better applicants. The expense implicit in hiring and training demands due diligence (even more than usual, given the volume).
It’s tempting to think that in periods of high unemployment, existing employees should show up earlier, be a little more eager, and jump into projects with a bit more gumption. But it rarely works like that, and it’s up to you to decide if they want to introduce an element of fear into the workplace.
If you’ve been nervous about replacing someone who should have been shown the door some time ago, high unemployment rates (and a lot of candidates to choose from) might be the motivator you need. But, if it looks like you’re pushing out someone opportunistically, it could backfire badly and injure the team’s morale.
Times like these can also mean less natural turnover. People who would have moved on, for whatever reason, may be inclined to stay. Here’s where you need to consider what’s best for the business: letting people go might be exactly what your business needs for a natural and healthy evolution.
If fewer people have jobs, then fewer people are spending. Bad headlines amplify the effect by scaring people to hunker down and sock their money away.
Down cycles affect industries differently. Liquor and discount stores tend to do well, while higher-end goods and services suffer the most.
Now is a good time to “take stock” and start asking what Alberta-based businesses, many of whom having built their internal processes around delivering higher-end products, are asking: How flexible are you in your offerings? Could a lower-cost offering fit into your business model? Down cycles are a great time to get creative about how to fix what’s not working in your business.
Watch your Startup Flank
When they can’t find a job, some people will reach down deep and make a job. New businesses and startups peak during high unemployment, as opportunity is thrust upon those who have been laid off.
We know what happens to most new businesses. Failure rates are astronomical BUT some of them flourish and they can be real disruptors. They approach their industry from other angles and often blast holes in the old paradigms that established businesses rely on.
Are you still innovating and staying fresh? These aren’t just buzzwords. In this economy, it’s more likely than ever that a startup will come from behind and compete in unexpected ways.
The job market is ever-changing, and today’s high unemployment rate is all part of that cycle of change. What we’ve seen, time after time, is that people and businesses are usually more resilient than we expect. Let your business decisions rest on your goals, not the current state of the market, and you’ll be better positioned for when the tables inevitably turn.