Thoughts on the Recent CNBC CFO Survey

CNBC recently published the results of their Q4 CFO survey, stating that control of the job market and wages have been relinquished by the workers and are now in control of companies. According to this survey, the job market and wage growth have cooled, meaning that it should be easier to get qualified workers.

From our perspective, as we end 2023, the number of jobs has not really decreased, but the urgency to fill those open jobs has certainly quieted. During the Great Resignation, companies were hiring out of near desperation and were willing to invest time interviewing candidates that were at least a reasonable fit. But now, the shift has moved to tighter qualification tolerances, resulting in companies being more selective about who is granted an interview.

Slowing economies are not a new phenomenon, but this time will be different.

As economies begin to slow, so does the velocity of time to fill open positions. Companies become more selective and tend to interview more candidates before deciding to hire. The next phase will be the dreaded rounds of layoffs and hiring freezes. Current workforce conditions, meaning low participation rates and generational gaps, should keep layoffs and hiring freezes to a minimum and localized to certain industries rather than a more macro perspective.

Worker attitude.

From the workers’ perspective, they have become more pessimistic about their current company’s growth projections over the next year, and the unfortunate people who have lost their jobs have increased their pessimism about available job openings. If you worked in the collapsed high-tech market, the pessimistic attitude is certainly understandable, but the high-tech market is showing signs of a rebound. This attitude has made workers nervous about making job changes, causing a decrease in worker availability for hiring companies. Also, inflation has increased worker pessimism and has motivated them to ask for premium offers as well as leverage offers to get wage increases with their current employer.

There may be a shift, but companies shouldn’t get overly optimistic.

While it is true that the economy appears to be slowing according to the CFO Survey, most CFOs expect a “soft landing,” meaning the power companies seemingly may have will be short-lived or merely just a mirage. This economic slowdown, whether it be a full-blown recession or a soft landing, will exist with the reality that qualified workers will still have more options and more control than companies may expect.

One reason is that the generational gap between baby boomers and the following three worker generations is still too wide. Baby boomers have been leaving the workforce 12,000 people per day while Gen X, Millennials, and Gen Z have only been adding 7,000 workers, leaving a 5,000 worker shortfall.

Another reason is, according to the most recent Job Opening and Turnover Survey (JOLTS), the rate of people quitting jobs is as high as it was in February of 2020, even though worker pessimism is much higher than just a year ago. Workers are still willing to quit but, like companies, are much more selective about what company opportunities they will move for.

What does this mean for the worker and the employer?

For the workers, there are plenty of opportunities available, and we don’t predict that will change next year. Job changers and job seekers may experience a few more obstacles to navigate, and hiring processes may take a little longer in 2024.

For the employers, candidate experience in your process will still be important. Keep working to streamline your process to eliminate redundant and cumbersome steps. This is especially important if you want to recruit a currently employed person holding a bearish outlook of the broader job market that will need to be overcome to inspire a job move. If you believe that wages will begin to decline, we caution not to fall into that trap. Workers are nervous about inflation and will still expect offers to help offset the increased cost of living. Also, there are still fewer qualified people than there are jobs, and if you are courting someone who is employed, you would be wise to deliver strong offers to fight off counteroffer attempts by their current employer.