Layoffs are back in the news almost every day. They started in big tech, but now we’re seeing them hitting Wall Street, the media, and the food industry, among others.
The economy has always been cyclical, and what comes up must come down. That includes staffing levels. We’re in a strange economic state right now, and with 3.5% unemployment, many employers still can’t fill certain skilled positions. Job openings just skyrocketed to a 5-month high.
With the economy tightening, companies like Google, FedEx, and Goldman Sachs, to name a few, are having to winnow down their teams, at least for the moment, by tens of thousands of jobs. And, as many businesses’ internal teams get leaner, leaders will have to think in creative new ways about how to keep moving ahead on quarterly and annual goals. Keeping the trains running will, in many cases, require a constant focus on operations, as well as recruiting, retention, and staying in touch with former employees in case there is an opportunity to bring them back into the fold (we call them “boomerangs” at Marcum).
In the accounting profession, where the competition for talent has been fierce the past few years, the current wave of layoffs in other industries (staff reductions have not hit accounting at this point) is an opportunity for firms like Marcum to attract people with a variety of skill sets that complement our business. We are on a perpetual hunt for talent; talented accountants, technology professionals, and others with specific expertise, and we are starting to tap into this new and unexpected talent pool. It is an exciting development for us that will bring new opportunities to create value for our clients.
Another silver lining in times of layoffs and downturns is that they historically spark new business creation. Some of America’s best-known companies started during downturns, including household names like Microsoft, HP, Trader Joe’s, and Method cleaning products.
In a business environment like this one, many seasoned professionals severed from their employers will decide to put up a shingle, rather than go back into the job market. Those with years of experience and well-developed networks often hit the ground running and are capable of creating the kind of growth-oriented companies we serve at Marcum.
We welcome the opportunity. We serve entrepreneurs at every stage in the business life cycle, from startup to scaleup, and our team excels at advising founders as they navigate the challenges and inflection points that come with growing a business. As an entrepreneurial firm that serves entrepreneurs, we relish the challenge of helping founders turn their vision into reality—and potentially into the next significant middle-market firm in their industry.
With the Fed raising interest rates again earlier this week with the promise of more to come, we could see more layoffs before the employment market stabilizes. My advice to employers is to stay resilient. If there’s one thing that’s certain in life, it’s change, but change can often bring opportunity to those who are ready for it.
Have a great weekend, everyone!