The current economy is baffling the entrepreneur

Understanding the current downturn: High Interest Rates, Low Unemployment, High Inflation, Abundant Opportunities

The current economy is baffling. In my view here is a summary of the economy:

1. High level of job creation
2. Percieved economic slowdown
3. high cost of capital
4. high inflation

This month the US unemployment rate dropped to 3.5%, the lowest level in more than 50 years. The Federal Reserve, which keeps raising rates and trying to reduce asset prices, simply cannot stop the growth. 

Do you think economic growth is something that can be contained?

Look back to 1996 – when the internet just blew up and turned the economy upside down. 

Will W3.0 be the next stimulus that will create a new type of economic growth?

According to Josh Bersin,

“While some of this is due to the economic cycle (and the money pumped into the economy during the pandemic), I believe something bigger is going on. The labor market has fundamentally changed, and we’re probably never going back to the old market again.”

I agree with this. 

Fundamentally, several things have changed in the economy.

1. The “Gig Economy” is fueled by not just the contractors but by people that work full time
2. Companies are staffed at optimal levels; productivity is is high driven by automation, data and analytics
3. Investment in employee training is low but bound to return
4. Talent models have changed from local and general; global and specific
5. There is a general acceptance that off-shore/near-shore models means that a global talent force is deployed to manage top line.

Other considerations: Here are some questions 

1. Are people looking for creative ways to thrive in an economic slowdown?
2. Is cost shifting a standard in the employee costs structure?
3. Is your company using internal teams to manage projects that are executed by external consultants?
4. Should the rewards, PTO, sick-days and time-off framework be tied to compensation. Get paid for the days you work?