What will the global 'stagflation' mean for hiring?

Many of us will be acutely aware that inflation is soaring around the world.  In the US inflation hit 8.5% in March of this year whilst in the Eurozone inflation hit a record high of 7.5%.  Global inflation is now forecast to be 6.2% this year -  as prices shoot up off the back of COVID and the war in Ukraine.

A natural impact of inflation is that the job market heats up and those of us working in Talent Acquisition (TA) will be acutely aware of that given the unprecedented rise in hiring demand and the lack of talent (there are c.17m open positions in the US today meaning almost one in 9 jobs are vacant and there are >5m more vacancies than unemployed workers).  

Even with modest inflation we are seeing a surge in hiring demand as a result of increased employee turnover rates.  Whilst many believe that the 'great resignation' was a direct result of the global pandemic, evidence shows that employee turnover has been increasing for years, the pandemic merely slowed it down for a period before it came back with a vengeance.  

Heightened inflation will naturally increase salaries for in-demand workers but those salary increases will always be higher for workers that move companies, hence driving up employee turnover yet more and further increasing overall hiring demand.  

But now, according to the FT, we are facing a 'stagflation' where prices are rising but growth forecasts are rapidly falling. So what does that mean for hiring?  If growth falls significantly we should assume that hiring demand will also fall as companies scale back their own growth and expansion plans in the face of reduced consumer spending.  But even with modest or minimal growth to global economies I believe inflation will continue to drive employee turnover rates and keep job vacancies high in the short to medium term.

Unless we face a prolonged recession, the challenges for talent acquisition leaders are not going to diminish in the short-term.  Whilst most TA leaders are fire fighting and focusing on building capacity to manage unprecedented demand, a few are focusing on more strategic measures to build medium to long-term business advantage.