Would a Recession Significantly Deepen Talent Pool?
Layoffs and hiring freezes have hit the tech industry in recent months as employers seek to slash costs in advance of a possible recession. According to Layoffs.fyi, 527 tech startups have shed more than 70,000 employees through the first seven months of 2022, which could provide a possible source of talent for AE firms looking to fill technology positions.
While the AE industry shows no signs of slowing down, could firms struggling with a tight labor market benefit from the downsizing of other industries that employ architects, engineers, and environmental consultants—such as energy and utilities—if a recession occurs? Not necessarily. If a recession happens, it could be unlike others in recent memory. Since businesses have had such difficulty with hiring in recent years, they may be more reluctant to cut staff—especially those technical and office workers who would be prospective AE firm recruits—than they have in prior recessions, particularly if the economic downturn proves mild.
“We don’t have an exact historical analog,” Glassdoor senior economist Daniel Zhao told public radio program Marketplace. “We haven’t had a period of extreme labor shortages followed by a recession.” Meanwhile, the U.S. economy added a half-million jobs between June and July 2022, job openings are at record highs, and unemployment is tied for a 50-year low at 3.5%—even with the tech downturn.
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