I feel like supply chain issues are worth a mention here. The labor market has been super hot, and finding new employees is a chore. At the same time a number of sectors outputs have been rate limited by supply chain issues. Do you reduce shift work and lay off salaried staff while you wait for the supply chain to catch up, or do you use a combination of stimulus money, cheap debt, equity sales, etc... to bide your time until things are back to normal?
In the last year or two, at the peak of the employment boom, the answer was almost certainly to bide your time. If and when the supply chain returned to normal, you would then be in a good position to restore output to meet demand. If you had laid off a bunch of folks, you would have found yourself scrambling to rehire in one of the worst employment markets (for employers) in history.
However, with interest rates rising and a potential recession in the near term horizon, that equation might change. We could (and already) seeing more layoffs. I think after a year or two, we are going to start seeing productivity snap back as a result.
In the last year or two, at the peak of the employment boom, the answer was almost certainly to bide your time. If and when the supply chain returned to normal, you would then be in a good position to restore output to meet demand. If you had laid off a bunch of folks, you would have found yourself scrambling to rehire in one of the worst employment markets (for employers) in history.
However, with interest rates rising and a potential recession in the near term horizon, that equation might change. We could (and already) seeing more layoffs. I think after a year or two, we are going to start seeing productivity snap back as a result.