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What to consider before changing jobs now


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It’s still an employee market, even amid high inflation and talk of a possible recession.

But some signs could start to change.

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One big reason: The Federal Reserve’s 0.75 percentage point interest rate hike announced Wednesday is unlikely to be the last as it works to bring down historically high inflation.

This could lead to “some easing of labor market conditions,” Federal Reserve Chairman Jerome Powell acknowledged on Wednesday.

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Record job openings, which totaled 11.2 million in July, could “fall significantly”, he said. The rate increases could push up unemployment, which stands at 3.7%, according to the latest jobs report.

Recent research from Challenger, Gray & Christmas found that layoffs are at record highs while the job market remains strong.

In the first eight months of the year, employers announced plans to cut 179,506 jobs, the lowest total since Challenger began tracking job cuts in 1993.

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The 2022 total is also down 27% from the 247,326 cuts for the same period in 2021.

Today, there are two job openings open for every unemployed person in the country, a “pretty remarkable ratio,” according to Andy Challenger, senior vice president of Challenger, Gray & Christmas.

“This is the hottest job market we’ve seen in our lifetime, and it’s not going to stay that way forever,” Challenger said.

It’s always a good time to change – with a caveat

As inflation hit historic highs, a recent survey by Bankrate.com found that 55% of workers say their income has not kept up with rising household spending.

The best way to negotiate a big pay rise often comes with a new position, experts say.

“One of the best ways to increase your salary is to look outward,” said Vicki Salemi, career expert at Monster.com.

Inevitably, today’s hot labor market will cool down. It’s just a matter of when.

You’re not going to find a better environment to find a new position or renegotiate in a year.

Andy Challenger

Senior Vice President at Challenger, Gray & Christmas

Six months ago, Challenger said he would have predicted the labor market would have cooled more than it has. By this time next year, it will likely have cooled considerably.

But now might still be a good time to make a change, he said.

“If you’re unhappy and feel like you’re underpaid, you’re not going to find a better environment to find a new position or renegotiate in a year,” Challenger said. “It’s very, very unlikely.”

A caveat to this is that many companies have a last-in, first-out policy, which could make newly hired workers more vulnerable if a company decides to carry out mass layoffs, he said.

Some areas are more vulnerable to cuts right now, according to Challenger research. Cuts in the technology sector have increased by 70% compared to the same period last year. Meanwhile, cuts in fintech jumped 765% from a year ago, while the auto industry saw a 232% increase in job losses.

Layoffs don’t have to be the trigger for an increase in the unemployment rate, Challenger said.

If the labor market participation rate increases – and people who are currently on the sidelines come back – it could increase unemployment as the number of vacancies decreases and it takes longer for people to fill. people find jobs.

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