The 2020s have been an economic rollercoaster. It looks like 2023 is set to continue the trend. Are you ready for what the new year has to bring?
We know. You’re probably ready for something boring. The last few years have seen one crisis after another. The relatively strong environment of 2019 gave way to the pandemic in 2020. Once the COVID restrictions began to lift, the economy boomed…but that led to its own problems. The last 18 months have included the Great Resignation, mounting inflation, rising interest rates, and now signs of slowing growth.
What does 2023 have in store? Here are the economic trends your staffing firm should look out for in the coming year:
Economic Trends to Be Mindful of in The New Year
Most people see a recession on the way. This could lead to a sudden drop in demand for your staffing services. However, a contraction doesn’t mark the end of the story. A recession early in the year could open the door for sizable growth down the way, as the economy rebounds later in the year.
All told, 2023 looks poised for a volatile economic situation. This is true even if a dramatic downturn doesn’t take place. As such, you need to stay nimble and react to market changes as they occur.
Harder to Access Capital
Interest rates have pushed dramatically higher over the past year. This has had a wide-ranging impact on the economy. The most immediate effect has come in the realm of financing, with higher rates making borrowing more difficult and more expensive.
As a result, businesses have a harder time getting the cash they need. This could have a significant impact on your clients. Beyond the effects of the short-term economic dynamics, capital will be less available. This could lead to lower growth rates in the foreseeable future.
Rising interest rates are meant to get inflation under control. During 2023, you can expect price hikes to moderate. However, just because the pace of increases has slowed doesn’t mean prices will drop in the near term.
The pressure from higher expenses will persist into 2023. This will eat into corporate budgets across the board. The inflation over the past year will force many of your clients to raise wages headed into January. Understand these impacts and plan accordingly.
The factors listed above will combine to complicate spending decisions in 2023. A bumpy economic situation will lead to patches of limited revenue, while high prices will pump up expenses.
As a result, look for waves of cost-cutting. This trend has already impacted many of the world’s largest companies, from Facebook parent Meta Platforms to Amazon. Expect more of this from your clients next year.
The legacy of the pandemic is still with us. In practical terms, that means an ongoing emphasis on remote recruiting. Both candidates and your customers will continue to rely on virtual tools for the foreseeable future.
For you, that means keeping up with the latest improvements in technology. That way, you can become a resource for both sets of stakeholders.
Looking to Make The Most Out of 2023?
2023 promises to be a complicated year. As we’ve seen, early signs point to a bumpy economic situation. In such an environment, it pays to be prepared.
Start with a strong financing plan. By partnering with Frontline Funding, you can add to your flexibility while maximizing the resources at your disposal. As such, you’ll be prepared to navigate the challenges and capture the opportunities that 2023 presents.
Contact Frontline today to get the most out of your staffing firm.