Business trends after the Covid crisis… While the covid crisis changes job preferences and employment trends, we observe the job rotation effect, which we follow as a sub-detail in the general employment market, during the crisis return. This shows that we need to monitor the rotation between the business lines as well as the new entry to the workforce in headline employment changes. This situation affects many dynamics, from filling job positions to the level of wage increases.
Comparison of JOLTS resignation and new hires data with wage increases… Source: Bloomberg
New normals in employment dynamics… The headline weakness in the latest employment data can be attributed to many factors. Yes, the new normals that emerged with Covid affected working from the office and the situation of contact works. There is still shyness regarding this and difficulties in filling the relevant positions. We agree on all of this. There is another fact that we would like to draw attention to: In the graph, you can see the comparison of resignation and new hires in the data announced by JOLTS. It is worth repeating: resignation, not dismissal... In other words, voluntary, initiative-based quitting or changing.
Now, we can summarize the rotation effect here as follows: In the Covid crisis, many sectors were closed and serious workforce loss occurred. Many sectors failed to show similar mobility in reopening in the transformation from crisis. In particular, there were factors affecting high-paying office work. Long-term unemployed people have been placed in low-paid service-based jobs within the framework of the necessity of earning an income no matter what. In fact, these people did not want to work in service-related lines of business; There was an orientation that took place out of necessity. Those who had to enter low-skilled jobs in order to earn temporary money chose to resign as the sectors opened up and return to their own professions, their main jobs.
There are also those who still have the hesitations of Covid. This is a fact; companies have to fill job positions in order to meet the demand for their goods and services in an inflationary environment. But for this they need to provide wage atractivity, that is, to pay more. People have turned to internet startups and financial markets to create new ways of income rather than working on payroll during the pandemic. In other words, working from the office became “out”, e-commerce and cryptocurrency trading became “in”.
Conclusion? The interaction we have described appears to be multilateral. Contact jobs and office jobs will be more difficult to fill unless they offer wage appeal. At the height of inflation, people rightfully demand higher wages in terms of their standard of living. While the Covid epidemic continues, health sensitivity is also involved. Companies will either slow down in finding employees in the current situation, or they will raise the wage scale if they want to speed up. At the very least, they need to reach a level that creates real wage increases. Just because payroll jobs aren't growing fast enough doesn't mean that people aren't working. It will be necessary to take into account the temporary work – main job rotation in the workforce rotation and the payroll work – personal initiative for entry and exit from the workforce.
Kaynak: Tera Yatırım
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