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Inflation, Maximum Unemployment, Geopolitical crisis in eastern Europe, roiling financial markets – Yes Virginia there is a Santa Clause, but you’ll be surprised by the appearance. The good news is it’s you.

May 6, 2022

Inflation

As I write this, the US markets are down again on the day after the Federal Reserve raised interest rates by a half point.  The first time it’s done that since 2000.  After a brutal few weeks across all major indexes, where losers ate the winners for breakfast, lunch and dinner, Americans and in fact the world are looking for signs of relief as rising prices outpace the gains in employee wages.

That relief is on its way in the form of rising interest rates that are designed to cool the economy just enough to slow the rampant increase in consumer prices. The problem is that these macro-economic maneuvers are just that – macro, meaning large-scale overall shifts. These macro shifts primarily have immediate impact on the financial markets, but rarely provide any kind of immediate relief to consumers.

This is where we as consumers, voters, workers, business managers, heads of household and business leaders must remember to take a pause and have perspective.  As Jamie Dimon told Bloomberg TV – “We’re a little late but remember two years ago we had 15% unemployment and no vaccine. People should take a deep breath and give them a chance. The sooner they move the better.”

Meanwhile, I’m a big proponent of taking action where you can in your own life where you have control. Big business will want you to keep spending, so the economy keeps growing. Heads of household and small business owners want to control expenses to preserve capital and increase savings as the threat of a rainy day seems more prevalent. Remember that the answer is usually somewhere in the middle, and extreme measures usually don’t work for the long haul.

Awareness is the key – it’s so easy to get distracted by all the noise in the news. Remember to take care of yourself at the most fundamental levels. Eat healthy, get good sleep, have meaningful conversation with your family and friends, and most of all keep moving. Ideally you have an exercise regimen, but at the very least take some walks, stretch your legs, and look up from your phones. The view is much better when you look up.

Maximum Unemployment

While it’s hard to ignore rising prices, ignoring the lack of available talent in virtually all industries is impossible to ignore. Again, there are no quick fixes. Decades of anti-immigration policies, declining education rates and birth rates, compounded by “The Great Resignation”, we started seeing in 2019 and then accelerate during the pandemic have produced a painful imbalance in the labor market.

I remember when I was first entering the professional job market in the late 80’s, large employers in financial services hired largely based on education, some level of work experience and mostly on aptitude and attitude. In today’s market, businesses behave like they’re ordering breakfast at a five-star hotel and want everything on the menu that suits their fancy and their needs, unwilling to invest in the individual and demanding that each candidate check every box on their list of requirements.

But who can blame them? Employees seem to want everything too but aren’t willing to make a long-term commitment. The average tenure of an American professional worker is about 4 years, and the average tenure of an American consultant is as low as two years. How can anyone commit to developing for the long term when no one is willing to stick around?

This brings us back to the middle. Extreme approaches never work. We must have a fundamental awakening and awareness of the underlying causes of hyper-employment, and work together to address these factors by focusing on long term, structural change that will produce a change in behavior and attitudes in both workers and employers. Employers must be more flexible, and employees must take more responsibility in their futures. Voters must demand that their elected representatives engage in real dialogue to address the issues that prevent the nation from growing its workforce.

Crisis in Eastern Europe

No one can dispute that what we are seeing unfold in Ukraine is tragic and unnecessary. I will leave the rest of the discussion to those with more knowledge and experience. All we can do is work to provide relief for the millions of people who have been displaced. Perhaps part of the solution to our labor market deficiencies lies in the relocation of these valuable, intelligent, and talented people to places where their skills and experience are needed most. Some countries are fast tracking the immigration process to help the people themselves and their own labor shortages in the quest to make lemonade out of the lemons of war. In all, we must do more.

Clients are starting to evaluate other options around the world for deploying talent to de-risk their talent footprint to perceived safe havens, including Canada, Mexico, and Argentina.  These countries are rich with talented, motivated, and qualified workers in technology, banking operations and customer facing roles. In 2021 GSG started our UK and Canada subsidiaries to further develop our footprint in support of clients seeking alternatives to the US market, where the tight labor market has become more difficult to engage motivated, qualified talent in the right geographic locations.

Roiling Financial Markets

As I and many of the pundits have predicted, the financial markets have continued to be a volatile place to invest, with most major indexes and exchanges plummeting over the past few weeks to new pandemic era lows. There is some good news out there though on the horizon.  Investment firms are looking for new ways to provide access to alternative investments previously only available to the super-wealthy, interest rates are on the rise which if inflation does cool and rates stabilize will bring back the health of fixed income vehicles. Asset allocation is back in vogue as investors seek to diversify their holdings and pull back from what has been a rocket ride to gains over the past several years in equities.

Those employees that decided to retire early based on the stock market gains are now re-thinking their decisions, and if some of those workers re-enter the workforce, we may see some relief in the US labor market as well.

Resilience in the face of Adversity

Stay true to yourself, your mission, your family, and your values and remain calm in these turbulent days. Tomorrow will be different from today, and a year from now will be vastly different, so remember to be your own Santa Clause and give the gift that keeps on giving – YOU.


John Henning is the Chief Client Officer at Granite Solutions Groupe. He has over 35 years of leadership experience in the financial services and technology industries, and currently oversees all client account management, professional services, marketing strategy, business development and sales operations for GSG.