Home > Recruiting > Random Thoughts On Recruiting – Inflation?

Random Thoughts On Recruiting – Inflation?

October 30, 2010 Leave a comment Go to comments

There is talk going around now that the government has plans to try and foster an inflationary environment in order to pay down the debt.  There are those out there that have had the feeling that we would come into a runaway inflation period at some point here anyway. 

For a number of reasons, I don’t know that I buy into the inflation scenario anytime soon.  Even if the government tries to create it, I’m not sure we would have a normal inflationary period.  Inflation is too much money chasing too few goods.  So the government would pump money into the system and everybody would be flush with cash and borrowing power so prices of anything tangible would go up.  Your food would cost more, your cars, your houses etc…..  I’m not sure this post bubble economy would be willing to spend and drive up prices even if tons of buying power was made available.  But maybe.

So what would happen in recruiting if this were to play out and we had high inflation.  I think those of us still in the business would see an absolute explosion in business.  All of this inflation would be driving companies to try and grow, and they are itching to do that anyway after such a severe downturn.  Cash and borrowing power would be easily available, so there would be a ton of hiring and salaries would soar.  In our now reduced size recruiting industry, this would be incredible.

As I said, I don’t know that I see it playing out that way, at least for now.  But something is going to happen.  Either we’ll have a continued deflation with high unemployment and businesses that can’t see their way to growing aggressively, or we’ll see the inflation scenario or something in between.  Inflation is really tough on people whose salaries don’t go up.  If I had to guess, I would think we will see the government try to pump money into the system, but that it will only affect certain things and not others.  So we would see pockets of inflation in some areas but continued deflation or stagnation in others.  That could play out really well for recruiting also, where certain industries would thrive and the battle for key employees in those industries would ramp up.

Todd Kmiec

Todd Kmiec and Associates

todd@toddkmiec.com

  1. November 1, 2010 at 11:03 am

    What industries would thrive?

  2. toddkmiec
    November 1, 2010 at 11:26 am

    That’s a tough call and it’s probably not smart to bet on one or some. The first thought would be commodity related, so Oil Industry, Food Industry, Basic Materials like Steel and all of the companies and industries that service them. However, there are poeple who think we are in a commodity bubble, that we had a stock or tech bubble and that burst and rolled to a housing and building bubble and that burst and now rolled to a commodity bubble and that will be the next one to go. Think about gold prices now, it makes sense. If we have a commodity bubble burst we probably have a lot more deflation. But with money pumpled into the system, I would think the pockets of growth would be more industrial than consumer related. Companies want to grow, but consumers are not going to want to spend in any real way until more are working and salaries go up so I would look to big industry, infrastucture, maybe renewable energy and new industries like that and all of the industries that service or supply them.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: