What: Tables are turning and recruiters now are in a more favourable position towards candidates.

Why it is important: CEOs admit that they might have gone too far and are changing their mind. This might generate workers’ backlash (especially the younger ones) unless markets deeply turn to their disadvantage.

Several executives in various industries are now cooling off on the “whatever it takes” policy that has been the norm since the pandemic when it came to retaining workers. In fact, they are even cutting jobs. The wave of layoffs started in technology and has now spread to other industries such as toy manufacturing, chemicals, and payments.

Executives feel that the labour market has shifted back in their favour and they have more power in negotiations with employees. The US unemployment rate was 3.5% in December and hourly earnings were up 4.6%. Hiring was lower in December, however, and some executives are leaving positions open or scrutinizing hiring. The Federal Reserve is raising interest rates to slow wage growth, but investors and executives are divided on whether it will lead to a recession. Whatever the case, the CEO of ManpowerGroup Inc. says employers are not as anxious and can take their time when it comes to hiring.

January is usually the peak month for layoffs, even during robust growth. For instance, Meta CEO Mark Zuckerberg declared 2023 as the "year of efficiency" for the company. After announcing 11,000 layoffs in November, the company is scrutinizing its hiring needs and reducing management layers. The rise in job cuts is a result of an end to the pandemic-driven growth and low-interest rates making technology investments cheaper and allowing companies to operate with a smaller workforce. Job cuts also serve as a signal to Wall Street that executives are focused on financial discipline.

As a consequence, companies say employees are staying in their jobs longer. Some companies, like Thermo Fisher Scientific, are having more success hiring data scientists and others with advanced skills. Companies are using this moment to reconsider their corporate priorities, including reviewing corporate perks once considered must-haves to remain attractive to potential candidates.

The bosses are back in charge