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With the economy cooling, companies are hiring less and asking employees to do more

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2 months ago

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With the economy cooling, companies are hiring less and asking employees to do more

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As office manager of an Indiana recruiting firm, Jolene Rosario enjoyed the predictable nature of her weekly duties – handling payroll and workers’ compensation insurance, paying invoices and answering employment questions from state agencies.

Several months ago, her boss asked her to also take on the responsibilities of front-office coordinator after a colleague was laid off because of declining revenue at the firm, called Express Employment Professionals. That meant responding to in-person visitors (from the UPS delivery person to job applicants), interviewing job candidates, onboarding new employees, sometimes answering phone calls and even cleaning the bathroom.

“I’m a very structured person,” said Rosario, 38, who has worked at the staffing agency for nine years. “It was a feeling of being overwhelmed.”

As the economy cools following a post-pandemic burst of activity, many businesses grappling with high costs and flat or falling sales are pulling back hiring and instead training existing staffers to handle new tasks when coworkers quit or are let go. In many cases, that means staffers are doing two or more jobs, expanding their skill sets and beefing up their resumes. Yet many aren’t necessarily getting a raise, at least in the short term, irking some workers, staffing officials and business owners say.

Do companies still train employees?

A third of hiring managers say budget constraints or the inability to fill an opening are resulting in reduced or stagnant hiring plans, according to a Harris Poll survey for Express Employment Professionals in the spring. To cope with a more limited workforce, 68% of the hiring managers say they plan to teach an employee new skills for their current role or train the person for a new position.

Rosario’s boss, Alyssa Chumbley, said she adopted this practice with her own staffers and sees play out among clients, including steel and other manufacturers, in northwest Indiana.  Americans have shifted their purchases from goods, such as TVs and furniture when they were homebound early in the pandemic, to services, like traveling and dining out, causing factory activity to contract for 20 of the past 21 months, according to the Institute for Supply Management.

Chumbley says her revenue has tumbled 50% the past two years and her staff has shrunk from 14 employees to seven through layoffs or attrition.

“I am now relying on my highly-paid, skilled employees to do some of what wouldn’t necessarily be in the job description that’s outside of their normal scope in order to meet business demand,” said Chumbley, who owns Express franchises in the Indiana cites of Valparaiso and Schererville. She added that view is shared by many of the local manufacturing companies she serves. To make the transition easier, Chumbley said she installed new technology, such as an automated phone system to direct calls to staffers.

How fast are wages increasing?

A few years ago, many Americans with cash from stimulus checks and staying home during the COVID-19 crisis spent with abandon. Companies saw their sales spike and, faced with pandemic-related labor shortages and high turnover, were hiring almost anyone they could find. To attract and keep the workers, private-sector employers increased average wages by 18.1% from January 2021 to September 2024, according to the Bureau of Labor Statistics.

Recently, inflation has eased significantly and the Federal Reserve has started cutting interest rates. Yet labor costs and interest rates remain high after the Fed’s historic rate hikes to fight inflation in 2022 and 2023. Meanwhile, sales are flat or sliding for many businesses because consumers are still coping with high prices and borrowing costs but have depleted their pandemic savings.

In September, the gap between small businesses reporting lower versus higher sales the past three months matched the highest level since 2020, according to the National Federation of Independent Business’ monthly survey.

Companies, in turn, are hiring more selectively and some are laying off workers. U.S. hiring in August reached the lowest level since November 2016, according to the Bureau of Labor Statistics.

Can work overload lead to burnout?

As a result, businesses are doling out more tasks to current workers. Yet some unions in northwest Indiana bristle at the idea of requiring employees to perform tasks that go beyond their job description, Chumbley said. Recently, she said, three computerized machine operators at a plastics factory were laid off after they refused to add more duties to their daily regimens when colleagues left.

Some experts also worry about burnout, which was widespread when many Americans left the labor force in the early days of the pandemic, leaving colleagues with bigger workloads.

“When your work increases beyond the point where you have the resources to succeed and successfully do the work…you do get burnout, fatigue and workers looking for other jobs,” said Mindy Shoss, a professor of industrial and organizational psychology at the University of Central Florida. “It’s a well-being crisis, it’s a public health crisis and it’s an economic crisis.”

Such a scenario harms both workers and their employers, she said.

At the same time, she said, if workers are given the tools to do their jobs, increasing their skills and responsibilities can help them advance in their careers.

‘I just let it happen’

Rosario, Chumbley’s office manager, said she was initially overwhelmed when she assumed the front-office coordinator role a few months ago because she was used to a schedule that included handling payroll early in the week, for example. And responding to unplanned office visitors or job applicants meant breaking those routines on the fly.

But, she realized, “I can move things around” and do payroll later in the week. “I just let it happen.” She noted her salary hasn’t changed, though she expects to eventually get a raise.

She enjoys her new duties, she said, in part because many involve talking to job candidates and others, a change of pace from the paperwork she handles as office manager. Although she typically had some downtime each day, now, “The day flows for me,” she said. “I’m working more efficiently.”

In Manchester, New Hampshire, John Roller, another Express franchisee, said about 20% of the job descriptions he gets from employers are now for “blended” roles that require applicants to handle multiple duties, such as one that involves direct sales, sales management and marketing.

Many manufacturing, call center and other employees are rankled, he said, because the added responsibilities typically don’t come with higher pay. But the companies believe they’ve already boosted wages substantially the past few years and so it’s reasonable to moderately expand job requirements.

That’s the case for Adhere, a digital marketing company for colleges, says CEO Ruben Resendez.

With sales slow this time of year, Adhere, based in San Jose, California, recently decided to lay off three data analysts and transfer their duties to the four marketing and “client success” workers who were benefitting from the analysts’ research.

If sales and profits increase, “That’s when we can talk about compensation,” Resendez said. Yet he said the employees are already benefitting by learning new skills. “It’s great for their careers and great for their resumes,” he said.

One reason Resendez decided to make the change is that all of the company’s 24 employees have switched to working remotely since the pandemic, eliminating commutes and giving them more bandwidth. Some “were twiddling their thumbs,” he said. “They had a little bit too much time on their hands.”

‘I don’t feel burdened’

One company is taking a more sweeping approach to broadening employee responsibilities.

Your Ad here, a law firm for marketing companies, sought for nine months to hire a vice president or chief operating officer to take on management functions so founding partner Alina Lee could focus on business development and strategy.

But Lee said some candidates weren’t “a good cultural fit” while others had salary demands that were too high after the pay run-up of the past few years. After rising sharply for several years following the pandemic, sales have flatlined the past 12 months, she said.

So Lee made a list of dozens of duties the new VP would have handled – including hiring, payroll, marketing and taxes. She asked her 11 employees to rank those in which they were most interested on a scale of 1 to 10 and take a skills test to assess their competence.

Most of the tasks were distributed across the firm’s staff, including six lawyers, on a voluntary basis. Katerina Velanova, a full-time attorney, also deals with the company’s malpractice insurance, onboards new employees, plans the annual retreat and helps track worker productivity.

“I don’t feel burdened by these administrative tasks,” Velanova said. “I picked the tasks I like the most.”

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