bschrenzel posted on January 09, 2009 15:20
To make staffing plans for 2009, it’s important to first understand the current economy so we can react to it appropriately. From a hiring perspective, how can we define the current economy? That's a very interesting question, and not quite as simple as you might think. Certainly, it's a "tight" economy, but it's not "universally tight" as it has been in most other economic downturns. The dot-com bust of 2000-2001 was a prime example of a "universally tight" economy. The economic effect of the dot-com bust was not limited to certain industries, rather it was felt across all industries. What we are experiencing now, however, doesn't seem to be a universally tight economy.
While the impact of the current economic crisis on business is intense, it’s not universal. The dot-com bust was all about companies going out of business because they lacked the fundamental ability to be in business: profitable revenue generation. , The fabled future of “new economy” turned out to be the emperor’s new clothes, revenue and cash was just as important as it always was. As these companies failed, the domino effect set in, and everyone was affected.
This downturn is different. It’s not based on a lacking of fundamental business principals, but rather on a shrinking of capital in the financial services industries and a diminishment in home equity, as well as weakness in selected industries that are affected by the flattening of the world labor force and energy costs.
This leaves certain segments of the economy, and certain companies, less affected, and others more affected. Interestingly, the general tightening of the economy actually presents opportunities for certain segments that are viewed as providing overall operational efficiencies and cost savings, in an even stronger position (e.g. technology). Still other industries remain mostly unaffected (e.g. medical).