President & CEO
Harvey Nash USAPAC
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Your Hiring Strategy Is More Important to Federal Reserve Chair Janet Yellen Than You Might Think
As the President and CEO of Harvey Nash USA, I spend a lot of time talking to clients as they are planning their quarterly and annual hiring strategies. The decision to grow headcount often requires business leaders to take the wider economic climate into consideration. In recent years, both in the U.S. and overseas, a lot of businesses have been taking advantage of low interest rates to expand.
Another group of people who are interested in your hiring plans are the policymakers at The Federal Reserve Bank, led by Chair Janet Yellen since February 2014. The 'Fed' is tasked with three key objectives for monetary policy as they relate to the U.S. economy: maximizing employment, stabilizing prices and moderating long-term interest rates.
At the start of 2016, many CEOs anticipated the Fed would continue to increase interest rates after an initial rise in December 2015. Senior executives had built this into their plans for the year, weighing the higher cost of borrowing capital to expand with the continuing need to hire top talent in a market of near full employment.
However, increasing turbulence in the global economy and more volatility overseas spooked investors in the stock markets during January and February, providing Yellen and her colleagues at the Fed with pause after their initial quarter percent rate hike. As a result, they have kept rates unchanged at 0.5% in their March meetings.
What does this have to do with me and my immediate hiring plans I hear you ask?
In my opinion, business leaders who are currently waiting for the Fed to make their next move before planning future hiring are missing an opportunity. The Fed has already accepted the value of a robust technology staffing industry to the U.S. economy. Yellen has recently been quoted saying her decision making on future rates will be based less on the domestic employment of high skilled labour and more on wider global economic changes, such as fluctuating oil prices and China's intervention in their sluggish economy.
Therefore, if you delay hiring decisions, worrying about what the Fed might or might not do, your competitors may well be continuing to invest in technology innovation and staffing growth before the expected two future interest rate hikes increase the cost of borrowing later in 2016 or 2017.
Your technology hiring is important to Janet Yellen and her colleagues at the Federal Reserve because they want to maintain a growing economy with high employment. While we must consider the cost of interest rates in our planning for 2016 and 2017, the most optimistic CEOs I talk to recognize the importance of growing while conditions remain positive.
And remember, while Janet Yellen has to consider the entire global economy in her calculations, it's more important for you to make the right staffing decisions for the success of your business, your clients, your shareholders and your employees.