The US economy will soon enter a recession that will last throughout 2024. While business activity typically slows for a few and declines for others during an economic downturn, there are plenty of smart and strategic business decisions you can make now that will pay dividends once economic growth returns. We have highlighted a few of the best business strategies you can apply this coming year to set your business up for success following the 2024 recession.
Tight Labor Market - When is the Best Time to Hire?
Many businesses have struggled to navigate the tight labor market. As ITR Economist Taylor St. Germain mentioned in a recent episode of TrendsTalk, there is an ongoing labor shortage. For every one job opening in the US, there is less than one person (0.692 people, to be exact) available to fill that role.
Despite these hiring challenges, 2024 could be an optimal time to hire new talent for your team. While labor prices are not going to be decreasing, even in the mild recession we are projecting, there will be some reduction in the workforce and therefore a greater number of people looking for work. Since many of them will already be employed by 2025 and 2026, your company’s best chance to find new employees or poach from a competitor will be in 2024.
Hiring new employees while the economy is in recession will help your business in the long run, as your team will be fully trained and prepared for the increased business activity that will accompany economic growth starting in 2025.
Take Advantage of the Lull in Interest Rates in 2024
High interest rates have impacted various businesses. During recessions, the Federal Reserve Board tends to cut interest rates. While the Fed will not bring interest rates back down to where they were in 2020 or 2016, there will still be a relative lull in 2024.
With this upcoming lull, 2024 could be an optimal time to invest in your company. This is especially true given our expectation for interest rates to climb uncomfortably high in the second half of the 2020s in advance of the 2030s Great Depression.
For example, if wages for your company are going up by 5% each year and you have the chance to borrow at a somewhat reasonable interest rate and invest in IT or new machinery that will cut your labor needs by 10%, your business will be in a great spot.
Re-evaluate Your Markets for the Remainder of the Decade
Even though preparations made in 2024 can help your business come out ahead during the economic growth in 2025, do not forget to look beyond 2025, especially as we approach the 2030s.
With business potentially slowing during the upcoming recession, the downtime may afford you and your team the opportunity to re-evaluate the markets you are selling into. There may be less time in 2025 and 2026 for this kind of strategic planning.
Do you know which markets your business should be in over the next few years? 2024 will be an opportune time to determine whether you may need to transition to more depression-resistant markets. Such drastic changes can be daunting, and it may sound like too much of a risk to take, but that is where valuable tools such as the Trends Report™ come in.
The Trends Report gives business leaders the confidence they need to make the best business decisions for success going forward. With the Trends Report, you have access to accurate three-year forecasts for dozens of markets! This kind of foresight is essential for ensuring you are targeting the correct markets as we get closer to the next depression.
With ITR Economics in your corner, you will not only be able to make the most of the upcoming 2024 recession, but you will also be able to position your business for success throughout the rest of the decade. For more information on how we can help your company plan most effectively for the future, be sure to contact us today!