No matter which side of the political spectrum you sit on, it’s fairly safe to say that there likely has not ever been such a politically-charged climate in America. While it’s our duty as human resource professionals to keep as much conflict out of the office as possible, decisions being made by the government right now are having an undeniable impact on our employees, and thus, on us and how we approach these sensitive situations. Here’s a quick look at the top three ways the trade wars are, or will be, impacting you.
1) Dollars Won’t Go as Far
The new tariffs impact a select grouping of items coming into the country, meaning other countries pay more to ship things to the US. This allows US suppliers to raise their prices and still remain competitive. Meanwhile, other countries have instituted retaliatory tariffs, meaning the US now pays more to ship certain items out. Literally every industry is impacted, from farming through automotive. While we don’t yet know how much prices will increase across the board, we do know they will. That means businesses will have to find ways to make their dollars go further, and there will be difficult decisions to be made. Furthermore, consumers will be impacted by the increases, meaning paychecks will buy less.
2) There Will Be Job Chaos
Steel imports are facing a 25% tariff, while aluminum sits at 10%. Many think this is a good thing that will bring more steel and aluminum jobs to the US, and they would be partially correct. We will likely have more jobs in those areas, but “sixteen jobs would be lost for every steel/aluminum job gained,” per research presented by Forbes Magazine, resulting in a net job loss in every state. “One reason for this result is that nearly 40 times more people in America work in jobs that use steel and aluminum than in jobs connected to producing steel and aluminum.” Depending on your industry, you may find yourself hiring or laying off employees. This shift is expected to hit “workers in production and low-skill jobs” the hardest.
3) 401(k)s Will Take a Hit
“If the economy's growth takes a hit, it means fewer profits for companies that sell goods, including smartphones, strawberries and electric cars,” explains Adam Shell of USA Today, and that can cause stock prices to plummet due to worries over losses. “Those fears, for example, are a big reason why the Dow Jones industrial average fell as much as 420 points Tuesday, or 1.7 percent. The Dow's gains for the year have been wiped out.” Without a doubt, this will be of grave concern for employees nearing retirement age, who may try to preempt it by pulling out now or be forced to work more years to while their retirement plans recover. It will also impact morale across the board.
Be Prepared with Robust HR Policies
Sadly, if an economic change is coming due to the new tariffs, we can’t prevent it. However, we can help keep morale up and prepare for it by enacting new programs and policies related to non-monetary compensation, expenses, retirement planning, hiring, and more. Whether you need to outsource your HR needs or require help shoring things up, the HR Source is here to support you. Book your free consultation today.