With the tariffs implemented on 6 July 2018, how will the jobs market look like as the consequences of American protectionism policies spill over into local markets, dampening initial growth projections?
What we know
An estimated loss of up to 134,000 American jobs – mainly in agriculture and service sectors, would be at risk as reported by The Heritage.
Brace yourself for disruptions in supply chains for companies and price hikes worldwide as consequences of the tariffs implemented. This is especially so for businesses who are unable to re-evaluate their manufacturing and logistic plans and likely to pass the cost on to their customers.
The negative job outlook is attributed to delayed consumption coupled with stagnant wage growth in the slow economic environment. Industries in service sectors that will feel the pinch from the tariffs include financial, energy and technology companies.
The Impact on Tech Companies
Analysts have yet to suggest major concerns that have severe implications for job security in either country’s lucrative tech industry. When regulatory restrictions kick in, we anticipate American tech companies experiencing increased difficulty conducting business in China and by an act of reciprocity, a halt in Chinese investments in US hi-tech firms.
Could it be that eventually, lower profit margins will set the tone for stagnant wages in the Software and Hardware Industries? This news may not be what employees in these sectors want to hear, having held the top 3 and 4 median annual bonus earners spots across the board according to a 2017 LinkedIn Job survey.
Will my wages stagnate this year?
For those employed at a business that isn’t heavily reliant on the US or China as immediate good producers, you will be unscathed from these taxes.
Others facing direct impact might want to explore opportunities in businesses with diversified sources for components and manufacturing as there is uncertainty in the long-term when these tariffs would be lifted. Look into companies with alternative facilities in countries like Indonesia, Malaysia, South Korea and Vietnam, where an upturn in trading opportunities is expected.
What can employers do to avoid losing talent to higher salary offers?
1) Communicating and managing staff expectations
If you aren’t already doing this, it’s always recommended to have on-going communication regarding your company’s performance frequently. This not only helps employees focus and be on track with overarching objectives, it also helps them to stay in touch with the realities of your company’s situation. When growth falls flat on your trajectory, employees would be aware of what their bonus cheques might look like at come year-end and would not develop any dissonance.
2) Being truthful
To complement consistent communication, it pays to not shy from money as a topic. Honesty goes a long way in building trust. If leadership is unable to be transparent about the company’s performance, you might set your employees up for disappointment and plant the feelings of doubt and distrust in the long-run.