How Trump's tariffs are affecting recruiting and retention

Since Trump's tariff announcement last month, employees have been awaiting the fallout on their jobs and economic circumstances. They're right to be concerned, but not in the way they may have assumed. 

In April, President Trump imposed a 10% tariff on all imports into the United States. Certain countries are being subjected to even higher tariffs — 25% for Canada and Mexico and up to 145% for China. These restrictions affect a wide range of goods and services including consumer goods, industrial material, agricultural products and the energy sector. And while their impact on the labor market isn't as straightforward, the workforce is still right to be concerned. 

"Tariffs signal a fear about a potential recession in the future," says Emily Levine, executive vice president at executive search firm Career Group Companies. "People are scared to make risky career changes because they don't know what's going to happen to the economy [and] organizations think they're not in a position to add to head count because they're anticipating what could happen to their business." 

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There are still businesses that are booming and remain fairly untouched by the tariffs. For example, the music industry, real estate, technology and AI companies are seeing little to no impact. In fact, many investment firms are using the market volatility as an opportunity to make money and have the budget to grow their ranks, even if it may seem like they're hesitating — a strategy Levine warns companies against. Too much apprehension and too little action could have an adverse effect on profitable industries. 

"Those organizations are just pausing to see what's going to happen," she says. "But a 'wait and see' approach is hard when you're also trying to court candidates to join your company as it doesn't really inspire much confidence." 

Same skills, new outlook

For those still recruiting, the qualification process has also changed some. Organizations aren't just looking for certain skills; they're looking for specific experiences. For example, employers may want a sourcing manager that is familiar with the process of switching facilities from China to Vietnam to evade the high tariffs. Similarly, organizations may also be more interested in hiring talent that  have good relationships with U.S.-based companies. 

It's impossible for employers to predict whether these hiring trends will go beyond the current administration, but instead of letting it slow or stunt recruiting efforts, Levine urges organizations to be as flexible as possible with their hiring practices and strongly consider freelance opportunities.  

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"If there's a business need that you want to fill without biting off more than you can chew you don't have to go the full-time route," she says. "Dip into a pool of candidates that aren't working right now and may just need a temporary job." 

Through a more temporary arrangement companies will still save a portion of their budget by not having to spend as much on benefit or payroll taxes, which could prevent them from having to lay off any of their workforce in hard times. Still, a healthy dose of caution is still important, especially for candidates who have the most to lose. 

"Take the time to think about the industry that you're going to be transitioning into and how it could be impacted by tariffs until we have more of an idea of what's going on," Levine says. "Try to first dig deep and try to get to the root of what's prompting you to look elsewhere in the first place."