How can employees get ahead of the impact of interest rates on employment?
To address this, we must first explore the connection between the two.
Interest rates play a crucial role in employment as they are both lag indicators. Interest rates don’t increase in anticipation of inflation, but rather they rise because inflation exists.
Employment trends don’t respond immediately to interest rate changes. When rates are high for a long period, employment is negatively impacted.
In our practice, we almost have the ability to see into the future. If we’re getting more calls about terminations and rates have yet to fall, that may be an indicator that rates need to come down.
What we’re seeing in Ontario and the rest of Canada is a disconnect between government policy, the indicators monitored by the Bank of Canada, and the real impact on wages and employment.
When interest rates remain high for an extended period of time and eventually start to fall, it’s often too late to prevent significant job losses. Some layoffs are to be expected as interest rates fall, but extended periods of high rates can contribute to the problem.
This is a great opportunity for employees who may be worried about job security to take proactive steps to protect themselves, such as:
🔹 Review employment contracts
🔹 Understanding what your negotiated exit might look like
🔹 Understanding your rights and entitlements
🔹 Brushing up on your resume
🔹 Connecting with friendly contacts
What it really comes down to is that those who stay one step ahead during volatile economic times won’t just land squarely on their two feet if they do experience job loss, they have the best chance at success.
Contact us for help navigating these challenging financial times.