It was March, 23rd, 2021. A huge container ship named Evergreen blocked the Suez Canal, which is a critical waterway for global trade. During the following 6 days, nearly 400 ships queued to pass through the canal. This blockage prevented an estimated $9.6 Billion worth of trade. Evergreen not only proved to us how fragile is global trade but also how human beings are consuming. Today the average cost of shipping a standard large container (like the ones we saw atop of Evergreen) is more than $10,000. If you want to send such a box from Shanghai to New York, you have to pay $15,000, which is almost six-fold the price you would have paid in 2019.
The cause of soaring shipping freight is rampant demand for goods. High levels of demand created bottlenecks in supply chains, which combined with increasing energy prices and resulted in high levels of inflation. The major economies in the world, for whom high inflation is startling, are looking for ways to control inflation. In this inflationary environment, not only prices but also wages are increasing.
Besides those pandemic-induced macroeconomic conditions, the global war for talent deepens the problems in compensations and benefits. The rise of remote working demolished all the barriers for critical talents. Now a software developer could work for any company from anywhere in the world. However, remote working is only a part of the story. As online anything (groceries, food delivery, etc.) continues to grow, demand for computer geeks is skyrocketing. According to a survey, the jobs that will witness the highest pay increase in the following 18 months are the following:
- Artificial Intelligence
- Big Data
- Digital Marketing
- Web and Mobile Applications
- Project Management
For an HR professional, global macroeconomic stories like the ones above might seem irrelevant. However, let’s go back to the previous blog post and remember the ‘Learn or Earn’ issue. As we come close to the end of the year, it is time for budgeting, which is the most critical time of the year for HR professionals to prove their strategic contribution to the company.
Be aware of global macroeconomics, follow global trends, utilize your competency for attracting and engaging talent and employ your analytics skills. The result is a strategic wage budget that will reserve you a seat at the table.