Fannie Mae & Freddie Mac bring mortgages back to the spotlight.
Mortgage finance firms Fannie Mae and Freddie Mac, which collectively hold or back nearly half of the country’s mortgage debt, made headlines this month when their share prices nearly halved due to concern over access to capital. This most recent development in the growing mortgage crisis has brought the credit intermediation and loan industry back to the forefront with no immediate end in sight.
Impact on the workforce
Continued risk of job losses in credit intermediation.
The main source of turmoil in financial services employment has been credit intermediation, with this portion of the industry losing 5,700 jobs in June alone. Nearly everyone in the industry has been impacted – mortgage brokers, loan processes, underwriters – creating a challenging environment for workers in this sector. These skilled workers can successfully find new job opportunities if they focus on reallocating their transferable skills.
Impact on employers
Think about relocation offerings.
Relocating for a job may not be as easy right now as it was in previous years. Employers need to be creative in how they entice individuals to relocate as it is tougher to sell homes and get credit for new real estate, so job seekers will more likely stay close to avoid these dynamics. Employers should keep this in mind and improve their local recruiting strategies as a result.
Consumer spending experiences a comeback.
The most recent U.S. consumer spending data indicated that, in May, Americans got back out shopping, reporting the highest level of spending since November 2007. This welcomed change is a possible result of tax rebate checks being distributed by the government, but will this spending trend continue in the right direction?
Impact on the workforce
Focus on the allocation of your compensation package.
As the economy goes through this phase of slower growth, workers need to look at their compensation to best determine not only whether or not they’re being paid competitively, given the environment, but also if they’re allocating their funds, including tax rebates, appropriately to meet their needs. Are you putting enough/too much in your 401(k)? Do you have the right investments in your retirement plan? Do you or your spouse have the best benefits package? Which one should you use?
Impact on employers
Keep assessing what you offer.
In order to retain staff, employers need to keep a close eye on the economy to ensure what they’re offering their staff in terms of total compensation is fair, competitive and in line with the rising cost of living given the recent gas and food price increases.
State employees embrace 4-day work week.
To help ease the pain of rising gas prices impacting commuting expenses, Utah plans to launch a 4-day work week for state employees effective August 1. While other states and private sector employers take notice, will this shortened work week catch on?
Impact on the workforce
Think about your commute.
As you evaluate your career options, the cost of commuting needs to be a key consideration to ensure you’re not cutting too far into your budget in gas or transportation spending. When looking at job opportunities, be sure to examine what sort of flexible work arrangement and/or transportation benefits are offered.
Impact on employers
Helping to minimize commute expenses.
Many employers have been coming up with creative ways to quickly and effectively respond to the rising cost of commuting as a key retention and recruiting strategy. We’ve recently helped employers set up programs including car pooling initiatives, providing gas cards as part of compensation, setting up buses from hub locations to shuttle workers to offices where driving is a must, as well as implementing flexible work schedules so employees can work from home as appropriate.
