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When Jobs are scarce, how should Leaders and Governments react?

In today’s uncertain economic landscape, it can be sometimes hard to see the positive side of things? A quick glance at the economy reveals sluggish growth, scarce business opportunities, and soaring costs that make everything feel out of reach. The job market, growing ever more competitive, has left millions—not just blue-collar workers—either unemployed or clinging to fragile job security. Artificial intelligence, some argue, has only worsened an already challenging situation, intensifying the strain felt in people’s everyday lives.
Traditional solutions, like waiting for the market to self-correct or depending entirely on personal grit, aren’t cutting it anymore—or at least, they’re not working fast enough. Now, more than ever, corporate leaders and governments must unite, taking bold and compassionate steps to tackle these mounting crises. By learning from the COVID-19 pandemic and embracing fresh, creative strategies, we believe the actionable measures outlined below could help mend the job market’s dysfunction and provide vital support to those most vulnerable.

1. Temporary executive pay cuts

In the wake of the COVID-19 pandemic, we witnessed remarkable examples of corporate leadership when executives voluntarily reduced their compensation to shield their organizations and workforce from financial distress. Toyota's CEO Akio Toyoda and his executive team took significant pay cuts to weather economic uncertainty, demonstrating solidarity during crisis. Delta Airlines' Ed Bastian forwent his entire salary for six months, while leaders at AMC Theaters and REI made similar sacrifices, with REI's Eric Artz taking a 100% reduction for half a year. Guess' CEO Carlos Alberini accepted a substantial 70% pay cut. These actions transcended mere cost-cutting—they represented powerful statements of unity that boosted employee morale and preserved jobs.

Today's economic landscape in many parts of the world present fresh challenges that may warrant similar leadership approaches. In some countries, there is persistent inflation, rising interest rates, and unstable energy markets. The UK for example, continues to navigate post-Brexit trade complications and supply chain disruptions, while the US contends with technological sector volatility, shifting labor dynamics and a negative economic outlook. Small businesses particularly in such countries may struggle with increased operational costs and reduced consumer spending.

Meanwhile, recent graduates face their own mounting pressures. They face huge obstacles during recruitment, and when they succeed in landing a job, they enter the workforce saddled with unprecedented student debt, confronting stagnant entry-level wages that haven't kept pace with inflation or housing costs. Many are forced to accept positions below their qualification level or have to work multiple jobs to meet basic needs.

Western leaders—both in government and business—would be wise to revisit the pandemic-era leadership playbook. And take a careful look on what lessons are applicable today.

By voluntarily moderating their compensation, CEOs and other senior officials could redirect funds toward retaining employees, enhancing benefits, or investing in workforce development programs. Beyond the financial impact, such gestures would send a powerful message of solidarity with their workers. At a time when public trust in leadership continues to erode, this symbolic action can help rebuild confidence and foster greater resilience in the workplace.

2. Normalisation of Fractional Roles

In today's employment landscape where full-time positions have become increasingly rare, job-sharing should be a practical solution. Rather than leaving qualified professionals unemployed, companies can implement fractional employment—dividing single positions among multiple workers who share both working hours and compensation.

Consider a senior product manager role typically offering £45,000 annually. Instead of hiring one full-time employee, a company could engage two professionals at £25,000 each, with each working 3.5 days weekly on overlapping schedules to maintain operational continuity.

This arrangement may offer multiple advantages such as:

  • Financial Prudence: Organisations can maintain essential functions without full salary commitments, preserving financial resources during economic uncertainty, while benefiting from more than one person to increase productivity.
  • Skill Preservation: The benefit of fractional roles being widely adopted is that they can enable employees to remain in the workforce, keeping their professional capabilities current and avoiding gaps in the CVs.
  • Enhanced Innovation: Two part-time professionals contribute diverse experiences and perspectives, potentially leading to more creative solutions and approaches, and greater effects than the individual contributions.
  • Work-Life Integration: Employees gain more personal time, potentially increasing their productivity and satisfaction when working.
Fractional roles offer employers a powerful way to tap into skilled talent of more than just one person. For professionals navigating a tough job market, these positions provide a meaningful engagement, keeping their expertise sharp while they take on a new challenge, as well as a small income. By leveraging fractional workers, companies can gain flexible, high-value contributions—accessing specialised skills on-demand from multiple individuals, while ensuring they preserve resources. Government support, such as tax incentives or subsidies, could further boost this model, making it a win-win for businesses and workers alike across industries.
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"This model could extend beyond office space to shared staffing, equipment, or joint projects. Governments and trade associations could facilitate these partnerships by creating matchmaking platforms or offering grants to offset initial costs. Such collaborations can not only preserve jobs but can also foster a spirit of mutual aid that stimulates growth in Towns and cities."

3. Unusual Allies: Cross-Industry Collaborations

The job market crisis calls for breaking down silos and fostering collaborations between companies that wouldn’t typically be “bedfellows.” Imagine an accountancy practice with excess office space renting it out at favorable rates to a two-person bid-writing firm as well as a sole legal practitioner. This arrangement isn’t just about shared resources—it’s about creating synergies that benefit all parties.
Consider the potential upsides of this working relationship:
  • New Business: The accountant gains two new clients—the bid writers and the lawyer—who may need financial services.
  • Reciprocal Support: The bid writers could craft one discounted bid application per month to the accountant and the sole practitioner, boosting the firm’s growth. Meanwhile, the lawyer could draft legal documents for both at reduced rates.
  • Cost Savings: The bid writers and lawyer save significantly on rent, allowing them to sustain their businesses despite economic headwinds. The accountant gets an extra £800 - £1,000 a month towards the rental or mortgage of their building.
This model could extend beyond office space to shared staffing, equipment, or joint projects. Governments and trade associations could facilitate these partnerships by creating matchmaking platforms or offering grants to offset initial costs. Such collaborations can not only preserve jobs but can also foster a spirit of mutual aid that stimulates growth in Towns and cities.

4. Government Stimulus: A Safety Net with Purpose

Finally, governments would be advised to step up with targeted economic stimulus measures to bolster the job market. While emergency relief like furlough schemes dominated the COVID-19 response, today’s crisis demands a mix of short-term aid and long-term investment. This could include:
  • Subsidies for Job Creation: Grants or tax breaks for companies that hire fractional workers or collaborate with others to preserve roles.
  • Retraining Programs: More visible funding for up-skilling initiatives in high-demand sectors like green energy, AI or tech roles, ensuring workers remain competitive.
  • Infrastructure Projects: Public works that create immediate jobs while addressing societal needs, from transportation upgrades to affordable housing.
These measures require political will and fiscal commitment, but the payoff—economic stability and renewed public trust—will outweighs the cost by far. Governments should coordinate regionally, perhaps through forums like the G7 or EU, to amplify their impact and share best practices.

In conclusion, this challenging period in the job market demands that businesses come together in more creative ways and put through strategies that will benefit the greater good in the long run. Whether leaders temporarily reduce their compensation, exploring flexible work arrangements, building partnerships across different sectors, and supporting meaningful economic stimulus, they demonstrate care for everyone and blend the lessons learned during the pandemic with fresh thinking that addresses the current situation.

For more information or to discuss anything in this article, contact us via our contact page or by sending an email to info@sanrixa.co.uk.