This Week, In Recruiting - Issue 190

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Open Kitchen: Trump 2.0. Impact on Talent Acquisition & HR (Part One)

Donald Trump as President-elect of United States will obviously have significant consequences for our industry. I sketched a few of these out briefly in a LinkedIn post last week, which went viral (80,000 impressions) - I think in most part because people needed an opportunity to displace the shock from the result. We also covered some of the expect contours of change with a great panel of US friends on Brainfood Live last Friday, which is now available on replay here. Today, I will use Open Kitchen to expand upon those collected views on what Trump 2.0 Presidency is going to mean for Talent Acquisition and HR. There's a lot to unpack, so this is going to be a two parter.

Here's Part One - Public Sector, Energy, DEIB, Hostile De-globalisation, Industrial Policy and Immigration.

Firstly, we need to acknowledge that the scale of the Trump victory. Not only did he win the electoral college, but also the popular vote, the first time for a Republican President since 2004. The Republican party already has control of the upper house (Senate) and is close to also winning control over the lower house (House of Representatives). With the Supreme Court of Justice is already dominated by Republican Presidential appointees, this means that Donald Trump maybe be the most powerful President since Nixon or maybe even Roosevelt. He now has both the mandate and very likely the power to push through his agenda.

So, let's have a look at the agenda...

Confession: I got this 20 bullet point list from X, so please consider the quality of the citation. However, from Trump's public statements, written campaign promises (on Twitter usually), as well as those from prominent allies, suggest that most of this is pretty much what Trump plans to do.

The question I want to explore in this post is how do we expect these to impact Talent Acquisition and HR? That is the topic of today's Open Kitchen.

1. Public Sector

The US Government is the single largest employer in the United States. Up to 25 million people work for the government - a number which grew during the past four years as almost all of the full-time job growth in the Biden administration came from the growth of public sector employment. Donald Trump - and perhaps more importantly - his private sector tech bro allies - sees this employment as primarily as waste. Elon Musk, the most prominent of those bros, famously arrived at Twitter bearing a kitchen sink before going on to fire up 80% of the workforce, and in so doing playing no small role in inspiring other CEO's to think that they, too can do more with less. Musk has been tabbed in some sort of new role as 'Minister of Government Efficiency', so we can expect some egregious downsizing should this occur. Even if Musk does not end up taking an official role with the Trump 2.0 administration, you can be sure that he has the ear of the President-elect, so whatever the case, we can expect dramatic cuts to the public sector workforce. Perhaps using the following techniques:

• Hiring freeze on federal government appointments

• Federal budget cuts to the State departments

• Strict RTO mandates to 'flush out the libs'

• Worker reclassification to facilitate more efficient dismissals

• Abolition of entire departments and agencies, including huge organisations like the Department of Education

• Dispersal of Federal departments from Washington D.C to other parts of the country, triggering voluntary churn, followed by lower levels of rehire.

Whilst we can expect legal challenges to some of these techniques, we need to remember that the President-elect himself is a convicted criminal and has a long track record of operating above, under and beyond the law, so unfair dismissal claims are unlikely to be a significant deterrent. There will be a huge amount of litigation though, so at least one sector of the economy - employment lawyers - are likely to be great shape. But public sector employment is sure going to go down. Naturally this is bad news for any Talent Acquisition professionals working for Federal Agencies, who might expect to be pretty much in the first wave of the redundancies to come in 2025.

2. Energy

Trump 1.0 famously left the Paris agreement in 2016 and is hilariously almost certain to do so again - an unprecedented double rejection of what was a milestone global achievement. The mercurial nature of the US commitment to signed treaties will undermine what's left of the International Rules Based Order or perhaps reveal it for what it always was - codification of national interest, at least insofar as its seen by whoever happens to be sitting in the White House. As for climate change itself, it is unclear whether Trump has any strong beliefs on it. We can be sure he is reflexively pro-Oil and Gas and certainly culturally distant from those who most concerned by about the environment. Having said this, the US has long been a major producer of fossil fuels and actually became the world's leading fossil fuel producer during the Biden Presidency, when the elimination of the Russian gas supply to Europe via the Nordstream incident led to the lucrative addition of Europe as customers for US LNG.

All this is to say that the incoming pro-oil Trump administration may not have much impact on the expansion of oil & gas production, as it is already at record highs. And more overcapacity will simply lead to lower prices - probably not what the oil and gas companies want.

More significant than pro-Oil is Trump's 'anti-pro Green' position. Trump wants to remove the KPI's and commitments for emissions, EV's and the like. This will no doubt give breathing room for incumbent US automotive manufacturers, who have struggled mightily to build commercially viable EV's, but it will also slow down the innovation rate of these companies as they fully return to the incumbent’s dilemma. This will cede even greater US market share to Musk's Tesla, and in the global markets, to a whole range of Chinese competitors like BYD, XPeng, Xiaomi and the rest. Short term gain for legacy auto then, mid to long term gain for Tesla and China EV.

The latter is most significant for employment. Oil and Gas surprisingly does not employ a large percentage of workers and the temptation not to invest in green tech / renewables will reduce the speed at which the green tech sector grows. There are 25 million people directly employed in the Green Energy sector. China - for whom energy transition is a settled matter 20 years ago - already employs 50% of those workers. Trump's anti-green reflexivity is unlikely to change this ratio, unless Elon Musk - himself an obvious green tech advocate - can do something about it. It is in the interests of the United States to rollout national charging infrastructure, secure the entire battery tech supply chain, build up the workforce of skilled engineers to build, install, repair and maintain new energy infrastructure. If Trump can suppress his fossil fuel instincts and someone can sell him on a MAGA version of green tech future, the way may yet be forward for an increase in recruitment work in the US green tech sector.

3. DEIB

Obviously, this is bad news for the DEI industry. The consultancies and professionals which emerged as a mini sector in the late 2010's, coaching employers on building inclusive hiring and engagement practices, peaked at the Build Back Better period in the immediate aftermath of the end of the lockdown period. However, the sector had already been in recession since that time, as the end of ZIRP forced companies to focus on profit and operational efficiency and what-do-you-know, DEIB functions were amongst the first to be depriotised. Trump 2.0 will accelerate this decline, and expected legislative changes may be a knockout blow to DEIB as a discreet industry, at least in the United States.

Trump's victory is also a huge blow to morale for almost every underrepresented community in the corporate workforce. Now I know not every black person, or woman or transgender person voted against Donald Trump - he did in fact have unexpectedly strong support from many in these groups - but we can say that amongst the college educated, professional services, knowledge worker class - Trump's return is a deeply undesirable and even traumatic outcome. This includes many people in the People function of course - we voted or would have voted - overwhelmingly for the alternative.

What is the impact on Talent Acquisition and HR?

I would imagine most companies will continue pretty much as before, though the most progressive of these may look to pull back on more radical diversity hiring ambitions, with an eye on keeping in compliance of what may become changes in the legal environment. Quotas for race and gender will be no longer be on the table. This may be quietly welcomed by company CEO's, who see a simplification of hiring practices and therefore a route toward greater operational efficiency. The impact of the pullback from diversity hiring will be felt in workforce diversity. The US has actually a recent direct analogy with the shift to merit-based college applications vs those that had previously included diversity weighting - leading to the dramatic shift in the ethnic composition of the incoming cohort. Simply put, Trump 2.0 will be bad for Black representation, and probably bad for Female representation.

As an aside, I believe Trump 2.0 will lead to a split in the Atlantic alliance on the issue of DEIB. The diversity conversation in the UK / EU is a more settled matter than the US and we seem to be on track to continue a progressive course on workforce diversification. The cultural context in every country is different and one of the most notable things I've noticed in my travels is that DEIB in one place always looks different in some way to another. In the UK, there is consensus that absolute standardisation is not the way to handle protected groups, and the continuation of hiring and engagement practices to support these groups can be expected to evolve and continue. That is at least until and unless, the Trump wannabes in the UK / European political fringes manage to replicate

4. Hostile De-globalisation

Replacing income tax with universal tariffs on imports is the most interesting idea on the Trump policy platform. If enacted, it will be the most radical economic intervention since Nixon unilaterally off the US off the gold standard, triggering economic chaos worldwide in 1970's, opening the way for neoliberal financialisaton of the US economy.

It is not an idea without merit, but I suspect Trump grossly underestimates how deeply globalised the supply chain for manufacturing really is. A great many goods that are imported are not finished items but parts of more complex machinery which may be assembled in one place before being sent to other for further integration with other parts. A blanket tariff across any import presumably must include everything from the nuts and bolts, electronic motherboards, copper wiring, transistors, transformers, moderators and the everything else - all of which will increase the input costs to US companies making the final item or a part of the final item. The reduction in profits for US companies will slow down US innovation rate and make US exports even more expensive than they already are, meaning further loss on global market share. Look at a company like John Deare (using here purely as an illustration) - one of the leading manufacturers of industrial vehicles. They dominate the US market, but also make a great deal of their profit by exporting overseas. Tariffs applied to imported materials that go into the manufacture of this vehicles will increase cost to production, reduce competitiveness, reduce global market share, reduce investment into R&D, which will further reduce global competitiveness. Far from bringing back manufacturing, tariffs may mean accelerating the doom loop for many US companies which depend on global total addressable market.

We have some recent examples of how tariffs work / don't work - Trump 1.0.

Let’s not forget that it was Trump who started the trade war against China in 2016. Tariffs then did not lead to increase in funds to the US treasury, but rather a depletion of the funds for the US consumer as the cost of tariffs were passed on by the importer for the consumer to bear. Interestingly, tariffs may also have been a factor in the cost-of-living crisis we are still undergoing as sellers use the opportunity of changed external constraints to market test the new (higher) pricing; ambiguity into how much things should cost has been injected into the process. The result is always higher prices.

Interestingly, that 'tariffs won't work' is not the same as 'Trump won't benefit'. We are in the strange situation where economically harming your constituents can be translated into political gain, if convincing enough scapegoats can be found to blame. The major folly in Biden's administration was the continuation Trump's trade war, extending the immiseration of the people who correctly felt poorer and economically more insecure than they did under Trump 1.0. No incumbent government has survived an election in these circumstances - the only ones which have have found a way to reduce cost of living, not increase it.

IMF projections on Global Growth pre-Trump were anaemic at best; a global tariff war will lead to a revision downward and it is not unreasonable that there is chance of the world tipping into a global recession. As economies shrink rather than expand, there will obviously be less jobs, less hiring, less recruiters.

5. Industrial Policy

But what about bringing back manufacturing? Isn't this the real reason for tariffs - to end globalisation, end offshoring, to build and buy American? Manufacturing may return to the America but the manufacturing jobs won't. Jobs are not commodities - they do in fact get automated away. Manufacturing share of global employment has been going down over the past decade, even as manufacturing capacity globally has increased. Automation, production innovation, material science breakthrough and most all, manufacturing at scale, has progressively reduced the ratio of human labour required to make physical things.

Two charts from Richard Baldwin demonstrate this well. China is the world's factory, but did you that that whilst its share of global manufacturing output keeps increasing, the number of Chinese people employed in manufacturing jobs has continued to progressively decline? This maps to the increasing automation of production - something which Trump's new BFF Elon Musk knows only too well but has somehow neglected to tell him.

Xiaomi - currently more well known as a mobile phone manufacturer - started a car company three years ago. It makes one car every 76 seconds, selling hundred thousand in the first 3 months of availability. The cars are cheap because the most expensive component in manufacturing - employee payroll - is a decreasing component of it.

Incidentally, this is also a problem for the Rest of the World. Manufacturing jobs won't be coming back to US, but they also won't be starting much elsewhere either. As an engine of job growth, we have already past the era initiated by Ford who started the modern factory era in Detroit 80 years ago.

The Biden administration did not help in blast through false perceptions. Indeed, Biden's massive commitments to industrial policy had to demonstrate some sort of return in the form of new jobs, but the reports that 'manufacturing was back' instead displayed 'amount investment budget allocated' rather than 'actual things being made' by 'actual humans being employed'.

The hard reality is, once a country loses an industry, it never gets it back, at least not in the same form. The supply is provided by somebody else and the switching costs back for the buyer is too much for them to ever switch back again. The existing workforce of a lost industry retrains in other sectors, leaves for other countries, or just drops out of employment altogether. That the latter of these three has been the most likely outcome is a historical tragedy of the neoliberal era and a calamitous failure of government responsibility to the people.

The loss of industrial knowledge which accompanies the loss of industry is an entirely unaccounted for loss to the country. A great deal of manufacturing know-how is based on the human learning on-the-job, the essential nuances of which might not always be documented. The workers may not even be consciously aware of them, but subliminally know how via watching and doing actions thousands of times over. Most of us know how to walk but none of us know how we walk. We all speak our native languages fluently, but we do not know how the grammar works. Our knowledge of these things is implicit, informal not explicit, formal. The failure of TSMC to produce silicon chips in Arizona wasn't for lack of explicit know how - they surely had the blueprints, the fine details, the manuals and training. But they didn't have the people with the implicit knowledge. Production only began to reach accepted standards after the directly importing thousands of workers from Taipei to Arizona. Now those are indeed manufacturing jobs, but they are performed by foreign workers, on American soil.

6. Immigration

Speaking of foreign workers, it seems that time is going to up for a great many of them in the United States. Immigration was the No1 issue for US voters in 2024, and having arrived on an anti-immigration platform, it is inconceivable that Trump will not make true on his promise of the ‘the largest deportation of illegal immigrants' in history. He is, if nothing else, a showman.  

According to the Brainfood panel, there are something like 11-20 million undocumented workers in the US - 10-15% of the labour force. These people perform a great many of the 'essential work' (remember that??) that enable societies to function - logistics, warehousing, driving, sanitation, agriculture, food processing, food delivery. If Trump manages to deliver on his plan to get rid of these people, quite obviously we will see a pandemic level hit to the economic and social fabric of the country.

I don't think it is tenable he will be able do it but let's imagine that he does.

Replacing those workers will not be easy; the reason why the work is performed by immigrant labour in the first place is precisely because local citizens will not take work that is poorly compensated, physically arduous, inconveniently located, inconveniently timed, quite often dangerous to life and limb, with zero career prospects and low social status to boot. If those people disappeared, the work will not be performed by local citizens, which will simply lead to a replacement of one type of immigrant with another. We in the UK had some experience of this when Brexit - another anti-immigrant impulse - cut us off from EU labour upon which retail, healthcare, veterinary, security, logistics services all depended. The years since 'taking back control' over UK borders has seen unprecedented highs in immigration, though this time non-EU immigrants mainly from India, Nigeria, and the Philippines replacing Italians, Poles, Spaniards and Portuguese. Probably not the outcome Brexiters hoped for.

Many of our American readers will want me to make a distinction between legal vs illegal immigration. This argument I can fully understand and even endorse, to a degree. Legal immigration in the US is in dire need of reform, but the right context to do that reform is not when you're under pressure to bring more people in due to the deportation of the undocumented.

Moving to a 'skills based' immigration policy is also a faux pas. This because there is no such thing as unskilled labour. It takes skill to debone a chicken carcass. It takes skill to drive a truck. It takes skill make a pizza. What these people lack is not skill but status. And immigration policies which are 'skill based' are really rationalisations of status assessments in disguise. The problem with labour importing countries is that we disdain the work, despise the workers who do it but are unable to accept the reality of our appalling snobbery.

Anyway, deporting undocumented workers is no easy task - you must catch them first. Any significant deportation programme will require a significant bureaucracy to carry out. Perversely for anti-government Trump, this may inadvertently lead to an increase in public sector employment as immigration departments, border control guards and the like scale up to meet the demand of exiting million workers - and presumably also millions of their dependents.

Of course, a great portion of this work will thus be delegated to employers, landlords and social services, each of whom will now have to become part time immigration police. Needless to say, the administrative burden will slow down productivity, reduce competitiveness, reduce growth. Another perverse outcome for a Trump obstensibly against red tape.

Background verification tech will do ok though - I suspect products like Checkr, Zinc and the rest to boom. Recruiters too - will find a larger portion of their time on employee verification, fraud detection and the like. Our jobs in this case are unlikely to get more pleasure but this requirement will be one of the countervailing pressures against the reduction of recruitment teams.

Part Two - Urban Renewal, Fiscal policy, War policy, BTC / Cryto, USD. If you want to get updated when that is published, subscribe to the newsletter and you'll be notified - should be next Monday but it may slip into Tuesday again.

Thoughts on these observations 1-6? Let me know in comments, worth starting a conversation on this. Thanks for reading so far 🙏

Now out of the kitchen, onto the lounge 👇

What's Going On?

Big List of Recruiting and HR Events to Attend in 2024 & 2025

We've updated the Big List of Recruiter & HR Events for 2024 and now 2025. Make sure you add your events to this list, and we're going to get the thing updated ready to relaunch next year. Check out the events in the spreadsheet here and make sure you bookmark this as its going to be the 'forever stew' of industry events. Spreadsheet is here

ERE Recruiting Conference, November 12-14, Anaheim, CA, USA

Well I am in California - and first time in Southern California. Looking forward to seeing as many of you as I can whilst I am here; best chance is going to be at the ERE Conference in Anaheim - so make sure you come and say hello if you're attending. Tickets are prob gone but here's the discount code anyway - give it blast and let me know what happens. HLERECA24

AI in Talent Acquisition: From Automating Tasks to Strategic Transformation, Nov 13th, 10am ET /

In the middle of the whole event at ERE, I am going to get up early and participate in this Eightfold webinar on AI automation to TA. We've already seen some incredible DIY activities from pioneering recruiters but we are seeing AI-powered updates from recruitment technology vendors which promise change in the way we perform our roles as Talent Acquisition professionals. Delighted to be part of this webinar - register here

Brainfood Live On Air - Ep282 - 2024 in Review: State of Sourcing, Friday 15th Nov, 12pm PT

Time to review the State of Sourcing in 2024. What significant things have happened to the sourcing side of the industry? How does this impact our future direction? We're with Randy Bailey, Principal Intelligence Advisor, (ex-Walmart), Carmen Hudson, Senior Director Talent Acquisition (ExtraHop), JT Haskell, Talent Acquisition Director (ex-Reddit) & David Paffenholz, CEO, (Juicebox) & Cassie Lundquist, Senior Talent Acquisiton Specialist, Ecolab - register here

Founders Focus - Ep52 - Up close and personal with Matthijs Metzemaekers, Founder, Carv, Tues 19th Nov, 10am GMT / 11am CET

We are back with Founders Focus - the show where we get up close and personal with the people changing the way we work and hire today. Interview intelligence and Recruitment Task Automation has been the hot categories in tech over the past 12 months and it is fantastic to see European based recruitment tech making gains in this space. I'm excited to be chatting with serial entrepreneur and recruitment tech veteran, Matthijs Metzemaekers, CEO of Carv. Register here

Mastering the Skills Economy: Freelance Operations & Technology, Nov 20th 2pm GMT

Excited to moderate this conversation on how organisations can use independent workers into a consistent, sustainable and effective function for business. Remember, the freelancers were the original skill based hires - be interesting to see how what lessons we can learn from working with them. Register here

Tec Rec 2024, TITANIC Chaussee Hotel, Berlin, November 24th–26th, 2024

I am back in Berlin folks, first time at Rec Tec since before Covid. Looking forward to sharing thoughts on the state of tech hiring, learning from local employers as to how the changing circumstances have impacted hiring posture, diversity and inclusion, state of remote, state of outsourcing. I have a 50% discount on tickets so make sure you get them here rather than elsewhere!

HR Meet Up with WeAreDevelopers, Thurs 27th November, 6pm CET, Schottenfeldgasse 23/D, 1070 Wien

Haven't been to Vienna for the long time, so the opportunity to jump into this community meetup was too good to give up. I'm going to be sharing a panel with Rudi Bauer, MD (WeAreDevelopers) and Eva-Maria Meyr, Global Director of Employer Brand (Dynatrace) where we'll review the year that is so rapidly coming to a close. Make sure you come up and say hello. Register here

FiesTA, 23-24 January 2025, Bangalore, India.

Delighted to be invited back to Bangalore for this new event to talk about the Next Decade of Recruiting. We're going to have to track long term trends in human capital formation, demographic crisis, climate change, new energy transition and more in what should be the most sci-fi talk I've ever given. It's only 2 months away, so I had better get ready in preparing it!. Tickets here - DM me if you want discount code.

If you have an event, webinar or podcast going on next week and want it featured on next week's newsletter, comment below with the link and event details. Don't forget to at mention me so that I see it

Whose Story?

It's Octav Buzoianu, Talent Lead – Global Talent Enablement, Strategy & Growth.

Octav has been a great contributor to the recruitment community over the past several years but it is only in the last few that I've got to know him better. Of course, I asked him to do 20 Questions - here are his unique and inspiring answers. Have a read

End Notes

Finally arrived in Anaheim after a longer-than-expected stay in Los Angeles. Even though it has only been two days so far, there is no question that my education has accelerated since being here and interacting with the people and systems in the California, including many unexpected pluses - LAX Airport is superb and the LA Metro is very decent indeed. What's this about US public infrastructure being the doldrums??

Here to learn more and looking forward to doing so. If you're in Anaheim / LA, message me if you want to meet up

Cheers!

Hung Lee is the curator of Recruiting Brainfood, and now This Week In Recruiting. Subscribe to both if you are into recruiting or HR or just interested in world of work.