By now, your inbox is filled with alerts about tariff announcements and their potential impact on your business. These import taxes — which make foreign goods more expensive by design —seemed like a relic of the past until recently. Now they’re front-page news again, forcing HR departments to come up with a plan.
Nobody has a crystal ball for how these trade measures will play out in the long run. Some businesses are already scrambling to revise budgets, while others are rethinking their entire supply chain strategy. What’s clear is that waiting for perfect clarity isn’t an option for HR teams dealing with immediate pressures on compensation, talent retention, and staffing levels. Learn how HR teams can take a proactive approach to common issues caused by tariffs.
1. Rising Costs & Wage Pressures
Most organizations will be forced to pay more for the goods they need to conduct business. Those elevated costs will hit employees’ pockets too, as cost of living increases. But responding to inflation with salary adjustments will be difficult. In a recent survey by ResumeTemplates, 33% of corporate respondents said they plan to delay raises and bonuses in response to tariffs.
And if you are tasked with filling a position, it may be with a limited recruiting budget or a lower entry-level salary then the norm.
How HR Can Help:
Now’s the time to get creative. Tout the benefits your company offers, and consider additional benefits you can deploy on a budget. For example, could your company implement flexible hours or a compressed workweek?
One perk to consider, especially in a time of economic uncertainty, is on-demand pay. This valuable recruitment and retention tool, (available with Paycor Payroll) provides your workforce with timely access to money they’ve already earned prior to payday.
It’s also important to make sure your employees feel valued and supported. Focus on culture building and employee engagement. Using a tool like Paycor’s Recognition Center makes it easy for managers and employees to recognize great work, celebrate accomplishments, and inspire colleagues.
If your recruitment budgets and salaries are slashed, chances are your competitors made cuts, too (silver lining?). Compensation benchmarking enables you to compare your salary ranges with similar roles and industries to offer competitive and fair pay for your employees and job candidates. If low salaries are impacting recruitment and retention, benchmarking gives you numbers to show leadership to justify increases.
2. Supply Chain Disruptions
With supply chain disruptions, some companies may need to quickly adapt to new ways of working. Operational shifts can require rapid workforce realignment and new skill sets.
How HR Can Help:
When upskilling and reskilling employees, it helps to know what areas current employees excel in. A skills management tool like Paycor Skills allows employees to build skills profiles. Then, leaders can match people with the various needs throughout the company. When creating new positions, the AI-powered software helps map out the skills needed.
HR can also support operations by identifying workforce gaps early and creating contingency plans for staffing in affected departments. Consider assembling cross-functional taskforces to address urgent operational needs.
Empower employees and leaders navigating new waters with a Learning Management System that offers the courses they need to pivot successfully. Providing access to training not only supports workforce agility but also reassures employees that the organization is invested in their development — even in uncertain times.
3. Economic Slowdown
It’s the outcome no one wants, but the difficult financial outlook may force recruitment pauses or even workforce reductions. 38% of corporate respondents to the ResumeTemplates survey said they plan to implement hiring freezes in response to the tariffs. 27% see layoffs on the horizon.
How HR Can Help:
Every dollar counts. Utilize workforce management tools to stay on top of labor spend. For example, Paycor Scheduling automates and optimizes employee scheduling, which will be useful as staffing needs and budgets shift. The software allows you to set labor budget caps by day or week and location (hours or dollars) and get notified for budget overages. And with Labor Forecasting you can make sure you have adequate staffing at all times.
Instead of defaulting to layoffs, HR can look inward. Use Career Management software to identify high-potential employees and align individual goals with evolving business priorities. Redeploying talent into open or high-need roles preserves institutional knowledge and shows your commitment to retaining your workforce
It’s also important to plan ahead. Developing flexible workforce strategies and preparing for multiple financial scenarios can help HR respond quickly and confidently to changing business needs.
Paycor Has Your Back
The economic challenges brought by tariffs require HR teams to be more nimble and resourceful than ever before. While uncertainty remains about the long-term impact, taking proactive steps can help your organization weather the storm.
On top of the software solutions listed above, Paycor automates and streamlines routine HR tasks, giving you more time to focus on future-proofing your organization. With the right strategies and technology, you can stay agile, protect your workforce, and lead with confidence.See Paycor’s solutions in action with a guided product tour.