The U.S. has entered a period of jobless growth. This unusual phase is marked by high productivity and GDP growth in tandem with restrained hiring. Some organizations may see this as a win. After all, they have leaner teams, lower labor costs, and improved efficiency, all while maintaining or even increasing productivity.
However, experts warn that jobless growth carries significant long-term risks for organizations. First, sustained underhiring can cause issues such as poor morale, burnout, stalled innovation, and loss of your competitive edge. Second, jobless growth leads to higher unemployment rates, reduced consumer spending, increased inequality, and social instability, all of which affect the overall economy – and which may affect your own bottom line.
Rather than bask in the cost savings of a reduced workforce, it’s important for organizations to understand and address the costs of delayed hiring. Developing effective ways to bolster your workforce while working around budget constraints and global socioeconomic uncertainty is critical to riding out 2026 successfully.
The Labor Market Reality: Low Hiring, Rising Productivity
The job market has been cooling since 2022, as organizations find ways to do more with less. In March 2022, job openings hit a high of about 12.2 million. However, those have been falling steadily. According to the Job Openings and Labor Turnover Survey (JOLTS), posted by the Bureau of Labor Statistics (BLS), job openings numbered just 7.1 million in November 2025.
The BLS also reports that productivity increased by 4.9% in the third quarter of 2025. These gains were made possible not just by increasing the implementation of digital tools, AI, and automation, but by changes to the way people work. Faced with global socioeconomic uncertainty, organizations have been under pressure to control costs. The ability to create more output with fewer workers feels prudent and necessary in 2026.
However, leadership teams must understand that these productivity gains will likely not translate to long-term resilience. Understaffed teams are subject to pressure and, without strong, high-performing teams that comprise the right talent, organizations will be limited in their ability to adapt, innovate, and stay competitive.
The Hidden Risks Of Delaying Hiring
When leaders choose to focus on increasing output without also expanding their workforce, they create risks for their employees and may compromise organizational performance.
Quiet Cracking: When Efficiency Turns Into Exhaustion
The term “quiet cracking” was coined in 2025 to describe situations where employees struggle to keep up with workplace demands but instead quietly crack under the pressure. Some employees may be able to handle increased workloads for the short term, but if they’re expected to shoulder those additional responsibilities indefinitely, they may become unhappy and overwhelmed.
Quiet cracking can have significant consequences for teams and organizations. Risks include:
- Employee disengagement;
- Declining productivity, creativity, and innovation;
- Reduced willingness to go above and beyond;
- Frayed relationships with clients, vendors, and stakeholders;
- Erosion of your brand; and,
- Increased turnover.
Quiet cracking can be well underway before leadership notices, and damage may occur before the situation can be addressed. While the immediate cost savings of a smaller headcount might be tempting in the short term, you could end up incurring high long-term costs due to attrition, hiring expenses, and productivity loss while a replacement worker is found.
Strategic Risk: Falling Behind The Market
The impact of delayed hiring goes beyond affecting your employees’ work performance and mental health. It broadly affects your organization in diverse ways. Productivity may take a hit, affecting your bottom line. But beyond that, putting a pause on hiring can affect:
- Your company brand and reputation;
- Product development;
- Implementation of new tech tools; and,
- Your internal talent pipeline, particularly for leadership roles.
The McKinsey Global Institute reports that when organizations treat their workforce as a strategic asset – instead of just an expense – significant gains are made over time. But when an organization has long-term talent gaps, those gaps become harder to fill as time passes. As competitors continue to invest in their workforce, modernize their operations, and adapt to market trends, the discrepancy between your company and theirs becomes larger. The cost and effort to find top talent with the skills to fill the ever-widening gaps increases tangentially.
Standing still rarely creates a neutral outcome. Instead, organizations who stand still often fall behind.
A Smarter Path Forward: Flexible Talent Strategies
It may sound counterintuitive, but when hiring needs to be scaled back, the best way forward is flexibility, not inaction. Adaptive workforce models can help you balance cost efficiency and effective investment.
Staffing: Momentum Without Headcount Growth
Choosing to incorporate project-based staffing into your workforce ensures that your organization stays agile and competitive while managing budget considerations. Organizations often bring in skilled professionals to contribute to defined initiatives such as:
- Backfilling critical skills gaps;
- Offering support during peak times or during times of transformation;
- Funding talent with available budgets; and,
- Scaling teams up or down quickly and as needed.
Staffing is a terrific choice when an organization is concerned about speed and agility. Staffing allows leaders to quickly address critical business needs while maintaining a core of internal talent.
Consulting: Expertise Without Long-Term Overhead
Bringing in consultants provides a cost-effective way of tapping into specialized expertise. Consultants can help bridge skills gaps by providing critical knowledge that may only be needed over the course of a project. Organizations that tap into the specialized skills of consultants can:
- Access niche expertise on an as-needed, cost-effective basis;
- Accelerate project timelines;
- Alleviate strain on teams; and
- Maintain accountability on timelines and outcomes.
Contracting consultants allows your organization to complement and support your existing talent with an eye to cost-effectiveness and agility.
Fractional Leadership: Senior Talent Without Full Cost
As explained in a piece at Fast Company, a fractional leader is “an executive who assists a company and shares their expertise for a fraction of the time.” Fractional leaders in roles such as CIOs, CTOs, CDOs, or CSOs are a compelling solution for filling in leadership gaps in a cost-effective and agile way.
While financial considerations are often the main reason for retaining fractional leaders, there are several other benefits to hiring these professionals, beyond the cost savings. For example, they can:
- Focus on and quickly solve targetted issues, since the scope of their role is limited to those issues;
- Provide fresh perspectives, which can lead to innovation;
- Offer objective insights to persistent issues; and,
- Increase your agility and flexibility.
Fractional leadership allows you to access experienced leadership without the overhead costs or long-term commitment.
The Executive Takeaway
Although productivity is rising, today’s labor market remains one of restraint. Organizations are cautious about hiring, and teams are being asked to do more with less. However, it’s essential to remember that when companies spend less on talent, they don’t just reach a standstill – they often fall behind.
Instead of pulling the reins on all hiring, organizations need to investigate and incorporate new ways of accessing talent. By temporarily accessing professionals through staffing, consulting, and fractional leadership solutions, companies can support their internal teams and increase their competitive advantage in today’s global marketplace.
