A Wait-and-See Economy Creates Wait-and-See Cultures

This week's labor market news told a story of hesitation. On Wednesday, Challenger, Gray & Christmas reported in Job Cuts Fall in September that U.S. employers announced 43,281 job cuts last month, the fewest for a September since 2022. Hiring announcements were weak too, with seasonal hiring well below last year. "Companies are in a wait-and-see period right now," Andy Challenger observed, pointing to energy costs, geopolitical uncertainty, possible rate increases and rising healthcare costs.

Two days later, the Bureau of Labor Statistics reported that the economy added just 29,000 jobs in September, with downward revisions to July and August. And as the Wall Street Journal's Careers & Leadership newsletter noted in September, the separation rate, which counts both layoffs and people who quit, has been stuck near its lowest levels since the years after the financial crisis.

Fewer layoffs, little hiring. Economists call it a low-hire, low-fire labor market. It is a careful and reasonable response to uncertainty. But it carries a cost that will not show up in either report.

What Waiting Does to People

When companies wait, people wait too. Employees who might have changed jobs stay put. Ideas that might have been raised stay quiet. Risks that might have been taken get postponed until the picture is clearer.

From the outside, that looks like stability. Inside the organization, it often looks like something else: people holding on to their jobs while quietly letting go of their ambition. They do what is required, avoid what is uncertain and wait for someone else to move first.

The anxiety is real. Challenger's data shows artificial intelligence is the leading reason cited for job cuts so far this year, tied to 120,136 announced cuts, about 21% of the total. When people see AI listed as a reason for layoffs, many conclude the safest move is to keep their heads down.

A wait-and-see economy can easily create wait-and-see cultures. And a wait-and-see culture is exactly the wrong kind to have when the next wave of change arrives.

Caution Is a Strategy. Paralysis Is Not.

Let me be clear: prudence is not the problem. Leaders are right to protect their organizations in uncertain times. Disciplined cost management and careful hiring are standards worth keeping.

The problem comes when caution at the top becomes silence everywhere else. Leaders can pause hiring without pausing growth. They can be careful with budgets without being careless with confidence.

This is where conviction matters most. I define conviction as the earned capacity to act on what you believe before the outcome is certain. Uncertainty is not a reason to suspend conviction. It is the moment conviction exists for. If leaders only act once the outcome is clear, they are not leading. They are following the data.

Conviction in a pause looks different from conviction in a boom. It is less about bold bets and more about steady signals: telling people what you know and what you do not, inviting their ideas even when budgets are tight, and making clear that contribution still counts when promotions are slower.

As I explored in The Fear of Being Wrong Is Costing You More, organizations pay a hidden price when people stop offering ideas because they might be mistaken. In a frozen labor market, that price rises.

Leading Through the Pause

In my work on Leadership in the Age of Personalization, one of the five shifts moves organizations from mission to contribution. The question beneath it is: What do you let them do? In a hiring freeze, the answer matters more than ever. When you cannot add people, the way to grow is to unlock more of the people you already have.

That means looking inside first. The information required to make the right decisions almost always exists inside the building. The conviction to put that information on the table is what is missing. Your people already know where the waste is, where customers are frustrated and where AI could genuinely help. A pause is the perfect time to ask them, because there is finally room to listen to the answers.

As I wrote in Why People Wait Until They Leave to Tell the Truth, the clearest insights often surface only when someone is on the way out. In a market where few people are leaving, leaders have to go looking for those insights on purpose.

Three Questions for Leaders This Month

What are our people waiting for permission to do? Ask directly. The answers will reveal ideas that uncertainty has buried.

Where can we grow without hiring? Look for stretch assignments, cross-functional projects and new responsibilities that develop people while headcount stays flat.

How are we talking about AI? If the only message employees hear is that AI cuts jobs, they will protect themselves rather than experiment. Show them how it can make their work more valuable.

The economy may stay in wait-and-see mode for a while. Your culture does not have to. The organizations that come out of this period strongest will be the ones whose people kept contributing while everyone else waited.

Want to explore these ideas further? Learn more about my work on leadership, identity and conviction at www.theglennllopis.com.