The Federal Reserve’s Open Market Committee is meeting over the next couple of days to decide what to do with interest rates. Markets are expecting another cut.

At the Fed’s last meeting in September, chair Jerome Powell called the central bank’s decision to dial back interest rates a “risk-management cut.” The risk, in this case, is that an already-sluggish labor market could weaken further.

That slowdown is playing out in real time at businesses across the country, causing many business owners to make their own risk-management decisions.

Business has been fairly shaky this year at Fearless Foundry, a marketing and consulting firm near Seattle. Owner Madeline Reeves said many of her clients have been nervous about the economy, so they’re nervous about spending money, too. Some of them are even ghosting her.

“I think there is this moment where people get excited or want to initiate a project, and then, because they’re not confident in spending money right now, rather than giving us a firm no, they just disappear,” Reeves said.

Reeves said all of that uncertainty has her questioning what her business should be spending money on, especially when it comes to staff.

“Who are the people we need?” Reeves said. “What are the projects that we are going to have coming through? Do we have the right capacity on our team? Do we need to hire, or do we need to fire people?”

Reeves said hiring people can be risky, since there’s always a chance that a new hire might not work out.

“We have easily spent, probably close to $50,000, maybe closer to $100,000, on staff that are no longer with us, because they didn’t perform at the level that was expected on their job descriptions,” she said.

So, Reeves said she’s not hiring. Instead, she’s focused on improving the business itself: using new software to help existing staff manage projects.

“Because one, it doesn’t make sense to pay a person to do that job if a system can do it instead,” Reeves said. “And two, if I’m struggling to find somebody who will show up and do that role with consistency, I’d rather have a system in place, because then my clients aren’t impacted if the person is not performing.”

There are still plenty of businesses that want to hire.

“If we found qualified candidates, we would probably hire 25 to 30 more people across all of our operations at this point,” said Spiro Pappadopoulos, CEO of Schlow Restaurant Group, which operates seven restaurants in several states.

Pappadopoulos said he’s struggling to find candidates to be lead bartenders, kitchen managers, and other creative talent. As a result, he’s raised wages. He’s also offering more perks to his existing staff. 

“So offering even more flexible scheduling, better benefits, cross-training them, investing in their development, and maybe the next step in their career, to try and retain those people who are so valuable to us,” Pappadopoulos said. 

Pappadopoulos said all of that comes at a cost. So he’s decided to limit the number of days many of his restaurants are open. That lets him avoid having to hire extra staff just to keep them open even on slow days.

“We pay rent on every day, whether it’s a Monday lunch or a Friday night,” Pappadopoulos said. “We want to be open. But there are some operations that cost more to staff, than revenue that will come in during the time that the staff is there.”

Other businesses are trying to navigate this moment by getting bigger.

“We’ve been cautious, but we’re at a point where we literally can’t even fit any more bodies inside of our shop. So we have to grow, and spread out,” said Aaron Stinner, CEO of Stinner Frameworks, a bike frame manufacturer in Santa Barbara, California.

Stinner said the company’s in the process of moving into a new space with double the square footage. It also just hired a new welder, and Stinner’s hoping to hire a couple more. 

“One way to get more efficient is to hire, and another way to do it is to have space where you can have better tooling, and better setups, and better ways to make product more efficiently, which should eventually lead to more output,” Stinner said.

Making more frames will help the company bring in more revenue. That will help the company build up a buffer, in case the economy takes a turn for the worse.

“If it swings and sales slow for some reason, you have the ability to just absorb that,” Stinner said. “Because you’re not riding that line so hard, the make-or-break line financially.”

And if the economy doesn’t slow and demand stays strong, a bigger operation will help the company grow even faster.