During the Covid-19 pandemic, many American companies have been battered by furloughs, pay cuts, layoffs and closures, resulting in the highest unemployment rate since the Great Depression. In response, the U.S. government introduced a package to increase unemployment benefits by $600 a week to help stimulate the economy. This, unfortunately, had a much different impact than intended.
Unintended Side Effects
With increased benefits, more than two-thirds of workers on jobless benefits were making more in unemployment than they did while working. One in five eligible unemployed workers received benefits at least twice as large as their lost earnings, according to economists at the University of Chicago. At the same time, companies filed for the Paycheck Protection Program, designed to help them bring back furloughed workers and prevent additional layoffs.
The result was a perfect storm in talent management: Companies had work to offer, but workers made more by staying unemployed, while also avoiding the risks associated with working in proximity to others.
Recovery of the Economy
Most experts agree that the recovery of the economy depends significantly on the course of the virus and the development of a vaccine. Some AI models predict the pandemic will end in December, while Dr. Anthony Fauci and the White House COVID-19 task force reported on July 31 that the virus will “likely continue for some time.”
Despite the uncertainty, American consumers increased their spending in June by 5.6%, according to the Bureau of Economic Analysis. Analysts, however, expect spending to shrink again, now that the extra benefit expired on July 25. Alicia Adamcyzk, writing on cnbc.com, calls it a looming “income cliff.”
Recovery of the Workforce
We expect to see many workers back in the job market. This is good news for employers who have seen labor shortages, resulting in a shortage of goods and services felt across all industries. However, as workers come back, they will have more choices than ever before.
Talent with specialized skills will continue to be in high demand. These candidates are likely to be cautious about taking new jobs, feeling that being “last in,” they also will be “first out” if the economy dips again. Working virtually can be challenging for new employees, not only in terms of learning the ropes, but also in terms of building important relationships with the team.
One approach you can take is to grow talent from within. Expect to see more movement internally at larger companies, as employees see new opportunities to explore. Many will be interested in trying on a different hat, or taking on new responsibilities that could lead to promotion. Make sure you are using best practices in employee engagement to retain your talent.
Opportunities to work remotely have increased quite a bit, and many companies — like Slack, Facebook and Twitter — plan to continue offering the option even after COVID is over. This new flexibility will make it easier for professional women who opted out of work to re-enter the workforce and maintain the work-life balance that is so important to them. COVID has made it very clear that many, many jobs do not require a specific physical location.
Setting Up for Successful Hiring
A brave new job market calls for brave new talent acquisition strategies. One idea is to set up virtual job fairs (VJF). Done well, a VJF introduces candidates to the company and its products, core values, culture and employment value propositions. All participants have a front-row seat, and senior executives, hiring managers and others can interact directly with the audience.
Your VJF can include breakout “rooms” for different areas of interest, as well as virtual one-on-one or panel interviews. A key benefit of VJFs is that they provide candidates with instant feedback and fast action — a common complaint from candidates is that they typically experience the exact opposite.
Hosting a VJF may stretch your talent acquisition resources, but a strong recruiting firm can help here. For instance, at Pierpoint we have contract recruiters who can partner with hiring managers before and after the event, assisting with interviewing and selection, and carrying the ball through offer to hire.
In fact, this environment highlights the value of working with a top-quality external partner. Specialists like those at Pierpoint can help you identify and engage a larger talent pool. A flexible recruiting firm can help you reach hard-to-find target groups, like qualified diversity candidates and highly specialized talent. When selecting an external partner, make sure the firm has the flexibility to scale up quickly, pause work when necessary and otherwise respond effectively to the uncertainties of today’s economy.
Plenty of people talk about “when things get back to normal,” but those who are going to thrive will be proactive about creating a new normal.