Employment In A Pandemic
Our new reality, what does it even mean? What industries have been the hardest hit? As unemployment claims continue to mount, some of the most negatively impacted industries seem obvious but others have struggled less publicly. While leisure and hospitality have taken a direct hit, it is important to consider the cascading effects that have impacted retail, manufacturing, nonessential healthcare and professional services.
Let’s start with the good news. In June, the U.S. economy added a record 4.8 million jobs with the unemployment rate at 11.1 percent, according to the Bureau of Labor and Statistics (BLS).[1] These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the COVID-19 pandemic and the efforts to contain it. Although the number of unemployed fell in June, we still have a record number of people who are receiving unemployment benefits, presently at 19 million nationwide.
You would be hard pressed to find an industry that has not suffered some kind of repercussion as a result of the COVID-19 pandemic. Attempting to capture all of these impacts individually is impossible, but we’ve pulled information from the most prominent industries as a representative sample to help better analyze the current state of the job market.
Tech:
As work from home becomes our new reality, employers need to be giving significant consideration to their tech staffing needs over the next 2-3 years. Information Technology (IT) would seem like an obvious field to expect a surge as telework becomes the way of life. Trends indicated an initial surge in the hiring of IT contractors in an effort to facilitate the ramp up of work-at-home environments. According to Jeff Tollefson, Chief Executive of MnTech in Minneapolis, the biggest increase in demand was for Information Security Analysts as concerns around security and access issues has become paramount.[2] However, a May 2020 survey from management consulting firm Janco Associates, suggested that the field is not likely to see increased hiring trends until late 2020. It is important to note that this assumes we see continued reopening and progress for a demand of goods. Janco CEO Victor Janulaitis, expects the net number of new IT jobs in the United States in 2020 will be about 35,000 versus the 94,500 it had expected prior to the pandemic. For a comparison, in 2019 the IT job market grew by 90,200.[3] Local governments and businesses are indicating demand for tech workers, and as our economy continues to recover, we expect to see the demand for IT jobs follow a parallel trajectory.
Construction and Landscaping:
Many construction projects were on immediate hold as lockdowns went into effect over the majority of our country. One Twin Cities firm said that they had projects for new retail, medical office and warehouse space “put on indefinite hold”.[4] Even after construction and landscaping workers were deemed “essential employees” in Minnesota, everyone from large corporations to the average home remodeler were unsure about resuming their projects given the uncertainty about an economic recovery. Project costs and duration are on the rise due to slower progress and huge disruptions in the supply chain. Construction companies have had to scramble quickly to deal with the new supply chain challenges as well as increased health and safety concerns for construction and landscaping workers. Trends show less workers being assigned to more worksites, in an effort to maintain social distancing protocols. This trend is supported by the CDC and construction worker and landscaper safety recommendations.[5] Consumer confidence in the economic recovery will play the most important role in hiring trends in this industry.
Banking/Financial Industry:
In an industry which is still working on image recovery from the last economic downturn, our financial institutions have played an integral part in both the handling of, and potential recovery from this pandemic. Having been given the responsibility to manage and distribute federally subsidized business loans, we are seeing positive hiring trends in specialized banking sectors such as loan officers. According to the Mortgage Bankers Association, loan application volume increased by 7.3 percent the week ending April 10, 2020, with refinance volume up 10 percent in the same time frame, this represents a 192% increase year over year.[6] We are optimistic about the continued demand for skilled workers to fill positions within banking and financial services. An article from Bloomberg notes that many banking institutions are pledging not to cut jobs and highlights that Bank of America “has moved thousands of employees to its consumer and small business units to deal with the crisis, including bringing in temporary external hires.”[7] The banking and finance industry will continue to require workers to be flexible and highlight their transferable skills when trying to enter, or reenter this workforce.
Healthcare Industry:
With the continued support and need for healthcare workers at the forefront of the COVID-19 battle, this is an industry with a mixed bag of results when it comes to the current job market. “The healthcare industry is typically one of the fastest-growing industries, with an average of 8,500 jobs being created every month. However, in March 2020 only 200 jobs were created. The industry saw its largest decline in the last three decades with 43,000 jobs cuts, according to the US Bureau of Labor Statistics.”[8] In performing our own labor market research at Raderstorf Bey & Associates, locally we have seen continued hiring in this field. However, the focus seems to have shifted from hospital and clinical positions to in home health care and assisted living facilities. Our reliance on healthcare workers has not diminished, and as hospitals are able to perform more elective procedures, we will likely see a resurgence of hiring. According to POLITICO, “… unlike other sectors, the providers and industry experts alike are fairly optimistic that the sector will bounce back relatively quickly once the crisis subsides. The health care jobs lost now will return once businesses start to reopen and Americans return to daily life. It’s likely there will be a lot of pent-up demand for care that was delayed — both elective procedures and management of some chronic conditions.”[9]
The Rest:
We know industries like grocery and on-line retail will continue to stay strong with existing and developing platforms for both purchasing and delivery. Our farming and agriculture industries continue working diligently to keep grocery shelves stocked but the ongoing tariff issues are adding pressure to workers in this industry.[10] The new delivery platforms that our retail companies are being forced to consider are adding increased need and pressure on the trucking and logistics industry. The cascading effects can be observed through the entire farm-to-table process, from the seed being planted to it arriving at your table. Industries will need to work together in order to develop best practices taking into consideration our new normal.
The Bottom Line:
It will be key for job seekers to remain flexible and consider industries that they may not have in the past. Highlighting transferable skills will be paramount to successful job placement. Bob Shoenbaum, Executive Search Consultant for Ballinger/Leafblad, explained that we’ve had a robust economy for over ten years, job seekers will need to be flexible and be willing to take a decrease in pay for the time being. Amid the uncertainty and anxiety that runs deep in our world of work today, there is hope. Despite seemingly unsurmountable challenges, companies are allocating unprecedented amounts of capital and human resources to ensure the safety of their employees. This trend will likely translate to meaningful change for both the employed and job seekers alike.
[1]https://www.bls.gov/news.release/pdf/empsit.pdf
[2] https://www.startribune.com/inside-track-some-minnesota-tech-companies-are-still-hiring-for- now/570305562/?refresh=true
[3] https://www.computerworld.com/article/3542681/covid-related-us-it-job-losses-have-stopped-report.html
[4] https://www.minneapolisfed.org/article/2020/construction-impact-how-covid-19-is-silencing-the-shovels
[5] https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/construction-workers.html
[6] https://www.mba.org/2020-press-releases/april/mortgage-applications-increase-in-latest-mba-weekly-survey-x263475
[7] https://www.bloomberg.com/opinion/articles/2020-03-30/coronavirus-banker-job-cuts-will-be-back-sooner-or-later
[8] https://www.docwirenews.com/docwire-pick/covid-19s-economic-effect-on-the-healthcare-industry/
[9] https://www.politico.com/news/2020/04/20/health-care-workforce-crisis-197468
[10] https://www.forbes.com/sites/chuckjones/2020/04/11/farmers-double-whammy-tariffs-and-now-coronavirus/#354a8f096c1f