Why hiring now is unlike any other recessionary period
Paul Smith, Managing Partner of Odgers Interim US, discusses why, unlike ever before, organizations should hire and acquire talent during this period of economic recession
2020 has been a year of extreme highs and intense lows. The global pandemic and consequential economic recession have persisted longer than anyone had initially anticipated, making this a time of great change and widespread uneasiness. As the health crisis continued, debates were aroused concerning long-overdue conversations. In recent months we have seen public unrest in response to many contemporary issues – including racism and the climate crisis through to the discord surrounding the presidential election just a few weeks ago.
However, unlike previous periods of downturn and political uncertainty, we have seen a unique reaction from the job market. Under usual circumstances, unemployment levels skyrocket with a long and rather arduous recovery curve. Taking for example the 2008/9 recession, unemployment surpassed 9% in April 2009 and it took two and half years to bring it back below that level. However, unemployment in the US this year returned to below 9% within just four months. This deviation from standard patterns is due to the discrepancy of the pandemic’s impact between industries. Some industries and firms are in ruins while others have continued unaffected, some have been able to rebound quickly, and in cases - on the other end of the scale – there are companies now prospering from the disruption.
While unemployment rates remain at unprecedented high levels going into the end of this year, employers also need to be aware of the surprisingly high number of job openings. The situation we continue to navigate has presented unforeseen challenges, as well as opportunities, and needs to be critically assessed. Going forward, changes in unemployment rates will vary vastly based on factors such as industry, geography, educational level, and skillset. Employers need to be ever more attuned with the specific needs of the business and the workforce available when going out to hire in the current climate.
For many the global disruption triggered financial safeguarding action with decisions impacting the workforce - examples including redundancies, pay decreases and hiring freezes. Data released from the latest survey by the Conference Board revealed 12% of businesses say they’ll freeze hiring or restrict it to critical roles in the fourth quarter of this year - adding to the 15%, 31% and 77%, respectively, that took those actions earlier this year.
Although these actions to reduce costs will put businesses in a more stable financial position going into next year, companies must also be investing in their recovery and reinvention plans. This year has brought opportunity for organizations to ‘reset’ - to assess their performance, pinpoint areas for improvement and consider their future. With this new understanding and vision, companies need to consider how to bring about change to align the organization with the evolving ‘new normal’.
Change and transformation can be rather daunting, especially during the current uncertain circumstances, but it can be eased and successfully delivered with the right support and leadership. At this time, organizations may want to look for external expertise as a way of garnering insight on the market, bringing in new ideas, and hiring direct leadership and management of the program from someone who has a track-record of delivering successful business transformations during periods of crisis and disruption.
Going into next year, there is a renewed sense of hope. The recent announcements of successful vaccination trials and the clarified presidential election result anticipates the end of the pandemic and the beginning of a new economic, political and social cycle. Organizations need to be looking to the future, investing in a period of renewal and reinvention and bringing in the right talent to drive this transformation forward.
For more information please contact Paul Smith.