May 28, 2020 – Americans displaced by the coronavirus crisis again filed for unemployment benefits in historic numbers within the last seven days, with the Labor Department reporting this morning another surge of 2.1 million claims. More than 40 million people have now filed for unemployment benefits over the past 10 weeks, representing the biggest jobs loss in U.S. history.
Continuing claims, which lag initial jobless claims data by one week, totaled 21.05 million during the week, down from the prior week’s record 24.91 million. Consensus estimates were for 25.68 million continuing claims for the week.
“Although initial claims are declining, the pace may only be plateauing. If UI claims remain in the millions for the next few weeks, it may signal that relaxed state-mandated restrictions alone aren’t enough to staunch the flow of unemployed Americans,” said Daniel Zhao, Glassdoor senior economist.
For the week, 33 states reported 7,793,066 individuals claiming Pandemic Unemployment Assistance benefits and 22 states reported 222,300 individuals claiming Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates were in Washington (31.2), Nevada (26.7), Florida (25.0), Hawaii (23.4), Michigan (23.1), California (20.6), New York (19.9), Rhode Island (18.8), Vermont (18.2), Connecticut (18.0), and Georgia (18.0). The largest increases in initial claims for the week were in California (+31,764), Washington (+29,288), New York (+24,543), Florida (+2,322), and Michigan (+1,549), while the largest decreases were in Georgia (-65,041), New Jersey (-27,324), Kentucky (-22,051), Louisiana (-11,580), and Pennsylvania (-11,172).
The employment crisis in the U.S. will likely weigh on the economy for some time, according to Goldman Sachs. “The U.S. unemployment crisis will not stand in the way of a near-term economic recovery but is also unlikely to go away quickly. Although the uncertainty is unusually large, we still see the U.S. unemployment rate around eight percent in late 2021, well above the levels in most other advanced economies,” the firm wrote in a note Tuesday.
Talent Acquisition Experts Weigh In
“Clearly these are unprecedented times not only for many businesses but for consumers, healthcare and educational infrastructure, supply chain and, of course, our government,” said Carlyle Newell, managing partner at Boyden. “The economy even with various government stimulus packages is still extremely challenging.”
“We see businesses needing to adapt to the ‘new normal’ as they navigate the complexity of COVID-19 and its impact on their business model, revenue forecast, concerns for employees’ safety and health,” he said. “Some of our clients are doing well, such as consumer packaged goods, technology, and health wellness, as they meet the demands of changes in consumer’s behavior and work environment.”
“This isn’t a downturn as much as it is a structural disruption in which whole segments of our economy are forever changed,” said Dr. Foster Mobley, founder and chairman at FMG Leading. “This isn’t just about restarting America’s employment engine. We’re realizing we’ll be driving a different vehicle.”
“I think this pause will be relatively short-lived,” said Belinda Yan, founder of Presidio Search Group. “Many companies are having their teams re-audit their hiring needs and prioritizing replacement hires first, so those are still ongoing. Recruiting strong candidates away from their current organizations, though, can be challenging.”
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“Some will not want to leave their businesses while they are navigating their own teams through this crisis,” she said. “Others will not want to take on any additional risk in a new role when they already have stability and political capital built up at their current company. Hiring for new initiatives is getting pushed out and ongoing late stage searches are either on pause or treading water since candidates are unlikely to get hired without meeting executive management teams in person. I expect (hope) that by Q1 2021, activity begins to normalize somewhat.”
“This is a relationship business,” Ms. Yan said. “There is no better time than the present to reach out to your network to reconnect, offer strategic advice and strengthen relationships on both the client and candidate side. Being more flexible and offering some short-term concessions on terms where appropriate can also be helpful. Empathy is particularly important during times of crisis.”
“Although unemployment rates are extraordinarily high, the very best executive talent will remain selective about where they work, and for who,” said Jason Hanold, managing partner and CEO of Hanold Associates. “Now, when considering a future employer, new considerations have elevated above most others: How did the company perform and navigate during the pandemic, and how did that company’s leadership treat their employees.”
“The CEO and boards of directors have never viewed the role of the chief HR officer as critically important as they do during, and will after, this pandemic,” Mr. Hanold said. “The best CHROs have been leading their respective companies shoulder-to-shoulder with their CEOs. If the CHRO was not a critical partner during the pandemic, a move will likely occur post-pandemic.”
There are very few, if any, organizational decisions not being run through the CHRO today, he noted. “Forget the tired saying of ‘HR earning a seat at the table.’ Today, the decision-making table is in the HR leader’s office, and other functional executives are scheduling time, and bringing their seats, to join it.”
“I do believe that in many sectors we will see a slowdown in search but in the tech industry the need may grow,” said Robin Levitt, president and CEO of 4D Executive Search. “Top talent may be more hesitant to leave a stable job now; therefore, recruiters can play a key part in sharing a company’s story to those with whom we have relationships. Individuals also believe that when companies are serious enough to hire a recruiter, the opportunity is real. There is a lot posted out there right now just to build pipelines and passive talent will not respond to this.”
4D Executive Search is working on branding, connecting with its network and pivoting its services to best match client’s needs. “We may see more contract roles while the full-time jobs are put on hold,” she added. “We are taking the time to remind our clients that we place both contract and full time HR talent.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Erik Boender, Senior Research Editor – Hunt Scanlon Media