January 21, 2021 – The Labor Department reported this morning that 900,000 more Americans filed new claims for state unemployment benefits last week as Joe Biden begins his first days as President. The total was lower than Wall Street estimates of 930,000 and the previous week’s total of 965,000. The feds have now reported about 75.6 million initial jobless claims over the course of the COVID-19 pandemic — a number equivalent to roughly 47 percent of the nation’s workforce.
The figures continue to far exceed their pre-crisis levels as the resurgent pandemic leads to more stringent business restrictions and raises people’s fears of infection. Vaccine distribution is expected to restore economic activity later this year, but the rollout has been slower than expected and is limiting the speed at which the job market is able to recover. President Biden recently released details of his $1.9 trillion economic relief plan. If approved, it would provide $400 per week in supplementary unemployment benefits through September, aid for state and local governments and direct payments of $1,400 to individuals.
In total, nearly 16 million people were receiving some sort of jobless assistance as of the first week of the year. The numbers come on the heels of a dismaying December jobs report that showed employers cut 140,000 jobs in the last month of 2020.
“Taken together, the data on continued state claims confirms that there was a boomlet of pandemic-induced layoffs in December that is adding new strains on the economy and the unemployment system,” Andrew Stettner, a senior fellow at the Century Foundation, said in a note.
Overall, the best bet for the economy is more vaccinations, Carl Tannenbaum, chief economist at Northern Trust in Chicago, told The New York Times. “There is no better economic stimulus than a successful vaccine rollout,” he said. “It will reduce the risk of human interaction and provide a basis on which different types of businesses can open more durably.”
Unemployment Rate Remains at 6.7 Percent as Recovery Looms
Employment rose by 140,000 in December as the U.S. unemployment rate was unchanged at 6.7 percent, according to the most recent U.S. Bureau of Labor Statistics report. That’s down from a peak of 14.7 percent in April, but still far above the 3.5 percent rate in February before the coronavirus pandemic led to mass economic shutdowns across the country. Search professionals from Young Search Partners, Robin Judson Partners, and Whitham Group weigh in.
“The message is the same — the labor market is extremely weak,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “It’s going to be pretty rough over the next several months.”
During the week, 49 states reported 5,707,397 continued weekly claims for Pandemic Unemployment Assistance benefits and 51 states reported 3,026,952 continued claims for Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates in the week were in Kansas (7.5), Pennsylvania (7.2), Alaska (6.6), Illinois (6.1), Nevada (5.9), California (5.8), Puerto Rico (5.8), New Mexico (5.7), Colorado (5.6), and Minnesota (5.5). The largest increases in initial claims for the week were in Illinois (+49,557), Kansas (+22,128), California (+21,636), Texas (+18,732), and New York (+16,204), while the largest decreases were in Colorado (-10,996), Michigan (-5,802), Kentucky (-5,542), Louisiana (-4,868), and Washington (-2,573).
Veteran Search Consultant Weighs In
Simon Clark is the CEO of Monaco-based global executive search firm The Clark Partnership. He has been identifying and hiring leaders for over 25 years, strengthening client leadership teams and perfecting the individual candidate experience.
Mr. Clark has placed a number of leading senior executives, from chairmen and non-executive directors to CEOs and their direct reports, from innovative early stage, venture backed start-ups to Fortune 100 global tech giants, and high-profile private equity funds and their portfolio companies. He recently sat down (virtually) with Hunt Scanlon Media to discuss the pandemic, hiring, and to forecast his expectations for 2021. Following are excerpts from that discussion.
Simon, since the pandemic began how have things changed for your business and how you engage with clients?
There is much more flexibility where we work from and more work life integration. Employees are encouraged to incorporate in their day what they need to do for their own well-being. As travel is restricted, we communicate exclusively via video and phone calls making communication with clients more transactional rather than social. As a business we have become more considerate of what type of work we take on. We also had to be more creative around business development and the way in which we engage newer audiences (prospective new clients and candidates).
How have clients reacted?
We engage more with clients as the search work we are allocated has changed from growth hires to clients being more thoughtful around searches being allocated for talent management and succession planning vs growth. We are being asked to handle more confidential searches whilst clients leverage in-house talent acquisition teams more for other hires.
“The search work we are allocated has changed from growth hires to assignments being allocated for talent management and succession planning vs growth.”
What do you see for the job market and the search industry in 2021?
Unemployment will continue to rise, employees in sectors which have suffered most in the pandemic may need to retrain and find other sectors to work in. Industries that have been negatively impacted by the pandemic will be right for disruption. Companies will be looking for a new type of leadership. The search industry will benefit from growth in the following sectors: Technology; gaming; healthcare; food and goods delivery; and e-commerce.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media