May 7, 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 3.2 million claims. More than 33 million people have now filed for unemployment benefits over the past seven weeks, representing nearly 20 percent of the U.S. labor force. These figures are now at the highest levels not seen since The Great Depression, some 90 years ago. But the difference between now and then, say economists, is vastly different. Over the span of the last nine decades support structures and financial engineering techniques have been created to help the nation weather the worst of storms.
Still, the job losses may be far worse than government figures indicate. And that might dictate how this downturn, unique and breathtaking in its severity, is tackled. A study by the Economic Policy Institute found that roughly 50 percent more people than counted as filing claims in a recent four-week period may have qualified for benefits but were stymied in applying or didn’t even try because they found the process too formidable.
2 New Recruiting Guides Focus On Adaptation, Forecasts and Recovery
The nation’s vast executive search community and their clients are quickly adapting to the new realities of Covid-19 – and what it means for hiring in 2020 and beyond.
Hunt Scanlon’s latest executive recruiting industry sector report series will be available in 30 days. Hunt Scanlon Media will offer its two-part ‘Executive Recruiting State of the Industry Report’ focused on the Covid-19 pandemic and its aftermath. Part 1, ‘Adapting in Uncertain Times’ will examine how executive recruiters are resetting expectations in the midst of an unprecedented interruption to their business.
The part 2 installment, ‘Forecast & Recovery Strategies’ is our aftermath report – and provides critical data to guide your decisions and inform you on forward-thinking recovery strategies. Industry experts from across the talent and recruiting spectrum offer up their wide-ranging opinions, definitive viewpoints, and expert forecasts.
Hear from top talent experts, including: Options Group; Odgers Berndtson; ZRG; Wilton & Bain; Perrett Laver; Cejka Search; Thrive; Academic Search; Vetted Solutions; ON Partners; Versique; NPA Worldwide; Borrer Executive Search; IESF; Hightech Partners; Robin Judson Partners; Preng & Associates; Hartman Group Consulting; Cornerstone International; College Sports Solutions; Greenwich Harbor Partners; RevelOne; Human Capital Group; Slone Partners; De Forest Search; Westwood Partners; WGNinHR; Turning Point Executive Search; RSR Partners; Presidio Search Group & more! Buy Both Reports Now!
During the week, 11 states reported 994,850 individuals claiming Pandemic Unemployment Assistance and seven states reported 52,305 individuals claiming Pandemic Emergency Unemployment Compensation. The highest insured unemployment rates were in Vermont (25.2), West Virginia (21.9), Michigan (21.7), Rhode Island (20.4), Nevada (19.9), Connecticut (18.7), Puerto Rico (17.9), Georgia (17.3), New York (17.2), and Washington (17.1). The largest increases in initial claims for the week ending April 25 were in Washington (+56,030), Georgia (+19,562), New York (+14,229), Oregon (+12,091), and Alabama (+8,534), while the largest decreases were in California (-203,017), Florida (-73,567), Connecticut (-69,767), New Jersey (-68,173), and Pennsylvania (-66,698).
“The outlook for the labor market remains frightening,” said Nick Bunker, Indeed’s director of economic research. “That’s one in five jobs likely gone in seven weeks. Not only does the pace of layoffs remain at unprecedented levels, but hiring intentions remain depressed.” On Indeed, job postings were 39 percent below last year’s trend as of May 1.
“Initial jobless claims continued to moderate during the most recent week of data despite remaining at an extremely elevated level,” Nomura economist Lewis Alexander wrote in a note. “Fiscal stimulus and the gradual re-opening of some industries and states should help the labor market stabilize further. That said, considerable strain remains, and we continue to expect the unemployment rate to reach almost 20 percent in Q2.” Others predict a higher rate, perhaps climbing to 25 percent by late June.
Job losses of this scale are unprecedented. “The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” ADP Research Institute co-head Ahu Yildirmaz said in a statement. “Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month. This is the same time period the Bureau of Labor and Statistics uses for their survey,” Mr. Yildirmaz added.
The latest jobless claims numbers come a day before the Labor Department releases its nonfarm payrolls report for April. Economists surveyed by Dow Jones expect a plunge of 21.5 million, easily the worst month in U.S. history, with the unemployment rate surging to 16 percent.
In an interview with Savannah Guthrie on NBC’s “TODAY” show this morning, President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, said Friday’s official unemployment rate “will probably be something like 16 or 17 percent — but it will understate how bad the damage has been. I think the real number is probably around 23 or 24 percent. It’s devastating.”
What Recruiters Are Saying
“Coronavirus has presented a significant challenge to all of our clients,” said Eric Frickel, leader of the private equity search practice at New Providence, NJ-based executive search firm BrainWorks. “Some have been impacted much more than others and cash flow is really tight and will continue to be through Q3 in our view given soft top line and extended payment terms that companies are all seeing. We are trying to do our part by helping them through these challenging times.”
Executive Recruiters Roll Up Their Sleeves as COVID-19 Crisis Unfolds
The COVID-19 pandemic has had an impact on every business sector, executive recruiting included. Kenneth Vancini of Innova International brings us the latest thinking after convening recent conference calls with 23 leaders from search firms across the country. Also, we have the initial results from the latest Hunt Scanlon Media ‘Pulse Survey’ of leading U.S. recruiters. It’s a full docket!
“While headcount is not a top priority right now, we feel it is critical that leadership teams keep abreast of talent management as there is a lot of consensus that the swing from playing defense to offense is going to happen extremely quickly,” he said. “Companies thinking ahead and innovating during this crisis while keeping a cool and calm outlook are going to come out on the other side in a sustainable position.” Leadership, he added, is critical in these situations and “true leaders are going to emerge.”
“One thing is clear, even once we’re through this crisis, we can’t go back to business as usual,” said Brett Stephens, CEO of RSR Partners. “We believe that the economy will restart gradually beginning in the third quarter. Some industries will fare better than others. Once organizations begin to focus on hiring again, we anticipate a surge in business. Companies will need to resume their businesses, as well as adjust to virtual and cultural challenges presented by the new normal.”
Organizations of every stripe, he said, “will need strong, resilient leadership during this time of change. We’ve been reminded of how much we all depend upon the relationships with our family, our friends, our colleagues, and our community. We need to remember what worked during this pandemic and use it to bring in a new era of sharing responsibility and collectivism, creating cultures that unlock the collective ingenuity of all employees, and discovering innovative ways to improve productivity while maintaining a better quality of life.”
“The oft-discussed ‘flattening the curve’ is occurring for many states,” said Joanne Rencher, founder and principal at WGNinHR. “This suggests that we should be turning the corner in 30 to 45 days. Search firms can’t wait for that to occur. They should be discussing readiness with clients now. Search firms need to explain to clients that putting searches on hold is unwise, as it means starting from ground zero when clients could be well ahead of the competition,” she said. “This is also the time to be connecting with top talent to engage them in conversations about prospective opportunities.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media