May 8, 2020 – Employment fell by 20.5 million last month as the U.S. unemployment rate rose to 14.7 percent low, according to the most recent U.S. Bureau of Labor Statistics report released this morning. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. The number of unemployed currently stands at 23.1 million. Over the last seven weeks, 33 million Americans have filed for temporary unemployment benefits.
Economists surveyed by Dow Jones were anticipating payrolls to shed 21.5 million and the unemployment rate to go to 16 percent. For some perspective, April’s unemployment rate topped the post-war record 10.8 percent but was short of the Great Depression high estimated at 24.9 percent. The financial crisis peak was 10 percent in October 2009.
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!
“There’s no comparison to this shock,” Gregory Daco, Oxford’s chief U.S. economist, told The Wall Street Journal. “The sudden drop in economic activity is like what you’d see in an area after a natural disaster or a terrorist attack, but it’s occurring across the entire country.”
Inside the Numbers
- In April, employment in leisure and hospitality plummeted by 7.7 million, or 47 percent. Almost three quarters of the decrease occurred in food services and drinking places (-5.5 million). Employment also fell in the arts, entertainment, and recreation industry (-1.3 million) and in the accommodation industry (-839,000).
- Employment declined by 2.5 million in education and health services in April. In healthcare, employment declined by 1.4 million, led by losses in offices of dentists (-503,000), offices of physicians (-243,000), and offices of other healthcare practitioners (-205,000). Employment also declined in social assistance (-651,000), reflecting job losses in child day care services (-336,000) and individual and family services (-241,000). Employment in private education declined by 457,000 over the month.
- Professional and business services shed 2.1 million jobs in April. Sharp losses occurred in temporary help services (-842,000) and in services to buildings and dwellings (-259,000).
- In April, employment in retail trade declined by 2.1 million. Job losses occurred in clothing and clothing accessories stores (-740,000), motor vehicle and parts dealers (-345,000), miscellaneous store retailers (-264,000), and furniture and home furnishings stores (-209,000). By contrast, the component of general merchandise stores that includes warehouse clubs and supercenters gained 93,000 jobs.
- In April, manufacturing employment dropped by 1.3 million. About two-thirds of the decline was in durable goods manufacturing (-914,000), which saw losses in motor vehicles and parts (-382,000) and in fabricated metal products (-109,000). Nondurable goods manufacturing shed 416,000 jobs.
- Employment in the other services industry declined by 1.3 million in April, with nearly two-thirds of the decline occurring in personal and laundry services (-797,000).
- Government employment dropped by 980,000 in April. Employment in local government was down by 801,000, in part reflecting school closures. Employment also declined in state government education (-176,000).
- Construction employment fell by 975,000 in April, with much of the loss in specialty trade contractors (-691,000). Job losses also occurred in construction of buildings (-206,000).
- Employment fell in transportation and warehousing in April (-584,000). Transit and ground passenger transportation and air transportation lost 185,000 jobs and 141,000 jobs, respectively.
- Wholesale trade shed 363,000 jobs in April, largely reflecting losses in the durable and nondurable goods components.
- Employment in financial activities fell by 262,000 over the month, with the vast majority of the decline occurring in real estate and rental and leasing (-222,000).
- Employment in information fell by 254,000 in April, driven by a decline in motion picture and sound recording industries (-217,000).
- Mining lost 46,000 jobs in April, with most of the decline occurring in support activities for mining (-33,000).
What Executive Recruiters Are Saying
“The downstream effect of COVID-19 will continue to materialize over the coming months, impacting various industries in different ways,” said Brian Moorhouse, founding principal at Mirador Talent Consulting. “Although some industries are feeling an adverse impact quickly, other industries largely considered somewhat recession proof are likely to experience a delayed impact resulting in additional reductions. Industries such as healthcare and life sciences could feel budgetary pressure as elective procedures and access to trial participants across multiple therapeutic areas begin to slow.”
“Over the last couple months, I’ve spoken to many search leaders across a variety of industries,” Mr. Moorhouse said. “The impact of COVID-19 differs greatly from one firm to another. Some firm leaders report a significant slowdown, while others remain busy as new search work is acquired. On one end of the spectrum, there are firms significantly impacted resulting in lay-offs and salary reductions. On the other end, there are firms that recognize an opportunity to invest and grow their presence. Although business will look different coming out of COVID-19, companies will still need great leaders to navigate the future,” he says. “Firms who adapt and successfully navigate these uncertain times will be positioned to help businesses rebuild their leadership talent for the future.”
According to recent research compiled by Hunt Scanlon Media, search leaders are planning for the long game, with many focused on cash preservation and cost containment. One large recruitment provider is said to have downsized considerably while cutting back base compensation for its remaining employees. Others are in the midst of capital calls as they prepare a cushion for what will likely be a soft second quarter. But recruitment leaders, generally, are optimistic that a rebound will begin as early as Q3.
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!
“Over the past eight weeks, we’ve had seven search cancellations and 38 searches placed on indefinite hold due specifically to the uncertainty caused by COVID-19,” said Chad Oakley, CEO of Charles Aris Executive Search. “But we’ve also been pleased to successfully complete 31 searches and initiate 24 new searches during that same span. Hopefully, for the sake of all parties involved, that portion of the trend will continue. We’ve found it easier to connect with prospective candidates, as many have transitioned to a virtual workplace and are now more readily available for career discussions. Simultaneously, the majority of our clients have now moved exclusively to virtual interviewing, with more heading in that direction every day.”
A Nike Swoosh Shaped Recovery
“With the current unemployment claims at 33.5 million, or 20 percent of the U.S. workforce, it is imperative that executive recruiters shift from serving clients to serving those that need us the most, the unemployed,” said Brian Brinkley, chief growth officer of Frederickson Partners. “There is an abundance of smart, talented people in the market and executive recruiters should be using their own networks to connect these individuals to the companies looking for talent, no strings attached.
“We are most likely looking at a 12 to 24 month recovery to approach pre-COVID-19 levels,” he said. “While no one can predict how long this recovery will take, we can do everything possible to lend a helping hand to those that need us the most. Having the ability to invest in talent is the key to your innovation, your next product or service that will be the next market leader.”
“We think we will see a Nike swoosh shaped economic recovery,” said Gary Calega, managing partner at RevelOne. “With high unemployment, and with key verticals like retail, restaurant, and travel impacted until at least the end of the year, even industries not directly hit will take a cautious approach to spending and hiring due to general consumer weakness.”
Tens of millions of households are reeling from lost income and mounting bills, “and a good percentage of the rest are simply hesitant to spend right now on anything but necessities,” he said. “However, as the stay-at-home orders are gradually lifted, and we make progress on a vaccine, testing, and treatment options, consumer optimism will return and should fuel a steady recovery.”
“While we do not know the full extent of the COVID-19 impact, all facets of the economy and society are affected, and companies are being forced to rethink how they operate in the future,” said Clarke Murphy, CEO of Russell Reynolds Associates. “Thus leadership needs are shifting quickly, too.”
“We are already seeing an acceleration of emerging issues – stakeholder capitalism, digital capabilities, supply chain efficiencies – occurring,” Mr. Murphy said. “What will it take for leaders to be successful moving forward? Bravery to make difficult decisions. Authenticity and empathy in their interactions and decision making. Being purpose-driven and in service to societal needs,” he said. “Playing offense and defense simultaneously, and addressing challenges as they arise. And embracing the forced digital acceleration we are all experiencing. If there is one thing the last few months have taught us – we live in a fragile world. Leadership has never been more important.”
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