Before the Covid-19 pandemic, the rate of competition for talented individuals is low. However, the Covid-19 panic has affected every sector in the job market. That leads to a shortage of good talents for companies and organizations to employ. This makes experts conclude that we are back to an employer’s market. A closer look at facts and data, as well as experience of recruiting executives shows we are in an intricate situation. Moving towards an employer’s market will make companies miss out on talent. Companies are desperately in need to increase their revenues and their overall performance.
Here are some of the major impacts of COVID to the current job market.
Rise In the Rate of Unemployment
The rate of unemployment rises from 3.5% to 14.7% between February to April. The increase occurs more in the first two months of the Covid-19 pandemic than within the first two years of the recession period. Since unemployment surpassed the 9% percent mark in April 2009, it took as long as two years 6 months to bring the unemployment rate to the initial nine percent rate. In comparison, the rate of unemployment this year went below 9% within just four months.
As a result of the fear of being exposed to Covid-19, most people end up exposing close ones to the virus. As a result, most job roles that require the on-site presence of the employee went unfilled. This led several employers and companies to increase the pay of their workers. This signifies that we are in an employer’s market.
Most individuals moving from one place to another is a result of the Covid factors and economic support. They are hoping to get from family rather than the attractiveness of the job markets. Most executive search firms noticed that this claim is mostly true especially for senior roles. Thus, this is a bad development for employers.
Increased Rate of Job Openings
This is one of the most important factors, in 2001 and 2008, there is a quick decrease of job openings dropping below 4 million and continued sinking for several months. In comparison, in June 2020 it is observed that there is an increase in job positions from about 5.9 million to 6.6 million job positions in July. These stats double the average of 2009 and there are more job openings this year compared to any other year from the time of collecting this data (i.e: 2000 until 2020).
Several companies will find specific conditions in their local labor market and industry and will find it very helpful to determine how to adjust their strategies of hiring talents to the impact of Covid, which differs from following general trends.
Significant changes in the job market have led the unemployment rates of industries to differ greatly. Factors such as educational level, specific skills, geography, and several others. For example, the average hires-per-job-opening increased from 2.5 to 6.6 between 2007 and 2009 in the construction sector. Similarly, in the business industry, there was an increase from 1.2 to 1.6 in the same year.
Don’t infer the high rate of unemployment as a sign that you are being irrelevant in the search for talented individuals. Simply take time to study and comprehend the worth of the right talent to your company.
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