A reader asks what will be different in the job market in the June 30, 2020 Ask The Headhunter Newsletter.
The coronavirus pandemic is a game-changer for the job market. What changes do you see coming in the new normal? Any tips on how to be one of those who can get a job again as things open back up?
This could be a long discussion! I’ll try to stick to a few points that I think I’ll be able to defend when the discussion starts in the comments section below. I can’t offer much evidence yet, but my gut tells me employers will be more selective when hiring going forward, so you will have to adjust your job-search methods accordingly.
Selective hiring in post-pandemic job market
Over 40 million people have lost their jobs and filed for unemployment since the pandemic began. That’s a lot of jobs. I don’t think it’s hard to predict that when employers start hiring again they will re-fill only a portion of them.
It seems Federal Reserve chairman Jerome Powell agrees. He recently told a gathering of bankers there will be “well into the millions of people who don’t get to go back to their old job. In fact, there may not be a job in that industry for them for some time.”
Employers will have to be more selective simply because they won’t be able to hire as many workers. The reason is elementary: In the post-pandemic job market, companies will have to save money, many of them without choice.
Managers will do their own recruiting
Wharton labor researcher Peter Cappelli has pointed out that modern corporate accounting systems treat vacant jobs as a reduction in costs, and thus as an increase in profits. My good buddy Jeff Pierce, an executive in the IT services industry, calls this “junk profitability.” I think he’s right.
UPDATE: The Economic Policy Institute reported on June 29, 2020 that Nearly 11% of the workforce is out of work with zero chance of getting called back to a prior job.
“Of the 164.8 million workers who are either in the labor force or who have dropped out of the labor force as a result of the virus, 11.9 million workers, or 7.2%, are out of work with no hope of being called back to a prior job; 5.7 million workers, or 3.5%, expect to get called back to work but likely will not; and 14.8 million workers, or 9.0%, may reasonably expect to be called back. In other words, even if all workers who can reasonably expect to be called back to their prior jobs were called back, the share of the workforce out of work would still be 10.7% (7.2% plus 3.5%), higher than the highest unemployment rate of the Great Recession.”
As businesses try to recover, I believe they will spend less on staffing. But managers will likely face the same, if not higher, productivity expectations. Managers will have to operate on lower staffing levels, and this will force them to step up to the challenge by hiring more carefully.
I think the best managers will handle more recruiting on their own because they know HR has no skin in the game. Fed up with HR organizations that have always shoveled the wrong candidates into interviews, managers will rebel. They will take hiring into their own hands because not to do so could risk their own jobs.
Job seekers who’ve got game will prosper
Employers will invest their salary budgets prudently and selectively. I believe managers will be much more receptive to job candidates who walk into an interview and demonstrate, hands down, how they will do the work and do it profitably.
In a recent article, Job Search During The Pandemic, Jason Alba suggested that job seekers need to be on their best game: “The pandemic makes it necessary to do more of what we know works best.”
- More finely tuned networking and talking with people that influence who gets hired.
- Knowing what to say to hiring managers and following up meaningfully — not just with thank-you notes.
- Offering objective proof of ability to do profitable work.
Job ROI will matter
The University of Chicago’s Becker Friedman Institute projects that up to 42% of the pandemic-related layoffs in the U.S. will be permanent. If you are a victim of these cuts, how will you position yourself for a new job?
If managers have less money to spend, they will monitor hiring ROI (return on investment) much more closely. Every hire will matter more. This means what you can offer employers in the post-pandemic job market will matter more.
I think this will be a smart employee’s market where the best workers will pursue jobs where they show how they’ll make a difference — and thus be able to negotiate good compensation packages. Job seekers who keep dialing for dollars by playing the numbers game with job applications will lose.
We’ll see if I’m right. Now let’s hear everyone’s comments.
What are your predictions for the post-pandemic job market? How will the massive, pandemic-related job cuts affect your ability to get — or to fill — a job? Will those jobs ever come back? What will make you worth hiring in the new economy and job market?