Massive Unemployment Ahead? Or Is This The Big Reset?
We are living in one of the most disruptive times in the last decade. This week we saw more than 6 million people file for unemployment (bringing the total to some 10 million), yet a handful of companies are hiring as fast as possible. Through a partnership with Emsi, a leader in labor market analytics, we wanted to give you some important insights:
Rob Sentz, EMSI:
COVID-19 and the ensuing lockdown is rewriting the US labor market. Job postings dropped considerably in March. The decline accelerated to -32% just last week, compared to the average weekly for both January and February 2020. Many employers are forced to let people go and many more are in a hiring freeze.
But, like you said, others are scrambling to fill thousands of critical new positions. (See companies that are mass hiring, like Amazon, Walmart, 7-Eleven, Walgreens, and Pizza Hut.) So far, we see some correlating trends in job postings, but we also notice a few curveballs.
To help, we just launched this new job posting dashboard. Here are a few observations:
First, there is a little good news. Not surprisingly, online shopping (+75% growth in March compared to January and February) has seen the biggest spike in job postings as online retailers (Amazon, eBay, Etsy) race to hire extra talent to handle the tsunami of stay-at-home shoppers.
The increase in postings for insurance carriers (+27%) is likely due to the times. During economic upheaval, financial jobs can be in high demand. Personal financial advisors, for example, grew faster than any other job during the recession.
People also apparently flocked to hardware stores (+21%) to snag materials for those home-improvement projects, and stocking up on everyday goods at department stores.
And what about truck transportation? Shouldn’t we see truck drivers among the occupations with increased postings? Oddly enough, as you can see in the full chart further down, job postings for truck drivers—some of the unsung heroes of the pandemic— actually decreased (-23%) in March, even as many drivers are working 24 hours straight to deliver goods to stores and families. Are we surprised to see a decline in postings then? Well, a bit, but the trucking industry is tricky anyway from a posting point of view and tends to over-post.
It’s not at all surprising that online shopping is skyrocketing in demand. Most of us are now buying almost everything online, and often hiring services like Instacart and others to deliver it. It’s also clear that hardware stores (purchasing supplies and home tools), nurseries (most of us are gardening at home now, it is Spring), public agencies (lots of unemployment cases to process), and insurance providers (people are clearly more risk-averse than ever).
The question I’d ask is “are these permanent trends?” We certainly don’t know yet, but I know many of my friends and neighbors are telling me “we’re getting bored at home so we’re finding new things to do.” That includes baking bread (a huge spike in the San Francisco area), gardening (I see all my neighbors out in the yard), and fixing things at home (both my neighbors on both sides seem to be hammering and sawing for some project).
As far as e-commerce goes, we are pushing the needle forward. Research shows that prior to the crisis about 12% of all retail was done online. I’d guess that today’s trend will push this up higher, encouraging companies to build even better online shopping experiences, better delivery experiences, and new types of products online. Online entertainment is skyrocketing (streaming services) and gaming companies cannot hire people fast enough.
Think also about delivery services. Instacart now has 300,000 jobs open and I would expect drone manufacturers to explode with growth. Remember that crazy idea Amazon had to deliver packages by drone? It now makes a lot of sense. And it’s branded Amazon Prime Air.
New daily data on mobility from Google (Mobility Reports) shows that travel to retail and recreation has dropped by 47%, grocery and pharmacy by 22%, parks by 19%, transit stations by 51%, and workplaces by 38%. Where are we going? Home. Residential location (mobilty at home) is up 12%. Which means neighborhoods are back. (You can download the mobility report here.)
Along those lines, I just had an interview with the head of HR for Nextdoor, the website that brings neighborhoods together. He told me that there has been an exponential growth in neighborhood groups sharing food, offering to take others to the store, and just helping each other. Maybe we are finally getting back to the culture that made the US great in the 1960s – neighbors spending time at home together. There is some silver lining in all this.
That is a great point. Yeah, being in lockdown surely shifts our behaviors and our buying patterns are reflecting that. And I love hearing how people in your neighborhood are helping each other. As this continues, my major concern is the longer-term ripple effect if we cannot find some stability over the next month or so. Case in point, here are the industries that are hit hard.
Industries with the greatest decrease in postings
As life and travel grind to a halt, we’re not surprised to see a massive slowdown in job postings for industries that move: cruise liners, commercial airlines, car dealerships, aircraft equipment manufacturing, etc. Hotels and resorts are also going into hibernation.
It’s no surprise that hotel, resort, and cruise jobs are in decline – we can expect this to be temporary but it may take time for people to feel comfortable in these types of leisure activities again. It’s also not surprising that card dealerships, airlines, and real estate companies are slowing down. And this may be a big long term trend.
And I believe the shift to remote work will be longlasting. Nearly every large company I interview tells me that “remote work” has become one of their biggest strategies going forward, despite the fact that more than 50% of companies have no remote-work policy. This means companies will be thinking “maybe we don’t need so much real-estate any more.” It could be bad news for commercial real estate owners over the long term.
The surprising finding to me is that “administration of economic and environmental” programs has dropped. While this is probably a small number of jobs, I’d imagine this is a shift toward immediate response issues for Coronavirus and away from longer-term government positions.
I hear you on the remote work. We just took a closer look at that (see here) and found that many remote jobs are centered in our urban areas, that many of them are related to health care, teaching, product development, and sales, and there are a large number of companies that are advertising for “remote only” jobs these days. As things settle down and people, who have lost jobs in non-remote work, look for new opportunities, I think a lot of them will be seeking these remote jobs.
Next I want to show you a few jobs that actually saw a lot of job postings in March.
Occupations with increasing postings
There is an acute need for translators and interpreters as hospitals serve non-English-speaking patients. It is also interesting to note that with so many news conferences and media attention, there is almost always someone doing sign-language or interpretation. Communication roles seem big right now.
Freight and stock-moving workers (+23%) are in increasing demand as companies like Amazon hustle to deliver goods that people would otherwise being going to the local store to get. Indeed, the pandemic just might be a boon for trade and logistics workers as a whole, although it is understandable that many of them would prefer to stay out of the way of the virus.
It’s also interesting to note that demand for photographers, film editors, and AV techs went up. One of the big impacts of the coronavirus has been the unrelenting 24/7 news cycle, with intense need for people to get out and cover story after story. Such times are boom times for the news and other organizations that need to collect lots of content for their stories.
Finally, there was also a lot of demand for emergency response supervisors. That should come as no surprise.
All makes perfect sense to me. I think it’s interesting that sales jobs are on the upswing. I see this in my personal life: every company wants to “reach out” to new customers, people in distress, and people who need new tools. In the HR Tech market there has been a huge flurry of interest in new online work, learning, collaboration, and scheduling tools. So all these vendors are hiring salespeople like crazy.
I also found it interesting that photographers are in demand. I guess now is the time to chronicle one of the most frightening and also fascinating times in our lives.
Occupations with decreasing postings
Just like we saw with travel and luxury transportation industries, tour guides and baggage porters, bellhops, and concierges are also publishing fewer postings as millions of Americans discover what staycation is all about.
The decline in postings for oil & gas reflects a genuine slump in demand for oil & gas workers. Low oil prices and COVID-19 together are acting as a “double whammy” for the oil & gas workforce, and many companies are proceeding with temporary layoffs.
Teachers and tutors are naturally seeing lower demand as schools close shop all over the country.
These decreases are all vital “personal” services that require people to be physically close to their customers and clients. And many of these are “optional” service that can be deferred when money is tight.
It’s a bit baffling where Funeral workers are going, but it makes sense because it’s now illegal to have more than ten people at a funeral.
The somewhat disappointing data here is how many teachers, tutors, and teaching assistants have been reduced. One could imagine that the demand for these people is skyrocketing, as children come home and want help online. Apparently one reason for this is that the Teacher’s Unions in many states prevent and inhibit online teaching. While I’m not an expert in this area, it occurs to me that perhaps this is the straw that will break the union’s back. Teachers must be empowered to teach online: it works well and it’s one of the best ways to leverage a teacher’s essential skills and knowledge to more students in an efficient way.
Bottom Line from Josh:
These shifts are important to consider for several reasons.
If you’re an employer, you may be laying people off at a rapid rate but you should really work hard to “point your staff” toward jobs that can quickly be obtained. Remember, as the aerospace industry has learned, roughly 20% of the people you lay off will vow never to work for your company again. So layoffs create significant damage to your long term brand.
This week Verizon, ServiceNow, Lincoln Financial Group, and Accenture introduced a b2b a “job shift network” to help employers move people from industry to industry. This marketplace intends to help companies match newly available talent to companies that need them, based on criteria such as zip/postal code, skills, qualifications, etc. This platform will be made available at no cost to private sector businesses, by invitation.
People who work in airlines, ships, hospitality, and travel, for example, could easily take jobs in healthcare, transportation, or other similar “hospitality-like” industries.
The second thing to consider is “how much of this is permanent?” While I personally believe restaurants, airlines, hotels, and vacations will roar back to life as the virus fades, there will be a fundamental shift toward more digital services and entertainment. One of my colleagues is the CHRO of the NBA and he shared recently that the NBA is seriously now thinking of offering a digital entertainment service.
One of my associates is a pioneer in online gaming. He told us last week that all the game companies are hiring as fast as they can. VR-based phones and devices are coming, so this economic shift may push demand for new and better online entertainment.
And online life is getting much better. We are enjoying video-based piano lessons, book groups, yoga classes, and even family dinners. I believe much of this will continue in the future, perhaps pushing our entire “digital transformation of life” to a new and perhaps ever-more exciting level. (Sitting down with Zoom for dinner may become common.)
One more thing about unemployment.
The job market is not like a cup of water that goes up and down. Rather it is like a stream with water always entering and always leaving. This week, as 6.3 million people filed for unemployment, EMSI data shows that there are about 7 million jobs are open. So while GDP and profits are clearly dropping, jobs are being created. The big question is how quickly we can help people move from their old job to a new one. And this is where we come in.
As someone who was laid off in the 2000 recession, I give everyone one piece of advice. The most important gift in times like this is hope. As an HR or business leader (or friend), let’s do everything we can to help people find the new job they need and evolve to the changing economy ahead. We’re at an uncertain time, but some of the trends are clear.
I will be working with EMSI to publish articles like this as often as we can. I want to thank Rob Sentz and the entire EMSI team for their important work collecting, analyzing, and publishing some of the most important data we need right now.