Having been in the recruiting business for 25 years, I’ve seen quite a few trends from economic bubbles to downturns that dried up business overnight. Specifically, I can vividly remember the crash of 2008 and the stark month-to-month contrast between September 2008 and October 2008. Since the crash happened at the end of September, we were coming off a solid month and expecting great things that autumn. Still, within 48-hours, with the phones and emails going dead overnight, we knew right away that October and the months following would be completely different, and everyone seemed to be in a state of shock for quite a while.
Recovery in our business took a good 24 – 30 months following the 2008 crash. Up until the Pandemic, aside from a few hiccups along the way, growth was steady. We experienced year over year growth. The past 12 years have been a fantastic run but ended abruptly with the Pandemic. The Pandemic, in comparison to 2008, felt very different from the beginning and still does. However, we are finding some employers acting like it’s similar to 2008, and some candidates subsequently feeling like the market has dramatically become unbalanced in the Employer’s favor. It hasn’t, and here’s why.
Unlike 2008 which resulted from poorly related financial markets, in 2020, unemployment is forced:
In February, unemployment was near a record low 3.5%, and due to the shutdown was pushed up to 14.7% in April. The unemployment rate in the United States was 7.9% in September. That’s quite a rebound. Overall, the sectors that have been hardest hit are those that require face-to-face interaction; others have either adapted to a remote working environment or a hybrid model of work from home part-time and work from the office or workplace part-time. Unfortunately, due to the Pandemic, some face-to-face businesses may not come back to the way they used to be with products and services moving to an online model. Some of these sectors were going in that direction regardless. Other more mandatory hands-on roles that can’t be transferred to an online environment are still struggling, and there is no way around it until COVID is under control.
What we are finding from the Employer side and what we are seeing from the candidate side:
Some employers get it; some don’t:
Some employers realize that this is still a market where they need to vie for top talent. In fact, this is an opportunity to stand out and attract star talent who have become available in the market. High performing candidates have been affected and unexpectedly loosened from their current role due to regional issues, being in industries most affected, such as leisure and hospitality, and sectors that were already feeling the effects of disruption.
Other employers are acting very post 2008 market crash even though a good chunk of the market has already bounced back and will return Post-Pandemic. Some examples of 2008 behavior are lowballing offers to candidates recently unemployed, unwillingness to provide relocation assistance, and renegotiating contracts more weighted in their favor. This is happening in industries we know aren’t as affected as others, with some sectors seeing increased demand since the Pandemic.
As much as COVID is continuing to disrupt the economy, not seeing the opportunity to continue to search for top talent is short-term thinking. Strategic thinking always wins in the end. While many companies have had to cut back, which is prudent, being selective about how you do so is critical. The best organizations are continuing to hire top talent selectively. Many candidates who may not have considered moving outside of their current role may now be forced to do so. So, there is talent on the market that was unavailable until the Pandemic. It is unlikely that this window will stay open for two to three years, like 2008.
Some candidate’s get it, some don’t:
On the candidate side, the uncertainty is weighing on their decisions heavily. In short, not knowing when the crisis will be over makes it difficult for them to decide whether to stay or move to another opportunity. We were recently working with a candidate to whom we presented an opportunity that provided a significant increase in pay, responsibility, and autonomy. He struggled with the decision because he didn’t want to risk moving to a company he didn’t know despite all the signs being positive. It was a basic ‘the devil you know’ decision amid widespread uncertainty; in short, he gave in to fear and missed out on a great opportunity.
Other candidates are seeing this as an opportunity for change. Of course, they are more careful than ever in their selection of their next Employer, but the best talent tends to see the benefit of working for a company that is showing strength to continue to grow during a brutal downturn. Companies that are willing and able to invest in talent during economic downturns have demonstrated extraordinary resilience and tend to come out of hardships stronger than ever.
The damage and difficulty caused by this Pandemic should not be understated. These are indeed challenging times. The pull toward short-term thinking and reacting in fear of an uncertain future is vital. However, this is a lot different from previous downturns, particularly 2008, where bounce back took a few years, and measures needed to be put in place to prevent financial markets from imploding in the future. Employers must not miss the boat on the opportunity to pick up high performing talent. This is an opening for strategic thinking employers to gather the best talent before the first light appears. It’s easy to forget that it’s always darkest before the dawn. For job seekers, keep looking for that unique opportunity and be diligent in your search; some excellent employers are looking for your talent to help them grow and add you on as a crucial part of their team.