Another Hiring Crisis? - 2008 market crash vs. 2020 - COVID-19
Having been in the recruiting business for 25 years, I've seen several trends that dried up business overnight, from economic bubbles to downturns. 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, 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, some candidates subsequently feel 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 regulated financial markets, in 2020, unemployment is government-regulated: This is a different kind of hiring crisis.
In February, unemployment was near a record low of 3.5%. The shutdown pushed the rate 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 require face-to-face interaction; others have either adapted to a remote working environment or a hybrid model of work from home. Unfortunately, due to the Pandemic, some face-to-face businesses may not return to how 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. There is no way around it until COVID-19 is under control.
What we are finding from the Employer side and what we are seeing from the candidate side:
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 roles due to regional issues, being in industries most affected, such as leisure and hospitality, and sectors 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 recently unemployed candidates, 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.
The impact of COVID-19 will depend heavily on how long the pandemic lasts. 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. So, talent in the market was unavailable until the pandemic. It is unlikely that this window will stay open for two to three years, like in 2008.
Some candidates get it; some don't:
On the candidate side, uncertainty is heavily weighing on their decisions. 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 recently worked with a candidate to whom we presented an opportunity that significantly increased pay, responsibility, and autonomy.
He struggled with the decision because, despite all the positive signs, he didn't want to risk moving to a company he didn't know. 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 selecting 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 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. This is not just another hiring crisis.
Employers must not miss 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. Job seekers should keep looking for that unique opportunity and be diligent in their search; some excellent employers are looking for your talent to help them grow.
