January has historically been a great time to seek out a new job. The holidays are over, people are back at work, reality sets in, budgets and “headcounts” are approved. The hiring cycle starts up again after a traditionally soft Thanksgivings Day through New Year’s holiday season. In our Covid-19-dominated world, it looks like the tried-and-true traditions of the past have been broken.
The Wall Street Journal has bluntly reported, “The number of help-wanted ads increased more slowly in December, evidence the labor market is losing momentum amid rising coronavirus cases.” Indeed, the ubiquitous, dominant job aggregation site, wrote on its blog, “The trend in job postings was 10.6% lower than in 2019 as of Dec. 31, as slow improvement continued.”
The data from Indeed reflects that there was some optimism evidenced by increased job postings, but it soon faded when the disease raged again and business closures, curfews and restrictions were announced. With fewer jobs available, the big issue is how we can get people back to work.
Back in December, we received a gut-punch, wake-up call. The last job report of 2020 was disturbing, as 140,000 jobs were lost. There were high hopes that the job market would pick up, but it didn’t. Instead, the job losses were a grim reminder that the Covid-19 pandemic is in control of the health of the economy and job market.
The December jobs report signaled the abrupt end to a seven-month stretch of positive job growth. The sobering reality is that after about 10 months, the United States has only regained roughly a little over half of the 22 million jobs lost since the onset of the outbreak. These government figures exclude the millions of Americans who have simply given up looking for work, as they couldn’t find a suitable position. To add insult to injury, “A report from executive outplacement and coaching firm Challenger, Gray & Christmas found that planned job cuts rose nearly 20% in December on a monthly basis. The roughly 77,000 jobs companies announced plans to shed is 135% higher than a year ago.”
The Department of Labor said in its report, “The decline in payroll employment reflects the recent increase in [Covid-19] cases and efforts to contain the pandemic.” In the wake of a rapid resurgence of Covid-19, the attendant lockdowns hurt job growth and led to job losses.
Daniel Zhao, senior economist at Glassdoor, a company-rating and job-aggregation site, said at the time of the job data, “Today’s report is a harsh reminder that the pandemic controls our economic trajectory.” Zhao added, “Though the end-of-year relief bill offered temporary reprieve and the start of vaccine distribution offers light at the end of the tunnel, we’re not out of the woods yet.”
Job openings fell 2% in Nov to 6.5 million, according to #JOLTS.
This still leaves us 4% down YoY as the pandemic worsens and employer demand slows.
Open jobs have rebounded faster than after the GR, but have stagnated since then.
— Daniel Zhao (@DanielBZhao) January 12, 2021
According to Indeed, which also mirrors the statistics from the Labor Department, “Job postings have fallen most in occupations directly affected by the coronavirus such as hospitality and tourism, sports and arts and entertainment. Hospitality and tourism postings are down 47%. Postings are below last year’s trend in many higher-wage office sectors, too, like software development and banking & finance.”
Even though job losses have been worse in lower-wage industries, job openings (per JOLTS) are way down in two higher-wage sectors: Information and Financial Services. https://t.co/V2lAytrlQh
— Jed Kolko (@JedKolko) January 12, 2021
Although the numbers look bleak, there is hope on the horizon. The vast majority of the job losses in December were in the hospitality, restaurant, travel, hotels, airlines, resorts and related sectors. These industries are highly vulnerable to the disease. It makes sense that you wouldn’t see job growth and would notice layoffs and furloughs at restaurants and hotels.
It’s also understandable that white-collar professionals find fewer online job postings and have experienced downsizings. Corporate managers hate uncertainty. They’re afraid when the future looks dark and foreboding. It’s too easy for them to hold off on hiring or making any decisions during tough times.
Conversely, when the future looks rosy, the same managers will aggressively hire to get the best and brightest candidates before their competition. What we are seeing now is the reticence of corporations to hire people, as they’re concerned the virus will linger on. They’ll continue to downsize people, in an effort to cut costs and save money—just in case the disease continues on for months to come.
It boils down to this: the virus is dictating the actions of companies, causing hiring freezes and layoffs. We have every reason to believe that this trend will continue until the U.S. and the rest of the world gets a handle on stopping the spread.
The hope is that once the vaccines are distributed and shots given—without any frightening side effects—the wheels of interviewing and hiring will start in motion. Job listings will be posted. We’ll see less layoff announcements. The hardest-hit sectors, such as travel, restaurants and leisure activities, should see a big bounce back, once people start feeling confident that vaccines work and they won’t contract the disease if they go to a concert, food establishment or gym.
This won’t occur overnight, but it will happen given some time. In the meanwhile, we all need to be brave, strong and optimistically wait for things to turn around in our favor, which it ultimately will.