The last five years has seen the US staffing sector steadily growing by 2-3% each year, with the 2019 market valued at $151.8bn. The COVID-19 crisis has impacted the world economy and whilst there are many admirable government initiatives put into place, such as the $2trillion CARES act, the latest projections from Statista suggest that we could see a decline of up to 21% for 2020 taking us back down to 2013 figures.
March saw a record breaking number of unemployment claims, with California, New York and Florida seeing unprecedented levels of applications and as no surprise, an overall increase in unemployment from 3.5% in Dec 2019 to 4.4% in March, back to levels last seen in 2017.
The obvious reality is that the Leisure and Hospitality sectors have been hit the hardest, with lockdown measures closing many businesses and reducing the opportunity to continue services. Data from the Bureau of Labour Statistics suggest that a whopping 459,000 leisure and hospitality workers lost their jobs in only one month. Whilst the Leisure industry leads the way on jobs at risk, the staffing & employment services sector comes in second, followed by transportation, mining and travel arrangements. Taking into account the geographic clusters of the highest risk industries, we could see states like Texas and New Jersey experiencing a proportionally higher impact than other locations.
Whilst these are concerning figures, the public sentiment suggests that this will be a short term economic slowdown rather than a full blown depression. And what does this mean for the staffing sector? Projections suggest the market returning to the $136bn mark for 2021 and therefore the businesses that adapt and survive will be in a position to take competitive advantage in what is likely to be a changing world of employment.
Recruiters have a serious part to play in the post COVID-19 world. With unemployment rates forecast to drop by the end of the year, the staffing sector will be pivotal in not only mobilising the US workforce again, but also in offering a serious hand in helping clients to adjust to the new nature of recruiting, from the adoption of new technologies such as video interviewing and virtual onboarding, to embracing flexible and remote workforces.
Recruiters working in sectors that are seeing increased demand such as healthcare, pharma and life sciences are likely to have had to make serious and rapid changes to the way they work to help support the fight against the virus. But whilst many healthcare workers are employed in the frontline response to COVID-19, many other areas such as primary care, dentistry or those viewed as more luxury services are seeing a decline as the focus shifts solely to emergency services. This being said, these areas are likely to resume normal functioning rapidly as lockdown eases. Long term, we hope to see these markets expand as the crisis highlights the underwhelming level of current investment, and the focus shifts to advancements in healthcare technology and increasing staffing levels for the future.
For other sectors, whilst pipelines may have slowed to agonising stops, the adaptability of these businesses will see them through these challenging times. Whether diversifying specialities and digging in where necessary, to embracing virtual interviewing and onboarding or getting creative commercially to support their clients where necessary, these businesses will be best prepared to pick up and increase their market share once lockdown measures ease.
The sad reality is that this represents the end of the line for businesses too slow or resistant to embrace change, and brands that have failed to look after employees during the time of crisis. As we come out of this on the other side with a new found sense of community, clients, candidates and employees will be looking back on the relationships, both business and personal that helped support them through this period of time.
Long story short, brace yourself, the nature of employment and the staffing sector has changed forever and when the recovery happens it will be in a very different world to the one we left behind.