The impact of COVID-19 on employment and the staffing sector - 6 months on
It’s six months on from our article on ‘The impact of COVID-19 on employment and the staffing sector’ and what a six months it’s been. The last seven days has seen Joe Biden become President Elect, along with the news that a potentially 90% effective COVID-19 vaccine has been developed. It seems 2020 is determined to go out with a bang!
A brighter outlook
At the start of the COVID crisis there were some startling projections, though it’s worth noting that the overall sentiment was that this represented a short-term economic down-turn rather than a full-blown depression, and looking at the figures and the news of a vaccine in the near future, I would echo this positivity.
The staffing sector has grown steadily to impressive $152bn prior to COVID, but the immediate impact of measures to control the pandemic, has seen a 21% decrease to $119bn in line with the predictions we saw in April, to the lowest levels since 2013.
A steady recovery
This being said, an increase in economic activity over the last few months is now starting to show some serious movement in October. The Bureau of Labor Statistics has reported the biggest jumps in employment and recovery since the pandemic started.
In October, the number of payroll employees rose by 638,000 and we saw the unemployment rate decline by 1% to 6.9% (11.1 million people). Whilst we’ve seen the unemployment rate steadily declining since Aprils highest increase in BLS reporting history (14.7% - with records going back to 1948) the rate is still nearly double that of February 2020 (3.5% & 5.8 million people). Though further positive news shows there is finally a decline in unemployment figures for 16-19 year olds, after reaching a peak in September, which is encouraging given the severe impact on this age group at the start of the pandemic.
An appetite to hire in the hardest hit sectors.
The largest job gains for October were seen in the Leisure & Hospitality sectors (271,000 more jobs), Profession & Business Services (208,000), Retail (104,000), Construction (88,000) and Healthcare (79,000). This hopefully reflects an appetite to hire and adapt to the new circumstances we are working in. The reduction in the number of employees teleworking due the pandemic (down to 21.2%) and number of people unable to work due to employer closure/lost business (from 19million in Sept to 15 million in Oct) suggests a steady and positive stimulation of the economy and mobilization of the workforce.
All of this is overwhelmingly positive news for the Staffing sector as a whole and we hope to see a sharp recovery in 2021. But beyond facts and figures, the general sentiment in the staffing sector has been one of positivity. Firms have had to adapt quickly and we have seen the best of sector stepping forward. From the service to clients and candidates, to employee engagement and wellbeing, the staffing sector has embraced change for the better.
Matt Newman - Managing Director of Cavana Search suggests:
“From our perspective the last couple of months have been very busy. We have seen an increase in staffing clients hiring for recruiters in areas like engineering, I.T., & legal (as well as existing hiring in healthcare & life sciences) and demand for senior recruits in leadership roles.
Speaking to clients everyday there is a lot of positivity in the market throughout the United States. Businesses are hiring key people to help them achieve the growth ambitions they have for 2021 and beyond.
Before lockdown I hadn’t placed a single candidate that hadn’t physically met my client and visited their office before accepting a new role. This has now become the norm for nearly all vacancies and is no longer a barrier at all to hiring for candidates or clients.
I expect the positive signs we have seen in the market will now continue into Q1 as there is a feel good factor from Joe Biden’s election and the improved likelihood of a vaccine for Covid on the horizon”
This, alongside the results from a pre-election poll conducted by Cavana, where 55% suggested that Biden winning would be better for the staffing sector, indicates we should be looking at a very bright future for staffing in 2021.