When a balloon is squeezed, one part swells as air is pushed in that direction, while the other part contracts as air is forced out. That’s sort of what’s happening in the job market right now.
After record-setting unemployment in March and April, hiring has picked up in recent weeks for some industries and positions, while others are adding back positions at a much slower rate, if at all. Data and anecdotal evidence show that tech, healthcare, financial services, and the consumer packaged goods industries are all hiring, for instance, but retail, apparel, hospitality, hotels, and academic institutions are not.
Benjamin Frost, a solutions architect in Korn Ferry’s Products practice, says the hiring pattern is consistent not only with the relative impact of COVID-19 in each industry but also with overall job market dynamics before the pandemic. “There’s been a stable and relentless trend in the demand of knowledge workers since the last recession,” says Frost. “Positions that need highly skilled talent still need to be filled.”
To be sure, the industries that are hiring back people more rapidly reflect data from a recent Korn Ferry survey that shows leaders in those sectors expect a small impact from the pandemic. For instance, 41% of high-tech industry leaders say they expect a decline of less than 15%, and in some cases as much as a 10% gain, to annual revenue this year. A similar percentage of healthcare and financial services leaders feel the same way. Conversely, a majority of leisure, hospitality, and both essential and nonessential retail leaders expect a revenue decline this year between 15% and more than 50%.
But it isn’t all good news for workers, even in industries that are hiring back. Scott Macfarlane, senior client partner and global account leader for Korn Ferry’s Financial Services practice, says while there is conservative optimism in the job market, organizations are moving slower than they normally would in a recovery because of the uncertainty around a second wave of the virus. “Some industries are out of complete hiring-freeze mode, but leaders are still looking to redeploy existing talent first,” says Macfarlane.
Moreover, that mindset shift is likely to stay whether or not a second wave materializes. The swiftness of the crisis, says Macfarlane, broke the myth that talent needs a certain level of experience to perform successfully. Rather, it showed that talent with learning agility can be deployed and succeed in positions that normally would’ve been filled through hiring. “That type of utilization of internal people isn’t done in a traditional economic crisis, and it has instilled a greater willingness in leaders to retrain before hiring,” Macfarlane says.
Korn Ferry survey data bears that out: 27% of respondents say that after the crisis, they will increase retraining and reskilling of existing staff with available capacity, while only 18% say they will seek to recruit new talent. As a result, Macfarlane says organizations don’t expect to get back to precrisis hiring activity again until at least the new year. Considering the pace of precrisis hiring and the more than 30 million people who were laid off over the course of two months, Macfarlane says that is still a pretty bullish outlook. “It may seem like a slow ramp, but it’s only two-and-a-half quarters,” he says.