With the COVID provoked economic shutdown, companies have hunkered down, reduced expenses or outright closed operations. The result? The biggest jump in unemployment in history with a real rate of unemployment calculated by some experts to have reached in excess of 20%, rivaling the Great Depression. But these are times unlike others. As the curve flattens and states fully reopen, there will be an unprecedented surge in hiring and a rush to the best talent. Are you prepared for the Great Rehire?
The Impending Free Agent Workforce
It’s a little messy out there right now. People feel like the world has been picked up, shaken, and set back down in a different arrangement. Things have been rattled – both structurally and mentally.
From an employment standpoint alone, the fallout from this virtual earthquake is still being sorted out, but there are new realities already in place. Unemployment is still exceptionally high, trying to recover from the largest spike in unemployment in history. While we are seeing some reductions in unemployment (down 1.4% this month to 13.3%) many experts believe the real unemployment number is much higher, hovering around 20%, putting it within arms-reach of the Great Depression.
But this is not the Great Depression. And this is unlike any recession we have had before. It cannot be judged by the same rules and expectations. This recession is changing not only how people are employed, but how people view their jobs. Different groups of people are reacting differently.
There are those who have been permanently laid off, who are desperate for jobs as they attempt to figure out how to pay bills. Some of this group has had their anxiousness temporarily offset by government assistance which has helped ease the burden of lost wages.
Then there is the group of employees who have been furloughed. This is an especially interesting group because it speaks to the shift of the mentality of the employee. Represented by 18 million Americans who have temporarily been laid off, these employees have been given a loose promise to be hired back once revenue supports the rehiring. They have been able to retain benefits, including health insurance, but they feel set aside by their companies and are disenchanted with the organizations that have furloughed them. Most of the surveys I’ve seen demonstrate low percentages of people who believe they will return to work for the companies that have furloughed them, some as shockingly low as 2%. Our own survey indicated that only 15% of those respondents who are furloughed are likely to stay with their current employer. In speaking with them, there is a feeling of betrayal. That the employees had greater expectations from the relationships with their companies and have been let down. There is a feeling of being disposable when before they believed they held value.
Those that have retained their jobs are a mixed bag. Some are extremely loyal to their companies, believing them to have been supportive during a difficult time. Our own survey showed 71% of employees gave their management a passing grade for handling the pandemic with 36% receiving an “A.” But even with employers showing support that would be expected to create loyalty, other factors are influencing the employee. The shutdown has brought about a time for evaluation. As employees shelter at home and work remotely, they have had time to evaluate their careers and plans for the future. Remember, these people have been shaken. Everything around them seems uncertain and unsettled. And when things are unsettled, they can shift.
We are seeing that shift right now in employees. There is a shift to a new perspective on their company. A shift to a different way of working remotely – possibly forever. A shift to different ways of interacting. A shift to a nimbler approach to responding to the changing workplace. A shift to different possibilities. The result is an employee who has been forced into change and, in response, is considering opportunities for the future. That mobility is seen in our recent survey where only 35% of those currently employed felt confident they would be working for the same company in six months. That means they are open to a possible shift to a new company.
At the same time, many companies have thinned down their staff. If they are preparing properly, they have evaluated their existing talent and kept the best people, but many have been forced to let people go. They will need to add to their teams if they want to compete effectively as the recovery begins.
All of these factors combine to result in a perfect hiring storm:
- The economy is beginning to reopen.
- People are looking for jobs.
- The best talent, in theory, should be currently employed, but they are willing to change jobs.
- Companies are looking to hire.
The result? Barring a spike in COVID cases that force another shutdown, when the economy reopens fully, there will be a giant surge in hiring unlike anything we have ever seen. While we still have the negative impact of the hit to the economy, we are poised for a quick rebound. We may not return to where we were before, but it will be a giant leap to a different level.
Are you ready for the Great Rehire? Because we are headed to the biggest, hottest free agent market the workforce has ever seen. In The Great Rehire series, we will explore how to prepare for the surge, how to retain your current top talent, how to be positioned to find and attract the best talent in the period of recovery.
Be sure to our insights to learn more and to continue reading our “The Great Rehire” blog series.