The views expressed here are those of the author and do not necessarily reflect those of SHRM.
As we enter 2010, what are your short-term prospects for the nation’s labor market? Do you envision a peak of unemployment at any specific time?
I expect unemployment to continue rising until the second quarter, possibly as late as June 2010 before peaking at 10.2% or 10.3%. Payroll employment will need to be increasing by about 100,000 jobs per month before the labor market stabilizes. It will need to be growing at a monthly rate of about 300,000 jobs and sustain that level of job growth for one year to bring unemployment down a full percentage point.
Such a rate of hiring for full-time (payroll) employees will not likely occur before the end of 2010.
When hiring becomes active again, do you foresee any particular trends?
As the economy stabilizes over the next three to four quarters (by mid-2010) the early hiring will be part-time and contract workers. I would expect to see these types of jobs begin to grow by the end of 2009 and accelerate in 2010. This is the same pattern experienced in 2001-2002 when job losses among part-time and contract workers continued for 12 months while payroll jobs declined for 27 consecutive months (on a monthly year-over-year basis).
Are there any segments of the labor market that will offer better opportunities in the near future? Are there any sectors that may never experience a full recovery?
At the national level, the only sector that continued to grow over the length of the recession was education and health services. This sector will continue to grow modestly over the short term but will accelerate over the long term. The federal government will also be hiring to both replace an aging work force and to accommodate expansion, especially in the areas of health and education, housing and urban development, security, energy and the environment.
Professional and business services will also re-accelerate quickly in 2010. The manufacturing sector is showing early signs of growth but it is not occurring in all sub-sectors; mainly those that serve the export and technology-base markets. Retail and construction, which experienced the greatest job losses, will also see improvement starting first with residential construction and normalization of the housing markets.
In jurisdictions where the housing market has stabilized, new construction should accelerate in the first half of 2010 and with an increase in re-sales, especially trade-ups, retail sales will pick up, too. However, neither of these sectors is likely to recover their respective share of the pre-recession local labor force.
What is the biggest challenge for HR managers, recruiters and other staffing professionals who will be conducting hiring in the near term?
At the current time (fall 2009), there are six unemployed workers for every job opening. With eight million workers being added to the seven million already on the unemployed rolls since the beginning of the recession in December 2007, what first appeared as a cyclical employment problem has become a structural employment problem.
For the large majority of these unemployed workers, their employers also eliminated their jobs when they were laid off. The major problem coming out of this recession – and one that explains why these workers will remain unemployed so long after the recession is over – is that they are not qualified for the new jobs the economy will be creating in the recovery.
Re-employment will require re-training or the willingness on the part of the unemployed to accept lower paying jobs than they had before the recession.
What changes should HR professionals be more aware of, in light of the government’s recent efforts to stimulate the economy?
Retaining qualified and productive workers has always been a primary objective of successful firms and, as the economy recovers, HR professionals will have to re-double their retention efforts. This will mean retaining older workers, workers who have children or other dependents and workers who otherwise need more flexibility in their work hours and work environment.
Re-training the existing work force will take on new urgency in the coming decade as the shortage of qualified workers grows in the face of growing retirements of the Baby Boomers. While it may appear as if there is a great surplus of labor resources, there is really a looming shortage of knowledge-based and technology-intensive workers and this will only get worse as the economy accelerates through its next peak sometime in the middle of the next decade.
Interview conducted by Joseph Coombs, Workplace Trends and Forecasting Specialist