The recent report of 638,000 jobs added for the month of October is positive from the sense of hundreds of thousands of U.S. workers finding employment, but the pace will likely continue to slow, especially if virus counts rise.
“October’s numbers are another solid step towards recovering the jobs lost in the COVID-19 downturn. Still, if job growth continues at this pace, we have another year or more to a full recovery. The pace of job growth is probably not fast enough to relieve Washington’s concerns. Congress and the White House will likely still push stimulus measures to re-catalyze the recovery and address elevated unemployment,” said Marianne Wanamaker, labor economist and ThinkWhy executive advisory board member.
The U.S. still has 10.1 million jobs to recover, and LaborIQ® by ThinkWhy projects all the jobs will be recouped by early 2023. The biggest storylines to watch for the remainder of the year are:
- Any changes on the horizon related to the election’s outcome
- Timing, adoption, and number of people who will get a vaccine
- Impacts to industries and locations based on tightening social restrictions to contain the virus
- Stimulus to keep businesses and consumers afloat
Why It Matters: Key Business Impact
While we continue to see economic activity toward recovery, until a vaccine is available there will likely be some bumpy months of growth ahead, whether in certain industries, geographies or for the whole nation. Still, the expectation of a strong rebound on the other side of COVID-19 is the baseline. Until then, look for certain industries to remain much stronger than others.
Recruitment for the following types of businesses will likely remain more robust than for others through the end of 2020:
- Retail (some seasonal)
- Finance and insurance
- Home delivery services
- Grocery stores
- Computer equipment
- Federal government
- Housing construction
- Scientific research and development
As businesses and talent acquisition professionals plan for recovery and growth, LaborIQ by ThinkWhy advises to:
- Target cost-effective locations for remote hiring across the country.
- Keep a pulse on labor market performance, where hiring is increasing, and projected recovery timelines. These markets are where business growth and expansion opportunities exist.
- Recruit workers with transferable skills from underperforming or lagged industries.
- Stay current on market salary demands. Wage growth has remained strong during the pandemic, especially for many skilled labor occupations.
INDUSTRY RECOVERY TRACKER
LaborIQ® forecasts the labor market to be back to pre-pandemic level by the first half of 2023. Several industries are poised to recover faster, while a few others could lag the 2023 timeframe by up to two years. This projection is based on moderate job growth during this year’s fall and winter seasons, followed by stronger, more sustainable job growth beginning in mid-2021.
“Hiring has been robust for businesses less impacted by the pandemic, such as Scientific Research, Computer System Design and Lending. Acquiring talent to meet business demand is already challenging, and if the economy continues to improve, wage growth for key roles will likely be strong among those businesses in 2021,” stated Jay Denton, Chief Innovation Officer and SVP of Business Intelligence for ThinkWhy.
Industries expected to return to pre-pandemic employment levels:
2022: Construction, Financial Activities, Healthcare and Professional and Business Services
Construction: Based on the National Association of Homebuilders survey in Q3 2020, approximately 13 percent of respondents were planning to buy a home in the next 12 months.
Financial Activities: Related to the statement above, lending occupation hiring remains strong due to low interest rates, especially in locations such as Charlotte and Austin. This could be one of the first industries to fully recover all lost jobs.
Healthcare: This sector remains as one of the most in-demand due to an aging baby boomer population.
Professional and Business – Projected to be the strongest-performing sector by the end of 2022 with technology and other high-skill jobs already experiencing very tight labor supply.
2023: Manufacturing and Trade, Transportation and Utilities
Manufacturing: Hiring continues as demand for durable goods has increased, while consumers are spending less on face-to-face services. Supply-chain challenges continue to hamper the industry’s ability to get goods to consumers.
Trade, Transportation and Utilities: Many transportation and material-moving workers have moved into the retail sector to help with home delivery services, as there has been a major shuffle in this industry. The major concern is for travel-related transportation between now and the end of the pandemic.
2024: Government and Mining and Logging
Government: State and local governments are the concern for this group as the pandemic’s effects could impact them for years. Temporary Census hiring has helped boost the 2020 numbers.
Mining and Logging: The energy sector has gone through multiple disruptions over the last several years, and slower growth is currently projected as it stabilizes.
2025: Leisure and Hospitality
Leisure and Hospitality: This timeline has a lot of potential to change quickly, especially for travel and dining. But, with the virus still not yet under control, businesses in this industry continue to face significant risks.
To read the full report, click here.