Analysts Predicting a Rapid Labor-Market Rebound

The Wall Street Journal has an article this week discussing why they expect we’ll see a quick rebound in the labor-market.  They claim the severity of this recession caused companies to be “unusually aggressive” in cutting jobs so they’ll have to increase hiring quickly to grow. The article points out several specific reasons why this labor market recovery will be much stronger than what we saw in the last two recessions.

The first is that this recession saw much deeper job cuts at service related companies. Service industry jobs, which have dominated US employment, declined 2.9% in this recession compared to the 0.5% drop we saw in each of the last two recessions. Economists believe that these service-related firms have a more pressing need than other industries to rehire workers as demand comes back.

The other reason is that since the economy feel so deeply this time there will be a bigger bounce when it recovers. GDP fell 3.9% making it the biggest decline since the end of World War II while the 2001 and 1990 recessions were among the shallowest on record. Comerica Bank economist Dana Johnson says:

“What people forget is that a deeper recession has consequences. There is a considerable relationship between the depth of recessions and subsequent recoveries”

As we’ve seen over and over, a recovery doesn’t mean a return to normal. This is a new environment for both employers and job seekers.  The skills in demand are shifting so many jobs will never come back while specialty areas will see unprecedented demand… and competition for the talent.  For example, here is Northern Trust economist Paul Kasriel:

“We are going through an important transition in the U.S. economy away from consumer discretionary and housing expenditures towards more exports and research and development”

JCSI is constantly evolving to provide the types of recruitment services (like social media, passive candidate research and measurement)  companies will require in this new economic environment.  Let us know how your hiring needs are changing and what services like these might do for your strategy.