Business owners should not interpret high unemployment numbers in 2020 as a sign that it’s now an employer’s market, and unnecessary to fight for talent with competitive benefits and wages, according to a recent article in the Harvard Business Review.
That’s because today’s labor market is different from prior economic downturns, and unlike anything seen before since the birth of modern capitalism, according to Atta Tarki, the article’s lead author and CEO of the global management consulting firm ECA. He noted that some industries and firms are devastated while others thrive, are unaffected, or have been able to rebound exceptionally quickly.
“The common narrative focuses on the fact that unemployment rates are at unprecedented high levels,” Tarki said. “However, a more important conclusion for employers might be that, given an economic crash, job openings have remained at unprecedented high levels.”
Changes in unemployment rates vary vastly by industry, geography, educational level, specific skills and a number of other factors. Americans are relocating, but their moves are motivated by COVID-related factors and economic support from family, rather than the attractiveness of local job markets.
“Many employers will find that specific (micro) conditions in their industry and local labor market will be more helpful in determining how to adjust their talent strategies to the impact of COVID rather than following general (macro) trends,” Tarki said.
View the current job market as a sharp curve on a racetrack – one that appears only once a decade or so – that affords you the opportunity to pass other companies competing for talent, he said.