2009: Economic Crisis or Opportunity?
Posted February 19, 2009on:
In Chinese culture, the word for “crisis” represents both danger and opportunity. In times of economic crisis, there is no doubt that every organization across America will face difficult decisions in 2009. However, companies that search for opportunity during crisis and take a positive approach to their talent and business initiatives will have the best chance of surviving the recession and positioning their companies for future growth.
On Dec. 1, 2008, the National Bureau of Economic Research officially confirmed the United States was in a recession. According the Bureau of Labor Statistics, the national unemployment rate hit a record high of 7.2 percent in January, and more than 2.6 million people lost their jobs during in 2008. With no end in sight to this economic downturn, it is likely workers will continue to lose their jobs in 2009.
In addition to economic changes and a rising unemployment rate, America welcomed a new president in 2009. The change of political party in the White House, as well as several key initiatives and programs planned for the next four years, certainly will have a large impact on the job market. When referring to America’s economic conditions, President Barack Obama said, “There are no quick or easy fixes to this crisis, and it’s likely to get worse before it gets better.” At the same time, this provides us with an opportunity to transform our economy to improve the lives of ordinary people.”
Now more important than ever, talent managers need to keep up with the latest industry and job market trends to ensure their companies are well-positioned to handle any situation or opportunity that may arise as a result of the economy.
The Job Market
With so much economic uncertainty, it’s no surprise employers have cut back on hiring, impacting several key industries. According to Beyond.com, there has been a 6.35 percent decrease in the total number of jobs posted in November 2008 compared to the number posted in November 2007. The “Beyond.com Q3 2008 Career Trend Analysis Report” revealed the industries that experienced the largest percentage decrease in jobs during the past year included management and business (-4.99 percent); travel, hospitality and restaurant (-1.64 percent); and accounting and finance (-1.51 percent).
Although the information technology (IT) field remains strong with 12.9 percent of all jobs posted to the Beyond Network in the third quarter of 2008, it experienced a significant decline of 1.09 percent, causing the industry to fall from the top position after six consecutive quarters. It was replaced by health care and medical.
Despite the fact the IT industry suffered a decline, this industry is expected to remain strong in 2009. As a result of the economy, many companies will be forced to look more closely at their revenues and expenses, and likely will emphasize technology initiatives that will produce cost savings, efficiencies and promote strategic organizational growth.
Further, many companies are recognizing the importance of hiring well-trained IT workers to help support and carry out the increasingly sophisticated technologies needed to stay competitive in the marketplace. The constant need for technology upgrades will help promote job security for IT professionals and job growth in the IT industry during the coming year.
Not Every Industry Is Suffering
Although many industries have been affected by the economy, Beyond.com’s report indicated some industries still are experiencing growth despite the economic recession. In the third quarter of 2008, the industries that experienced the largest percentage increase in jobs during the past year were health care and medical (2.66 percent), clerical and administrative (1.68 percent), and legal services (1.34 percent).
Whether the economy is thriving or in a crisis, Americans will continue to age, get sick and need medical care. And health care and medical currently is the top industry, representing 12.92 percent of all jobs posted. According to HealthcareJobsite.
com, some of the health care positions that experienced the largest percentage increase in jobs included admissions clerk (9.03 percent), medical assistant (8.66 percent) and medical records assistant (8.14 percent).
Research has shown the recession may even be an underlying cause of job growth in the health care industry due to increased stress, depression and mental illness. The aging population, increased obesity rate and technology advancements also are causing significant growth in the health care industry.
In 2009, health care workers can expect their industry to continue to evolve and welcome new advances in medical technology. It is likely there will be an increase in demand for medical assistants and nursing aids to help reduce hiring costs and keep hospitals and medical organizations running efficiently, especially in light of the current nursing and physician shortage.
Also, new technology breakthroughs will help streamline medical care and reduce costs, giving medical professionals the ability to take on an increased number of patients and reduce the number of patient stays with the growth of outpatient services.
Talent Management in a Tough Economy
In tough economic times, it becomes more than just an opportunity, but a necessity for talent managers to provide strategic leadership to their businesses. Regardless of industry, size of company or type of business, talent managers will be challenged in the upcoming year to get the most productivity out of fewer employees, retain key talent and continue attracting valuable employees despite recessionary financial constraints.
In the upcoming year, talent managers should plan for changes, invest in strengths and take advantage of the weak economy to position their companies for future growth. Here are a few tips talent managers can use to help successfully steer their companies through both good times and bad:
1. Build and maintain a strong employer brand.
Employers who are serious about attracting and retaining the best talent should take time to build their employer brands to differentiate themselves from competitors. Educating job seekers and employees about the company during the economic downturn will help make it easier to attract high-quality talent when the economy picks up.
2. Keep up with industry trends.
Now more than ever, it is important for talent leaders to continue to closely monitor job and candidate activity across various industries to identify and predict marketplace fluctuations and opportunities occurring in the job market. By understanding the trends affecting their industries, talent managers will be able to make more informed business decisions and capitalize on the soft job market to attract new talent.
3. Cherry-pick top talent from competitors.
Although hiring in a recession may seem to go against common logic, it actually is the perfect time to look for great hires typically unavailable under normal circumstances. Many companies have been forced to or have made the decision to downsize their organizations. That means some of the most talented professionals likely will be looking for jobs in 2009. Think of this as an opportunity to enhance the organization and build a workforce with a proven ability to be successful.
4. Identify sources that produce high-quality hires.
As a result of the weak economy, recruitment budgets likely will be reduced, and fewer employers will be willing to pay large sums of money for a recruiter, especially when so many talented professionals are looking for jobs online. Talent managers are realizing the need for a targeted recruitment strategy and are turning to niche job boards to find quality and relevant candidates at a reduced cost.
Further, more companies will begin utilizing social networking sites in their recruitment programs to help promote the company and identify potential candidates for the business.
5. Communicate the plan of action to employees.
In a time of economic uncertainty, employees will look to management for leadership and guidance. Employers should be honest with their workers and clearly explain any plans the company has to build to survive the recession. It is better this information comes from management rather than from peers talking around the office watercooler. If employees understand the company’s goals, they can put rumors to rest and focus on strengthening their performance and individual contributions to help position the company for growth.
6. Reward talent with strategic employee recognition.
It is important for employers to ensure employee engagement and reward high performers, which will help increase workforce morale. Although budgets may be tight, talent managers should look for creative ways to reward staff in the upcoming year by offering programs such as summer flex hours, increased numbers of holiday days and stock options.
Team-building activities also are a great way to encourage innovative idea generation and brainstorm ways to be more efficient. Investing in talent will help ensure a company can retain the employees it can’t afford to lose, while also helping the business become more competitive when the economy bounces back.
Although a recession is not an ideal situation for any business, it presents new opportunities for talent managers that would not exist otherwise. As a result of the shrinking economy and job market, the number of qualified candidates available has increased dramatically, allowing employers to renew their focus on quality of hire.
Challenging times are also encouraging many talent managers to enhance their employer branding and get more creative with recruiting and talent management strategies. Businesses that learn how to turn the current economy crisis to their benefit will have the best chance of surviving the recession and may even come out ahead in 2009.