Economic reports released this week for April 2009 indicate that while unemployment around the world continues to rise, the pace of job loss has slowed compared to that of previous months. Read more in this week’s recruiting headlines in RR’s Week in Review.
1. Unemployment Rate Rises as Pace of Layoffs Slows (Washington Post)
While the U.S. unemployment rate rose to 8.9%, today’s U.S. Labor Department report shows the pace of job losses slowed in April compared with February and March. The total number of jobs lost fell 539,000 last month—the private-sector fell by 611,000 jobs and the government added 72,000 government jobs.
A separate report in Bloomberg yesterday showed that U.S. productivity rose 0.8% in the first quarter as companies lowered expenses by squeezing more from remaining staff. The Labor Department also saw a decrease in claims for unemployment insurance, another potential indication that job cuts may be slowing.
2. Rate of Decline in Job Market Slows (Financial Times)
In April, the UK saw a slowdown in the pace of jobs decline. However, this is only slight indication of improvement as unemployment is still quite high and additional lay-offs are expected, with some economists forecasting unemployment to reach 3 million in the next year.
3. Help Wanted: Why That Sign’s Bad (BusinessWeek)
Although the economy of late has been bleak, there are still 3 million job openings that need to be filled. While this may sound like good news, this figure indicates there may be a large skills mismatch between workers and employers. In the short-term, it will be more difficult to fill positions with hires that are good fits. A skills mismatch could potentially have long-term implications as well, such as a prolonged, high unemployment rate, talent wars to recruit the few qualified candidates (if inflation picks up), and a “learned helplessness” effect in the unemployed as a result of government programs designed to protect the jobless.
Keep in mind that as you receive more applications for fewer jobs, you will need more rigorous screening, selection, and assessment techniques (members only) to help you identify the best people for the job.
4. Bright Spot in Downturn (New York Times)
Who is hiring in this downturn? Hospitals, colleges, discount stores, restaurants, and municipal public works departments. While this article further reaffirms the skills mismatch in industries hit hard by the down economy (see the Business Week article above), it also implies that jobs are opening in certain industries as recession-proof businesses expand and backfilling (as a result of retirements and turnover) is required.
5. Outsourcing: Thriving at Home and Abroad (Business Week)
Because of rising costs in major outsourcing destinations in India and lower pay accepted by the unemployed, highly-skilled U.S.-based workers, some ‘second tier’ US cities are becoming cost effective for outsourcing staff. This allows companies to snag up US-based talent for a fraction of the cost they would have incurred only a few years ago. Eastern and Central Europe are experiencing a similar trend, as ‘Western’ European firms are looking for cheaper alternatives; they are able to turn to countries like Poland and Bulgaria for a more economic outsourcing solution.
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