Including major themes for the year to come, as well as a look at the impact of COVID-19 on the 2020 labor market, the 2021 Outlook report includes recovery progress by subsector and industry, a look at the pandemic employment impact, job growth by location, wage growth, and look at diversity and demographic impact.
“The U.S. is still reeling from the job losses that occurred in March and April 2020 due to the impact of COVID-19, though we’ve found the economy has made substantial progress getting back on track,” said Jay Denton, SVP of Business Intelligence and Chief Innovation Officer at ThinkWhy. “Should a COVID-19 vaccine become available by early 2021, we’re forecasting one of the strongest years of growth on record in 2021 – an especially important trend for talent acquisition professionals given improved revenue outlooks will prompt more hirings.”
Major 2021 themes outlined in the report include:
The Pace of Recovery
The pace of the recovery will likely vary significantly by industry and location. Close to 22.2 million jobs were lost in March and April 2020 combined, a 14.5% drop in the U.S. employment level. A key measure for understanding the resilience and outlook for the labor market is to measure the current employment level compared to its pre-COVID-19 total – many types of businesses will have recovered all lost jobs before the end of 2021, while others could lag for years.
Talent Acquisition & Supply Challenges
The sectors that dropped the least and rebounded the fastest in 2020 included:
- Financial Activities
- Retail Trade
- Health Care
- Professional & Business Services
From a talent acquisition standpoint, some businesses in these sectors will face a shortage of talent in 2021 – the most severely impacted locations in 2020 will likely see some of the biggest hiring volumes in 2021, with a flood of unemployed candidates vying for open positions. For stronger-performing locations, industries and types of jobs, the supply of available talent will already be constrained, and the key will be to poach employees from their current jobs. Any uncertainty lingering in the market could make that more difficult.
In addition to COVID-19, 2020 will be known for its increased awareness of diversity inside and outside of the workplace. Workplace diversity will remain a focus in 2021, with some organizations looking to create new roles such as a Chief Diversity Officer or having corporate bonuses tied to diversity initiatives. Some of the divergence in trends by ethnicity, gender and age should narrow as the economy reopens, but a focus on equality for job opportunities and salary is expected.
ThinkWhy’s talent acquisition software, LaborIQ®, forecasts the labor market to be back to pre-pandemic level by the first half of 2023. This projection is based on moderate job growth during this year’s winter season, followed by stronger, more sustainable job growth beginning in mid-2021.
The full report with additional insights and trends can be accessed here.
LaborIQ® by ThinkWhy is breakthrough technology providing talent acquisition professionals with data-driven solutions to win talent and grow their bottom line.