How will the Next Recession Impact the Labor Market?March 05, 2020
Key indicators suggest an economic slowdown is coming…maybe as soon as the end of 2020. How will this impact the job market?
We have all been told an economic slowdown is coming….but when? Key indicators suggest that a slowdown could happen towards the end of 2020 (after the election) or sometime in 2021. The good news is that the slowdown is not expected to be dramatic.
How will this slowdown impact the job market?
The employment market will undoubtedly be impacted but there are some unusual circumstances currently at play. The unemployment rate is the lowest it has been in 50 years. When we couple that with baby boomers getting out of the job market by retiring or converting to part-time employment the demographics indicate that there will remain a shortage of candidates in many industries.
Here are some other potential impacts:
- A recession could stall venture capital money going into startup life science and technology companies. This will have an impact on hiring but there is currently such a dramatic shortage of candidates that experienced professions should see relatively little impact.
- Professional services hiring could slow, which will probably have a modest impact on hiring. Most of the impact will be at the lower and entry levels with college graduates being the most impacted.
- Manufacturing could be at risk. A recession coupled with the impact of tariffs could slow the industry. Manufacturing typically takes longer to recover from a slowdown due to the longer cycle needed to drive revenue. The expectation is that blue collar jobs would be the hardest hit.
The good news is that most of the impacted workers will still have options. They may experience a layoff but there will most likely be employment opportunities for them even it is not in their current area of expertise.
Since the next recession is expected to be relatively mild, the wait for a recovery should not be as long as we experienced in 2008.
Questions on how your business could be impacted by this slowdown? Contact KLR Executive Search Group, LLC.