The presence of so many mid- and senior-level executives among those laid off has created a kind of unemployment denial wave.
Neither the economy nor the job market will turn around in January, according to recruiters, outplacement counselors and career coaches. In fact, the environment might get worse before it gets better.
The U.S. lost more than 2 million jobs during 2008, more than 500,000 in November alone, according to the most recent Bureau of Labor Statistics report available at the end of 2008. The U.S. lost another 100,000 during the first weeks of December, according to analyst reports that predicted as many as 600,000 total job-losses through December.
Outplacement firms are swamped, according to Sally Havers, senior vice president for business development at The Ayers Group/Career Partners International.
“We are anticipating some reductions in force in the first quarter of 2009,” said Ayers, whose group is bracing for an influx of the shocked and displaced who will be working for Ayers clients until layoffs scheduled for January and February. “There will be a lot of talented people looking around for what’s next.”
Not all the news is bad, however, according to Bob Cozzens, president of the National Banking & Financial Services Network – a network that connects individual and boutique recruiters nationwide in the same way the Multiple Listing Service connects real-estate agents.
“There are pockets of activity that are strong; some of our members have had excellent years, even banking recruiters have had excellent years,” said Cozzens, whose group represents more than 100 companies and about 300 recruiters who mostly focus on local markets. “Even when you see that XYZ bank is laying off thousands of people, our experience is that there are still hiring needs to be filled.”
Smaller companies may also hire a potential job seeker on a contract basis, tiding him over a rough financial patch, and turn the arrangement into a full-time job when the economy improves enough to justify it, she said.
“Job seekers have to be a little creative in a market like this,” Havers said.
Not only do companies need to replace the normal number of those who retire or leave for other reasons, they have to hire people to clean up the mess the rest of the economy made. Financial executives with skills and experience at “workouts” – negotiations between homeowners and mortgage holders to ease payment plans and avoid foreclosures – are at a premium right now.
Not that they’d be talking too much about that. “From a PR point of view, it’s suicide for companies to lay off a gazillion people, then advertise they’re hiring other people,” Cozzens said.
The impact of the recession is so broad that, incongruously, it’s not generating the kind of bitterness of previous recessions, which tended to hit one part of the economy or one class of workers much harder than others, according to Diane Grimard Wilson, a career coach who’s president of Grimard Wilson Consulting Inc. and author of ” Back in Control: How to Stay Sane, Productive, and Inspired in Your Career Transition.”
But the presence of so many mid- and senior-level executives among those laid off has created a kind of unemployment denial wave that will break during the first part of 2009, she said.
“A lot of the people who have been laid off this time around are not the type of people who get laid off regularly,” she said. “Many of them may have unrealistic expectations of how long it takes to get a job, even without a recession, or no expectations at all. So we may get into a period after the New Year where that reality sinks in and they may be in for a dark time emotionally.”
That, and the inevitable new layoffs in January and February, may be offset by a wave of hiring by managers or companies who know they need the extra bodies but have “just not pulled the trigger,” Cozzens said. “People are just flat afraid. For the positions that are open, employers are dragging their feet.”
Waiting for good news
It will take only a little positive pressure to push those companies into making the hiring decisions they know they have to make, Cozzens said.
A new presidential administration, a little good economic news or just a sustained lack of bad news might be enough.
“People want to believe that Obama’s plans are going to help,” Cozzens said. “Any change might do it. Look at all the money people have pulled out of the market and is just sitting on the sidelines. With a little bit of good news, that money could come back and the market could really pick up and give the market back some confidence. That will filter back to corporate America and cause more of those foot-draggers to make some decisions. It wouldn’t take much. “