Hiring Intentions to Spike by Year End

June 10, 2020 – U.S. employers are expecting a significant decline in hiring intentions for the third quarter of 2020, according to the latest “Employment Outlook Survey,” released by ManpowerGroup. Hiring plans in wholesale and retail trade and construction showed the steepest declines from the previous quarter reflecting the impact of safer-at-home / shelter-in-force orders across the country. In contrast, employers in education and health services (+13 percent) and transportation and utilities (+ four percent) reported the most positive outlooks as frontline workers continued to be in high demand both through and after the pandemic peak.

Employers were also asked when they expect hiring to return to pre-COVID-19 levels. An optimistic 60 percent said before the end of 2020, with many expecting a return before the end of summer. Employers in education, construction and government said they expect the shortest COVID-19 hiring impact while those in the professional sector including law firms, accountants and consultants were most uncertain.

“The past weeks and months have seen the labor market transform overnight, with many industries halting hiring instantly, while others including healthcare, e-commerce and logistics saw immediate growth,” said Becky Frankiewicz, president of ManpowerGroup North America. “These numbers reveal the depth of the impact this crisis has had on hiring intentions across our country, yet we are beginning to see very early signs for cautious optimism. As states open up essential roles remain in demand, as well as tech skills including software and app developers, and even new roles like temperature checkers and contact tracers.”

But she said it is “encouraging to see so many employers predict a return to pre-pandemic hiring though we must remember any signs of recovery are fragile.” Now is the time for everyone to join together to rebuild confidence and create opportunities for everyone as America gets safely back to work, she added.

Hiring by Sector

Employers said they expect payroll gains in nine of the 12 U.S. industry sectors during the July to September time frame: Education and health services (+13 percent), leisure and hospitality (+ seven percent), government (+ four percent), transportation and utilities (+ four percent), nondurable goods manufacturing (+three), wholesale and retail trade (+ three percent), construction (+ two percent), financial activities (+ one percent), durable goods manufacturing (+ one percent). professional and business services (zero percent) sector employers expected a flat hiring pace, while employers in the information (- three percent) and other services (- three percent) sectors expected to trim payrolls. Hiring prospects for the national education and health services sector were slightly weaker when compared with the previous quarter.

In nine of the 12 nationwide industry sectors, employers reported considerably weaker hiring plans quarter-over-quarter. The outlook for the wholesale and retail trade sector was the weakest reported since 1991. In four sectors, employers reported the weakest labor markets since 2009: financial activities, information, nondurable goods manufacturing, other services. In the durable goods manufacturing sector the outlook was the weakest since 2010. Outlooks were the weakest since the 2011-12 period in three sectors: construction, government, and transportation and utilities.

Nationally, employers in the leisure and hospitality and professional and business services sectors reported a sharp decline in hiring prospects when compared with the prior quarter. In both sectors, hiring plans were the weakest since they were first analyzed separately more than 11 years ago.

Hiring by Region

Employers in 18 percent of Midwest businesses surveyed expected to grow payrolls in the forthcoming quarter, while nine percent anticipated a decrease and 63 percent expected no change. A moderately weaker outlook was reported in the Midwest’s other services sector in comparison with Q3 2020, while considerably weaker hiring sentiment was reported in five sectors: financial activities, government, nondurable goods manufacturing, professional and business services, and wholesale and retail trade.

In the Northeast, 19 percent of businesses surveyed expected workforce gains during the upcoming quarter, with 12 percent anticipating a decrease and 56 percent expecting no change. Education and health services sector employers in the Northeast reported a slightly stronger hiring pace when compared quarter-over-quarter, while financial activities sector employers reported relatively stable hiring intentions. Hiring prospects for four sectors were considerably weaker when compared with the prior quarter: construction, leisure and hospitality, durable goods manufacturing and nondurable goods manufacturing. In four of the Northeast’s sectors, outlooks declined sharply in comparison with Q2: other services, professional and business services, transportation and utilities, and wholesale and retail trade.

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Employers in 16 percent of the businesses surveyed in the South expected to add to payrolls during the third quarter of 2020, while 11 percent anticipated a decrease and 64 percent expected no change. Hiring prospects weakened in all 12 of the South’s industry sectors when compared with the second quarter of 2020, including moderately weaker hiring plans in two sectors: non-durable goods manufacturing, and transportation and utilities. In two sectors, employers in the South reported a sharp decline in the hiring pace when compared with the prior quarter: professional and business services, and wholesale and retail trade.

In 18 percent of businesses surveyed across the West, employers said they expect to grow payrolls during the July to September period. Thirteen percent of employers said they anticipate a decline and 59 percent expected no change. Hiring sentiment weakened in all 12 industry sectors in the West in a comparison with the prior quarter. Employers said they anticipate sharp declines in five of the West’s industry sectors when compared with the previous quarter: government, leisure and hospitality, durable goods manufacturing, professional and business services, and transportation and utilities.

Global Employment Outlook

ManpowerGroup interviewed over 34,000 employers in 43 countries and territories to forecast labor market activity in the third quarter of 2020. All participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of September 2020 as compared to the current quarter?” Interviewing was carried out during the exceptional circumstances of the COVID-19 outbreak. The survey findings for the third quarter of 2020 are likely to reflect the impact of the global health emergency, and the subsequent economic shutdown in many countries.

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Employers in 35 of the 43 countries and territories surveyed by ManpowerGroup for the third quarter of 2020 expected to reduce payrolls in the period up to the end of September, while payroll gains are expected in seven countries and a flat labor market is anticipated in one.

In a comparison with the second quarter of 2020, hiring prospects were expected to weaken in 42 of the 43 countries and territories, while no change was anticipated in one. Employers in all 43 countries and territories reported weaker hiring sentiment when compared with this time one year ago. The strongest hiring pace is anticipated in Japan, India, the United States, China and Taiwan, while employers in Singapore, Costa Rica, Colombia, Peru and South Africa forecast the weakest labor markets.

In 24 of the 26 Europe, Middle East and Africa (EMEA) region countries, employers expected to trim payrolls during the forthcoming quarter, although limited workforce gains were expected in both Croatia and Germany. Hiring plans weakened in all 26 EMEA countries in comparison with both the prior quarter and last year at this time. The strongest labor markets were anticipated in Croatia and Germany, while the weakest were expected by employers in South Africa, Slovakia and Romania.

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In four of the seven Asia-Pacific countries and territories surveyed, employers anticipated an increase in payrolls during the next three months, while a dip in workforce levels was expected in two and flat hiring activity in one. When compared with the second quarter of 2020, hiring plans weakened in six countries and territories, but were unchanged in one, while employers reported weaker hiring intentions in all seven when compared with this time one year ago. Japanese and Indian employers anticipated the strongest labor markets in the region, while the weakest hiring activity was expected in Singapore and Australia.

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Workforce reductions were forecast for nine of the 10 Americas countries during the July to September period, with employers in the 10th – the U.S. – anticipating limited job gains. Hiring sentiment weakened in all 10 Americas countries in comparison with both the second quarter of 2020 and third quarter of 2019. With U.S. employers expecting the strongest hiring pace, the weakest labor markets were forecast in Costa Rica, Colombia and Peru.

Leading Search Consultant Weighs In

“The COVID-19 pandemic has created an unprecedented situation for all of us,” said Wendy Brown Blau, co-founder and managing partner of Westmont Search. “The economy will recover over time, but hiring practices will change in ways people never imagined. New positions will be created, some positions will disappear and remote work opportunities will be stronger than ever,” she said.

“Short and long-term strategic plans will have to be adjusted as we get used to this new normal and we will need to be nimble and adjust quickly,” Ms. Brown Blau said. “All of this will have a significant impact on hiring and executive search and it is our job in the executive search industry to understand and help guide our clients in these unchartered waters.”

Westmont Search, a sector specialist in healthcare, has found many of the firm’s clients hard hit by the elimination and reduction in elective procedures and also the impact of COVID-19 cases at their facilities. “We are working with clients to figure out those searches that are mission critical, develop new searches for needs that were previously unanticipated and identify those that can be put on pause, changed or eliminated.”

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Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor  – Hunt Scanlon Media