Search firms hit with inquiries as companies, employees brace for layoffs
March 24, 2020 (bizjournals.com) – Unemployment claims have spiked in Pennsylvania and New Jersey due to the wave of business closures created by the coronavirus crisis. A spate of layoffs and furloughs are anticipated in the coming weeks with many of the businesses that have been shut down unable to pay employees much longer.
For human resources consulting firms, that means their work is just beginning.
He sees two main drivers for the inquiries:
- Chief human resources officers and other corporate executives in need of advice about how to communicate workforce reductions to employees during the COVID-19 outbreak.
- Individual executives who are actively evaluating career opportunities.
“These are people in the executive level who are perhaps seeing the handwriting on the wall and are trying to get out ahead in anticipation of possibly losing their jobs,” Araco said. “We are talking about people as high up as the c-suite level. I would say we are getting the most inquiries from operations, HR and finance. Others are using the freedom of remote working arrangements to sit for job interviews via video chat.”
Ken Dubin of Bala Cynwyd-based search firm Dubin Group said with everyone working remotely, job interviews have either been delayed or are now being completed via video chat. Dubin senses a lack of urgency among companies to fill openings. He thinks some companies have adopted the strategy of waiting until the market gets flooded with laid-off workers because they believe they can hire a strong candidate for less money – an approach that Dubin says is shortsighted.
“Sure you could get that person for $125,000 instead of $150,000,” Dubin said. “But then in three months if the market turns around, that person could leave because they can get $150,000 on the street.”
Dubin said the white collar temp job market has slowed dramatically in recent weeks since states and cities began implementing mandatory work-from-home orders.
“You cannot have a temp accountant working from home,” Dubin said. “Do you really want to trust a stranger with your accounting system? But blue collar temp work has not stopped. Lots of things still need to be shipped, for example.”
Sally W. Stetson, co-founder and principal at Radnor-based executive search firm Salveson Stetson Group, said there is a consistent pattern that has developed from her conversations with CHROs over the past week. Large and midsize companies are trying to do what’s right by their employees. Most are committed to paying them for at least the next four weeks, even if their roles cannot be done remotely, though they might ask them to do online training during this process. Many have also expanded paid leave for employees who are infected and quarantined.
Smaller companies don’t have the resources to do that. Stetson said those employers are looking at providing two weeks of pay at the most before issuing layoffs.
“So the impact depends on how long this crisis lasts,” Stetson said. “CHROs are spending 75% of their days figuring out how to adjust. The challenge is that everything is so fluid.”
Stetson said there are some trends that have developed by industry, though much depends on the financial health of the company before this crisis began.
“There are manufacturers for the health care industry that have remained strong because of the demand and businesses producing the food everyone is hoarding,” Stetson said. “But let’s look at this again in two to four weeks because it’s early.”
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March 24, 2020 (bizjournals.com) – Unemployment claims have spiked in Pennsylvania and New Jersey due to the wave of business closures created by the coronavirus crisis. A spate of layoffs and furloughs are anticipated in the coming weeks with many of the businesses that have been shut down unable to pay employees much longer. For […]