The talent wars were set to escalate even more in the beginning of 2020; the unemployment rate was holding at near record lows of 3.5 percent and many organizations were looking for the people that would help them grow into the next business cycle. Then Covid-19 hit. The week ending April 19 saw 4.4 million more Americans file for unemployment, bringing the five-week total of unemployed workers to 26.5 million.
New data from my company Vistage-- based on an April survey of 1,611 CEOs from small and midsize businesses-- underscores this dramatic trend. According to our survey, 30 percent of CEOs had reduced staff, 22 percent had made layoffs and 16 percent had furloughed employees in the last 30 days.
Looking ahead at the next 30 days, 34 percent of CEOs reported plans to reduce staff, 27 percent reported plans for layoffs and 27 percent were considering furloughing employees. And when asked about their plans for the next 12 months, 37 percent of CEOs reported plans to decrease their workforce.
However, hiring is not halting altogether. Of the CEOs we surveyed, 19 percent said they plan to increase their workforce in the next 12 months, and another 42 percent said they expect their firm's total number of employees to stay the same. In fact, 28 percent of CEOs reported an increase in business and new opportunities as a result of the Covid-19 crisis.
Regardless of whether your company is hiring right now, it's important to understand how the Covid-19 crisis is reshaping the hiring landscape -- both in the short term and long term. Here's what you need to know and how to prepare.
Where hiring stands today
What was true in past years remains true today: Retaining good people is critical to the success of companies. Right now, CEOs are thinking about retention in one of two ways. One, they're exploring if and how to retain their best people during the crisis. Two, they're considering how to bring back their best people when the crisis is over.
Additionally, firms are hiring for special skills and specific needs. After calling a truce in the hiring wars, companies have shifted their attention to hiring for special skills -- specifically, skills in healthcare, business consulting, technology, financial services and banking. Most companies are hiring people to support a current and pointed need, as opposed to a long-term strategy.
And of course, automation is increasing. As people cannot go to work, companies are increasingly turning to automation as a safe, reliable alternative and solution to their hiring woes.
Where hiring is headed tomorrow
First off, firms will take time to fully rebuild their workforce. Companies won't bring back their people overnight, and this process will take time. Businesses that support businesses -- such as convenience stores, coffee shops, office supply stores, gas stations and restaurants that serve the lunchtime crowd -- are most likely to "reset" and come back from the crisis first. Expect roughly 80 percent of workers to go back to their old jobs.
But also, employers will have the upper hand in hiring. At the height of the talent war, employees had greater bargaining power than employers. Coming out of the crisis, that power will shift hands, and employers will wield it to build their ideal workforce: a mix of tenured employees who already know their business and new employees with different skillsets. That said, employees will still dictate some terms of employment, and top talent will retain some bargaining power.
Finally, workers will care more about healthcare than before. After the crisis, healthcare benefits, along with 401(k) plans and stock options, will matter more to workers. Companies vying for top talent should beef up their healthcare benefits to beat their competitors.
How to prepare
Capture your culture in action. Use this opportunity to showcase how your company reacts in a crisis, and how your employees respond. This can speak volumes about your culture and people and create a positive impression with potential new hires. Ask yourself: How is my culture working? How does it benefit my business? Where does it let me down? What is missing? After the crisis, continue to reassess your culture, and eventually reset it in line with the "new normal."
Also, over communicate with everyone. Keep the lines of communication open with all of your stakeholders, including employees and customers. Reiterate the importance of teamwork and trust in your company. The more you communicate now, the better.
You also need to accept that work-from-home is here to stay. It's unlikely that office workers will return to working five days per week in an office environment. In our survey, 92 percent of CEOs said they have implemented remote working in the last 30 days, and 65 percent are considering remote working for the next 30 days. Continue to upgrade your digital technology in the interest of two goals: One, to keep your people connected while working remote. Two, to potentially use automation to perform rote tasks or replace human workers in certain roles.
Remember: The Covid-19 crisis has brought hiring down, but it's not down for the count. This, too, will pass, and eventually the rush for talent will begin again. Companies that focus on leading in this new reality will get a head start on the race.