Advice From an Economist: Job Searching in an Economic DownturnSeptember 30, 2020
By: Jane Kellogg Murray
Jane Kellogg Murray is a senior editor for Indeed's Career Guide with experience writing and editing for dozens of lifestyle magazines across the U.S. Based in Vermont, she enjoys helping others find suitable remote work opportunities through Indeed.
It’s no secret that the economic impacts of COVID-19 have been widespread and deeply devastating to the job market. No industry has escaped a loss of job opportunities, with recent reports indicating that even roles in the tech industry, which initially experienced less severe impacts, are now trending below overall job postings.
While it’s true that millions of jobs have been added back to the market since mid-May 2020, Indeed data shows there are still far fewer jobs now than there were in 2019—approximately 13 million. In addition, due to the uniqueness of this situation and ongoing uncertainty about the pandemic, political factors and consumer behaviors, many economic experts don’t have a clear view of what’s to come.
Indeed researchers continue to find that some industries are suffering greater job losses than others, but the impact can shift within a short period of time. In a mid-September report from the Hiring Lab, Indeed Chief Economist Jed Kolko suggests that this may be due to standard hiring practices in these industries. “Lower-wage industries like retail and food service adjust their workforces in response to month-to-month or even week-to-week changes in demand,” Kolko explains. “But it is more expensive and often takes longer to fire and hire higher-wage workers. Higher-wage industries like tech and finance might plan their headcounts based on what they expect demand to look like longer-term, in future quarters or years.”
While the future remains somewhat unpredictable, it can still be helpful to take stock of the current state of affairs. In this article, we examine industries most impacted by the pandemic, with insights from Indeed economists about how these industries are currently performing and how people can best explore existing job opportunities. We also consider alternative roles and sectors and offer tips on how to use your transferable skills to transition to a job or industry.
Industry insights from the Indeed Hiring Lab
AnnElizabeth Konkel, an economist with the Indeed Hiring Lab who focuses on the U.S. labor market, explains how COVID-19 has impacted five industries over the past seven months:
Retail: “At the start of the crisis, many people pulled back on spending. Consequently, the retail sector felt the impact of the coronavirus’ economic damage early on,” Konkel says. Retail is still in flux today. “On one hand, there’s been an encouraging rebound in the retail job postings trend. Yet at the same time, more and more major retailers are filing for bankruptcy. This is something I’ll be watching closely over the coming months.”
Healthcare: “Initially, the trend in healthcare job postings was holding up better than the overall job postings trend,” Konkel says. “As the pandemic progressed, the healthcare job postings trend dipped below the overall job postings trend. While this may seem unexpected during a pandemic, it’s important to remember that hospital budgets have been crunched by the coronavirus. Routine procedures were canceled, not to mention this spring’s PPE shortages.”
Travel and Hospitality: “As the pandemic took hold, travel and hospitality were hit especially hard given that both leisure and business travel was entirely upended,” Konkel says. “The sector continues to struggle today. While there has been a slight recovery since its low in early May, people’s confidence in staying healthy while traveling is critical for a fuller bounceback.”
Arts and Entertainment: “With movie theaters closed and sporting events canceled this spring, the arts and entertainment sector was pummeled by the coronavirus at the outset of the pandemic,” Konkel says. “While a few events have returned, most mass gatherings are still off the table due to the virus. This is the prime reason why the arts and entertainment sector has seen little bounceback and likely won’t until the virus is under control.”
Food and Beverage: “The food and beverage sector was especially hurting in March and April when bars and restaurants were shuttered,” Konkel says. “The state of this sector is solely dependent on today’s public health response to the virus. As long as the virus continues to rage, the job postings trend in the food and beverage sector will struggle to return to its pre-COVID level.” As of September 2020, the foodservice industry—encompassing roles like servers, bartenders, cooks or baristas—is experiencing declines in job posts similar to the economy average along with nursing and customer service industries. There are 19.1% fewer job postings in the food and service industry now than there were in 2019.
Tips to navigate the job search in an economic downturn
If you were working in a service industry job when COVID-19 hit, your hours and wages have likely been impacted if not lost altogether, and it could be especially challenging for you to find similar roles while social distancing measures are in place. With new cases of COVID-19 still rising in the U.S. and as job postings continue to trend negatively in hard-hit industries in relation to last year, you might be considering the best way to navigate the economic downturn. Follow the guidance below to help you with your job search during this period.
Reset your expectations
A helpful first step could be to reset your expectations for your job search in certain service industries. It will likely take longer than normal to find a position, and if you are offered a role, it might not be your dream opportunity. Adjusting your expectations realistically can help you make an informed decision about how to move forward in an appropriate amount of time. Consumer spending typically declines when unemployment spikes, which can have a significant impact on industries like retail, travel, and the food and service industries.
For example, the USDA found that as a result of the Great Recession, “...household spending on food away from home declined by $47 billion (18 percent) from 2006 to 2010 and did not recover to its 2005 level until 2016.” A recent report from the Congressional Budget Office projected similar results from the 2020 pandemic, projecting the hit to the U.S. economy could last for a decade. You can use resources like the charts above and other Indeed Hiring Lab reports to understand how you might shift your outlook and actions.
Use your time wisely
Joshua Williams, an assistant professor of fashion management at Parsons School of Design, suggests that people take advantage of this time to evaluate their careers, especially as it relates to work-life balance. “The simple change of working from home has led people to reconsider where they live, how they live, and their overall relationship to work,” Williams says. "For some, this has also been an opportunity to focus on a hobby, a craft, a pet project or a business idea. In some cases, this may be the foundation for new businesses, but for others, it’s a chance to reset and reinvigorate their current roles.”
Expand your job search parameters
If your industry is still heavily impacted by the shutdowns, you might not be able to find work in your field right now—or even your current location. City-based jobs have been especially impacted by the pandemic, Kolko says, so if you had already been considering moving somewhere more rural, this might be the prime opportunity to do so. “Job postings fell more initially in travel and tourism destinations, large and small, but postings have picked up since May in hospitality metros like Las Vegas, Miami, and Orlando,” Kolko explains. “Job postings have rebounded much more slowly in metros where more of the jobs can be done from home. In work-from-home metros, postings in retail, restaurant and personal-services jobs have suffered. Postings in high work-from-home metros are nearly 30% below last year’s trend.”*
Kolko says retail and personal-services sectors have suffered more in places where a larger share of local customers have been able to work from home. “This is consistent with recent evidence that richer people’s spending has dropped more, hurting businesses more in richer neighborhoods than in poorer neighborhoods.” Consider joining online groups specific to the location you'd like to move to so you can network with others in your desired industry or connect to recruiters.
Related: How to Get a Job Before You Move
Assess your financial situation and create a savings plan if possible
It might be stressful to thoroughly examine your financial stability in the current environment, but being aware of your expenses, income and savings can also help you make a plan for the future. For example, if you can calculate your current budget, then you can assess things like your job search timeline, if you should consider reducing your rent or where you can cut any other expenses. Look online for local and federal government assistance you might qualify for, or reach out to your state representative if you need still help with unemployment.
Consider other short-term or gig opportunities
Depending on your expectations and financial outlook, you might consider short-term opportunities in sectors that are positively trending, such as driving, or the other sectors experiencing smaller than average declines in job posts, such as loading and stocking or beauty and wellness. These roles could be more likely to share directly transferable skill sets like sales, interfacing with customers and working in a physically demanding or fast-paced environment.
Gig jobs like driving for a delivery company are on the rise and might be a good temporary solution. There also may be short-term opportunities at grocery stores, which are still experiencing higher demand as people continue to cook more at home instead of eating out. Try not to feel discouraged if this option is not part of your long-term plan, and remember that these are extenuating circumstances.
Read more: Companies Hiring During COVID-19
Shift to a different role or industry
If you are considering transitioning jobs or industries, then it can be helpful to focus on your transferable skills when looking at potential new roles. If you have worked in a service industry like food or hospitality, you probably practiced customer service skills like emotional intelligence, problem-solving, effective communication and collaboration. These are important skills that are valued in a breadth of other roles and industries.
Williams suggests unemployed retail professionals pursue technical knowledge if they are looking for a role with more stability. “The most obvious opportunity in fashion retail today is the ability to read, evaluate and implement strategy around complex data, while still having a subjective, emotional connection to the industry and the needs of consumers,” Williams says. “It’s the ability to think right- and left-brained—which has always been an important part of being successful in fashion, a balance between commerce and creativity. Companies have to be more agile to stay competitive in this market, and they will value employees that can adapt quickly.”
Overall, job opportunities in hard-hit industries like food, travel, healthcare, entertainment and retail are fewer and farther between, but they’re still on par with the economy average for now. However, the course can change directions quickly in these industries due to the nature of this downturn—a public health crisis with restrictions that ebb and flow—and the relative ease with which employers can hire and lay off workers.
While the job market might seem abysmal right now, there are still jobs out there, Konkel says. “I would encourage people to still apply while being aware that it'll likely take longer than in the pre-COVID era to get the job they are looking for.”
“I’ve watched students graduate and get jobs, being fully onboarded and trained online,” adds Williams. “I’ve seen people in my network share the sad news that they have lost their job, only to find a new and better opportunity a few months later. This certainly doesn’t discount the effect that losing income has on a person overall, but there are opportunities out there—especially as companies are realizing this situation may continue for much longer than expected and they can’t remain stagnant.”