Widespread layoffs have begun across the economy as employers struggle with the impact of business lost because of the coronavirus. According to media reports, more than 1 million workers could lose their jobs by the end of March.
Ball State University Economist Michael Hicks told the Washington Post that March could be the worst month for layoffs in U.S. history.
Last week, unemployment claims rose to 281,000, an increase of 70,000 from the previous week. The Department of Labor reported it was the highest number of initial claims since Sept. 2, 2017, when the number reached 299,000. “The increase in initial claims are clearly attributable to impacts from the COVID-19 virus,” according to the announcement.Media reports say more than 1 million workers could lose their jobs by the end of March due to #coronavirus. #COVID-19 #HR #HRTech Click To Tweet
Economists expect the pace of layoffs will only get worse.
Since March 9, retailers and local businesses around the country have closed as restaurants, schools, theaters and other gathering places complied with state policies meant to restrict the virus’s spread. In the last several days, large employers have taken similar steps. Marriott International said Tuesday that it would furlough tens of thousands of workers, and Delta Airlines is releasing 800 contractors as it reduces capacity by 40 percent.
Media reports say that, so far, most of the lost jobs have been in transportation, hospitality and retail, and have largely involved gig and contract workers. Full-time employees are seeing reduced overtime or regular hours, said the Washington Post.
At the same time, many large businesses have hesitated to sideline their employees, and hope to use technology to hold down costs, Gartner said. Nearly half plan to freeze hiring.
Impact on Work: Wide and Deep
The coronavirus has forced nearly 90 percent of global employers to either encourage or require employees to work from home, while 97 percent of them have canceled work-related travel, according to Gartner.
To cover pandemic-related absences, some 48 percent are requiring employees to use sick leave first, then vacation leave and finally potential PTO, Gartner said. Twenty percent have increased PTO for employees who are either sick or caring for an ill family member, and 18 percent have increased PTO for parents whose children’s schools closed.
Many companies have avoided talking about job cuts so far, and a number of brand-name firms continue to pay those who’ve been idled because of fallout from the virus. Disney is paying workers even though its theme parks are closed, Microsoft is paying hourly workers who support its facilities at a time when 80 percent of its employees are working from home.
Still, ripple effects are bound to be seen. Many businesses say they’ll reduce the work done by external partners. Twenty percent plan to stop or limit consultant spend and/or reduce the number of contract workers.
In an effort to help employers reorganize their workers or prepare for layoffs, a number of HCM technology providers have begun offering their products for free. For example, iCIMS is providing open access to some of its communications, applicant tracking, CRM and virtual career fair capabilities. HR Acuity’s employee relations and investigation platform is available at no charge until July 1. Of course, those offers may help business down the road by exposing new customers to the vendors’ offerings.
The sudden concern about workforce reductions comes after years of employers struggling to deal with a tight labor market. HR technology providers have focused much time and resources on developing more dynamic solutions to help organizations recruit and retain employees.
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