The impact of this Great Recession on the US workforce

by 21 Jul 2009

It would appear that even in the best-case scenario, many workers will jump ship as soon as the job market rebounds – particularly in organisations that suspend good talent management practices during the recession, writes Allan Schweyer

In May and June 2009, the Human Capital Institute and Monster Worldwide conducted extensive survey research into the effects of the “Great Recession” on the American workforce. More than 700 companies and almost 5000 passive and active job-seekers partici pated. Concurrently, the researchers undertook a thorough review of available research focused on this recession’s impact on the work force. A number of business and thought leaders also expressed their opinions during a series of one-on-one interviews.

When combined, these quantitative and qualitative findings reveal impressions of a US workforce being reshaped by powerful economic forces not seen since the 1940s. The results of our research are like ly to hold true, in varying degrees, to countries outside the US, es pecially those where customs and workforce culture are very similar, such as Australia.

Concerns and observations

Both employees and employers express valid concerns and obser vations, including:

• Because of older workers delaying retirement, those entering today’s workforce will accept jobs for which they are overqualified, stay in entry-level positions longer and face slower career paths. Em ployees have lowered expectations for rapid career advancement.

• Young workers believe they will find themselves the stewards of their own form of retirement – a self-financed, long-lasting, grad ual process.

• Workers of all ages and experience levels appear resentful or fear ful of their employers, stressed, and less productive – and poten tially distracted by active searches for other employment. They are less loyal, unhappy, and resentful about economic prospects.

• Employers face heightened risk regarding top talent, and are more concerned about attrition of these employees than they were be fore the recession began.

• Workers and employers agree that pay remains the dominant mo tivation for US employees, and this motivation is not altered by the recession. Some younger workers appear drawn to opportuni ties for “service” for the greater good.

• Young workers, especially those representing Generation Y, seem particularly cynical and mistrusting of “Corporate America.”

• Many employees are working harder as a result of their belief that management has exploited the recession and become less tolerant of challenges to authority.

• Employers have benefited from the swing of the labour market pendulum, many workers admit that they are “just happy to have a job” in this recession.

Where to from here?

Is there a light at the end of the tunnel? Many workers are using this downturn to learn new skills and prepare for career changes, or to de velop their own self-employment or freelance opportunities. They have faith that technology and small business entrepreneurs – not just gov ernment actions – will help the economy recover. And employers who can convincingly offer workers job security might be able to out-re cruit and out-retain their competition later.

For employers, caution remains key, even as the economy im proves. They must pay attention even to short-term shifts in work force attitudes during this rough period, or face the possibility of a broad employee exodus when conditions stabilise.

At least in the short term, our research clearly shows that work ers of all ages and at all levels are highly stressed. They appear sus picious, resentful and even fearful of their employers, to the extent that they are, in some cases, less productive at work and in most cases, actively seeking work elsewhere. Organisations that ignore these warning signs are likely to be harmed as the recession recedes.

It would appear that even in the best-case scenario, many work ers will jump ship as soon as the job market rebounds – particularly in organisations that suspend good talent management practices dur ing the recession.

If there is a bottom line, it is this: Through all economic cycles, the best organisations continue to pay attention to talent manage ment and employee engagement, even when they are required to downsize. The best-performing organisations keep in mind the eco nomic recovery while making the necessary adjustments to survive the recession.

Allan Schweyer is executive director of The Human Capital Institute. HCI and Monster Worldwide will publish a three part series on the impact of the Great Recession. The research will be available at This article contains excerpts from the research.


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