Over the past few months, the concept of a “jobless recovery” has been a hot topic in the news. Experts say the country’s rebound from its most recent economic slow-down might mirror that of 1991, when the market lost more than 200,000 jobs in the year after the recession, even when companies were growing in terms of profits and new technology.
This time around, in the first quarter of 2002, we saw a 5.6% increase in U.S. gross domestic product, and corporate after-tax profit rose by about 0.9%, yet unemployment still continued to rise. Does this prove that we’ll suffer through another jobless recovery? Not necessarily.
It’s important to consider how the market really works when it comes to recruiting and hiring after a slow-down. Simply put, it can take a very long time for the complete hiring process to happen. An organization has to feel confident in its growth potential and make the initial decision to fill a position. Then recruiting efforts begin, candidates are phone screened and brought in for a series of interviews. References are checked. Finally, potential candidates fill out paperwork and meet other staff members. It’s not a short process.
If a company has an excellent hiring process (or rushes the whole thing) they may get this done in a month. But it’s more common for a company to take two to three months to complete all of the steps, which means even if the economy is picking up it may not be reflected in terms of jobs until quite a few months later.
A jobless recovery gets people worried about a growing unemployment rate and slow growth. I think it’s more appropriate to consider the natural progression of the hiring process that follows an economic upturn. Not everything can happen at once, and jobs will naturally follow corporate growth. Before we go dreading the trouble of a jobless recovery, let’s wait a few months and give the natural progression of hiring a chance to do its thing.
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