G-XRJHMYWFYK

GEORGIA AND NATIONAL LABOR MARKET TRENDS: A LOOK AT SIX KEY INDUSTRIES

Dean Ditmar, Operating Partner | July 23, 2020

Pandemic

Overall, the June Jobs Report from the U.S. Bureau of Labor Statistics reflected the expected chaos across the employment market, along with clear evidence of continued improvement related to the reopening of many sectors of the economy. Payrolls were up by 4.8 million, with many job gains in leisure, hospitality, and health services, some of the industries hardest hit by shutdowns due to the pandemic.

In Georgia, we saw the largest uptick in unemployment in March and April (from 3.1% pre-COVID to 12.6% in April). May and June, however, have shown steady improvements at 9.7% and 7.6% (preliminary) respectively.

Given the current uncertainty and volatility in the markets, we won’t know the true impact of COVID-19 across key economic sectors for at least three to six months. That said, a closer look at six key critical industries can provide some insight into the impact of COVID and potential future trends.

Manufacturing

Manufacturing

Manufacturing was hit hard by closures related to COVID-19. In the second quarter of 2020, factory production shrank by a 47% annualized rate, and industrial production by 42.6%, the largest decline since World War II.

As the economy began to reopen In June, Manufacturing experienced a partial snap-back of 7.2%—the largest gain since March 1947—following a 3.8% climb in May. A surge in auto production boosted these numbers, with the rest of manufacturing held to 3.9% growth. Overall factory output, however, was still 11.1% below February levels. Experts, including economists polled by Reuters, agree that new COVID-19 cases are likely to slow the rebound rates in this sector in the coming months.

In Georgia, there has been significant growth in Manufacturing, as Frito Lay, Creative Flooring Solutions and Wellmade Flooring all increased investment in Georgia-based facilities, with jobs following suit.

Hospitality

Hospitality, Leisure,
and Restaurants

With a sharp drop-off of travel and eating out during the early days of the pandemic, leisure and hospitality (including restaurants and bars) experienced the biggest drop in jobs – losing 7.7 million jobs, or 47% of total positions.

Many of those hospitality jobs are returning, however, as many people—particularly those in the younger demographic—seek to re-engage with their pre-COVID leisure and travel activities. Again, rising COVID cases could impact these gains as well, but there is optimism as restaurants and hotels pivot to new ways of making employees and guests safer and more comfortable. This includes re-configuring spaces for social distancing guidelines and widespread mask usage, which according to industry titans like Marriott CEO Arne Sorenson is essential for the continued recovery of the industry.

Trucking Logistics, Warehousing, & Distribution

Logistics and warehousing have seen less severe damage than some other industries, buttressed against some of the more drastic losses as consumers bought more online, resulting in higher need for delivery and shipping services. Less traffic on the road contributed to shorter trip times for both short- and long-haul transportation, allowing carriers to turn trucks around more often. Less stop-and-go traffic also lessens wear and tear on truck components. Perhaps influenced by job losses in other industries, driver turnover is also at an all-time low, lowering the cost of hiring and training new drivers.

The industry has still faced a downturn, however, which began before the pandemic and has been worsened by economic conditions starting in March 2020. Transportation and warehousing have also been at the front lines of the pandemic, employing heightened safety measures for workers and drivers early and consistently.

According to Katie Pyzyk in Transport Topics, truck drivers “have a higher average age than many other professions, and many harbor pre-existing conditions such as obesity or heart disease. Those factors put them at higher risk of severe illness if they contract COVID-19. Carriers are acutely aware of this and take extra precautions to protect this core segment of their ­workforce.”

IT, Software, tech
& Technology

Although the COVID-19 pandemic continues to transform many industries with a sharp drop in demand, the tech industry and IT/technology jobs across all industries have remained relatively unscathed. According to CompTIA, the nonprofit trade association for the tech industry worldwide, the industry itself showed modest losses of 5,600 jobs in June—with three of five tech sectors showing employment gains.

As an occupation, IT jobs in various industries have increased by 227,000, while tech occupation employment increased in five of the first six months of 2020. According to Tim Herbert, executive vice president for research and market intelligence at CompTIA Hiring is expected to continue to accelerate "in areas such as software development, IT support, cloud infrastructure, cybersecurity, and certain emerging tech fields."

In Georgia, Atlanta’s growing tech sector is a big contributor to job gains. Atlanta was among the top five metro areas for job gains from May to June, along with New York, San Francisco, Los Angeles and Boston.

HealthcareHealthcare

After a slight dip in May, Healthcare added nearly 360,000 jobs in June. It’s no surprise this industry is hiring, as those in the healthcare industry have battled burnout and risked themselves on the frontlines of the pandemic for the past four months. Now that states are beginning to reopen, increased COVID-19 cases will lead to a greater need for healthcare workers in all fields. Additional closures may impact elective procedures, however, causing a shift for workers in those fields as income from non-emergency procedures declines.

After a slight dip in May, Healthcare added nearly 360,000 jobs in June. It’s no surprise this industry is hiring, as those in the healthcare industry have battled burnout and risked themselves on the frontlines of the pandemic for the past four months. Now that states are beginning to reopen, increased COVID-19 cases will lead to a greater need for healthcare workers in all fields. Additional closures may impact elective procedures, however, causing a shift for workers in those fields as income from non-emergency procedures declines.

Human Resources
& Staffing

Staffing and Human Resources jobs were also up nationally in May and June. Georgia placed in the top tier of states for HR and staffing employment, with 5,670 HR Manager jobs added for the month. HR managers have become an increasingly critical function as the pandemic pushed workers to remote working; their role will continue to be vital as the return-to-work requires new policies, documentation and staffing changes.

Riding the Positive Trends

Remote Work

While the overall economic and employment news is still uncertain, businesses can take this opportunity to implement better hiring practices and take advantage of some upside trends. Industries like IT, Healthcare & Social Care, Fitness, Engineering, Online Retail, and Warehousing will all see booms in the coming months—particularly for those forward-looking companies that can adapt to post-COVID realities and consumer expectations.

In addition, the trend toward remote working gives employers access to qualified talent across the globe, as location becomes a less relevant metric for hiring overall. There are more workers available, and some may be (at least temporarily) available at lower rates than they would previously—though we’d caution that paying below market can have an inverse relationship with employee productivity and loyalty in the long run. Many workers—having been through the tumult of the pandemic and resulting job losses—may also be less risk averse, which is good news for startups who are less able to offer guaranteed long-term security.