October BLS indicates weak economic recovery

Posted by: Joel Capperella

The Bureau of Labor Statistics released October’s unemployment report this morning, and we are not surprised to see the unemployment rate creep past 10 percent for the first time since 1983. Economists were predicting only a .1 percent increase from September’s 9.8 percent rate, so today’s report reveals quite a jump. If any positive can be found in such a staggering unemployment number, it is the fact that last month, only 190,000 jobs were lost, so the pace of job loss seems to be on a continued decline. 190,000 jobs lost is, of course, nothing to be thrilled about, but it is far better than the nearly 750,000 lost in January.

As we stated last month, we try to take the optimistic view here, and the jobless rate is more indicative of a weak recovery than a prolonged recession, especially considering the GDP numbers announced last week. Recovery, weak or strong, is recovery nonetheless. The hope is that it doesn’t become a “jobless recovery,” so it is necessary for those whose job it is to strategize workforce alternatives start to identify opportunity–for both their businesses and employees.

Here are two tips for seeking opportunity in a prolonged, weak recovery:

1. If you haven’t already done so, perform a discrete analysis of your workforce segmentation. It is likely you have been through at least one reduction in force, so scrutinize all other areas of labor related expense. Evaluate all policies and procedures for the ‘non-employee’ segment of your workforce not only to identify additional cost saving measures, but more importantly, to lay a foundation for a dynamic mix of talent that will be used for both the near- and long-term future of your firm. This will allow your organization to quickly ramp talent needs up and down with minimal disruption to your business, and better protect your firm with the inevitable next downturn comes.
2. Protecting yourself against large turnover when the economy rebounds is more than just a hope. We discussed this last month, but it’s worth stating again. Your employees are likely weary of picking up extra responsibilities resulting from RIFs, and are no longer shell-shocked over the fear of losing their employment. When the tide turns, they’ll start to look for better opportunities. Now is the time to invest in the development of your staff to increase loyalty and protect retention. Evaluate historical employment, in every segment of the workforce, against key economic conditions that matter to your business in order to forecast reliable resource needs in the next six to 12 months. Communicate this data to your business leaders so they can properly factor these forecasts into their annual plans.

We’ve still got a ways to go, but by making adjustments to your workforce structure and working to improve retention, you’re likely to be ahead of the competition when we begin to see significant growth.