Make no mistake: 2009 will not be kind to job seekers, no matter why they’re looking. But for those searching because they’ve lost a job, the second year of one of America’s deepest post-war recessions will be downright cruel.
With a nasty feedback loop forcing up home foreclosures and unemployment in tandem, millions more Americans are likely to lose their jobs before the carnage stops. Unemployment is projected to reach 8.5 percent by late 2009, according to a report from UCLA’s Anderson School of Management.
Indiana University economist Bill Witte sees a similarly grim picture. “An unemployment peak of around 8 percent is likely,” he says. “I wouldn’t be surprised to see a number over 9 percent.”
Against this backdrop, one statistic might seem like good news: There were 3.05 million job openings in October 2008, according to the Bureau of Labor Statistics. But that’s down nearly 1 million openings from the 4.04 million reported a year earlier. And many of the jobs counted as open won’t be filled in the foreseeable future.
Some staffing firms are keeping a stiff upper lip. Manpower’s Employment Outlook survey says that employers in eight of 13 industry sectors plan to increase staffing levels in the first quarter of 2009, whereas 67 percent plan to hold the line.
But many employers are planning to cut their workforces as their businesses shrink. Just over one-third of employers expect to reduce headcount in 2009, according to a survey conducted by Mercer in early November 2008.
Finance and Accounting: SOX Redux
One bright spot in the job market, if you don’t mind the irony: Remember Sarbanes-Oxley (SOX), the 2002 regulatory reform that emerged from Enron, WorldCom and similar accounting scandals? Just as SOX has been a font of jobs for accountants and finance professionals, so will the Troubled Asset Relief Program (TARP), the $700 billion federal bailout aimed primarily at financial institutions.
“A lot of financial people losing their jobs will be working on contract to support TARP efforts,” says Brendan Courtney, a senior vice president at Spherion. “New regulations will force companies to operate differently, and they’ll have to throw bodies at the problem.” Public accountants, auditors, forensic accountants, business analysts and credit and collections specialists will all be in demand in 2009, Courtney says.
Heavy industry is likely to suffer another worst-yet year in 2009. “If you’re in a manufacturing job in a car-related industry, your job loss might be permanent,” says Tom Hall, a professor of economics at Miami University’s Farmer School of Business in Ohio. “You need to at least consider retraining.”
The new administration, with strong Democratic majorities in Congress, will likely boost federal employment, bringing back to the government payroll many jobs that were privatized under President George W. Bush. But it will be a different story at the state and local levels. Lacking Uncle Sam’s ability to print money, those governments will slash employment to balance their budgets. “State and local employment will be terrible,” Hall says.
Trouble Ahead for the Class of ’09?
Prospects for campus recruitment in 2009 appear guarded at best. “It’s pretty unprecedented,” says Christine Bolzan, founder of Graduate Career Coaching. “Even in the bleakest of years, companies will come to campus to maintain presence, and some aren’t this year. But among employers who actually are recruiting, I haven’t witnessed any hesitation.”
Some colleges appear to be holding their own when it comes to on-campus recruiting. “We’re already scheduling companies for spring career fairs, and the number of responses is pretty average,” says David Durham, direct of career services at West Virginia University. “Employers are still recruiting, but maybe not as many [students].”
When Might the Labor Market Improve?
The consensus of economists is that the recession will likely linger, perhaps into the third quarter of 2009 or beyond. And net job creation is probably further off. “Typically the labor market lags the economy as a whole,” Witte says.
If you can weather a long financial storm without a regular income, a period of unemployment can be a good time to go back to school. “But make sure that any education you acquire relates to something you truly want to do," says Martha Finney, author of the forthcoming book, Rebound: A Proven Plan for Starting Over After Job Loss. “Don’t immediately go after the jobs on one of those top 10 careers lists, because that’s just soulless.”