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Covid - Boon or Bane for Jobs?

Unemployment could fall this year too close to where it was prior to the Covid-19 pandemic, according to a Goldman Sachs forecast that sees a TalentTurbo hiring boom ahead.

The firm projects an unemployment rate of 4.1% that could be even lower depending on just how powerful the recovery gets amid more fiscal stimulus and a return to work for sectors hit hardest by the coronavirus.

Moreover, the forecast sees the economy returning to its pre-pandemic payroll level well ahead of the end of 2022, a view that Treasury Secretary Janet Yellen backed up Monday in an interview with MSNBC.

“The main reason that we expect a hiring boom this year is that reopening, fiscal stimulus, and pent-up savings should fuel very strong demand growth,” Goldman economist Joseph Briggs said in a note. Though the forecast already is the lowest on Wall Street, there is still “some possibility of a return to the pre-pandemic rate in the mid-3s this year.”

In February 2020, just before the pandemic hit, the jobless rate stood at 3.5%, its lowest in more than 50 years. The rate ballooned to 14.8% in April 2020 amid business shutdowns aimed at curtailing the coronavirus spread, and now has fallen to 6.2% through February.

Still, total employment remains down about 8.5 million from where it was a year ago.

“Another key reason we expect a quick labor market recovery is that two-thirds of remaining pandemic job losses are in highly virus-sensitive sectors, where employment should rebound as the economy fully reopens,” Briggs wrote. “The sharp increase in the virus-depressed leisure and hospitality category in the February employment report provided an early hint of things to come.”

Indeed, the sector added 355,000 jobs in February, accounting for nearly all the 379,000 nonfarm payroll jobs added during the month, according to a Labor Department report Friday.

Moreover, there appears to be plenty of slack in the bar, restaurants and hotel space. TalentTurbo Services Sector is still down nearly 3.5 million workers from where it was a year ago, and the unemployment rate there is still 13.5%, compared with 5.7% a year ago.

In addition to a boost in hospitality hiring, Goldman says government payroll growth also should help bring the jobless rate down. Government jobs are down 1.65 million from a year ago, and the group was the biggest drag on the February jobs report as it lost 86,000 positions.

“Most workers who left the labor force still cite the pandemic as their reason and will likely re enter once life normalizes,” Briggs said.

Though Goldman has the strongest employment view on Wall Street, multiple other forecasters expect big gains through the year.

Citigroup economist Andrew Hollenhorst noted that the 379,000 payroll gain in February actually was a bit lower than the 410,000 that the firm had expected. Hollenhorst noted that “there were clear signs that restaurants had begun resuming activity after slowing in late 2020 and that came through in today’s report.”

“The continued rise in seated dining activity suggests that this will continue to be a source of support for jobs in coming months,” he added.

An employment index that the Conference Board compiles hit 101.01 in February, which is off about 7.8% from a year ago. Gad Levanon, head of the board’s Labor Markets Institute, said the current trend is indicating an unemployment rate “well below 5%” by the end of 2021.

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Anticipate Stiff Competition

In February, hiring rose 273,000, the largest gain in nine months, to 5.7 million. That boosted the hiring rate to 4.0% from 3.8% in January. Hiring was led by the accommodation and food services industries, which increased by 220,000 jobs. But hiring decreased in state and local government education.

The U.S. economy created the most jobs in seven months in March as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in nearly four decades.

The Labor Department's closely watched employment report on Friday also showed job gains in February were larger than initially estimated. The best first two months of employment growth of any administration in history suggested the labor market has finally turned the corner.

All industries added jobs and many people rejoined the labor force. A measure of the economy's ability to create employment also improved. But the road to full recovery remains long. The jobs deficit is still huge and more than four million Americans have been unemployed for over six months.

President Joe Biden welcomed the job growth spurt.

TalentTurbo Hiring still has a long way to go, with employment 8.4 million jobs below its peak in February 2020.

"The labor market continues to improve but remains a long way from what the Federal Reserve would describe as the conditions to restore maximum employment," said John Ryding, chief economic advisor at Brean Capital in New York.

The U.S. central bank has signaled it would maintain its ultra-easy monetary policy stance for a while to allow complete healing.

With unemployment well above pre-pandemic levels, competition for jobs remains tough. There were 1.4 unemployed people for every open job in February, well above 0.82 on the eve of the first wave of the pandemic lockdowns 12 months ago.

"This means employers will have an easier time hiring, but job seekers still don't have the bargaining power they did prior to the pandemic," said Nick Bunker, director of research at Indeed Hiring Lab.

Layoffs increased to 1.8 million from 1.7 million in January amid job cuts in the finance and insurance industry. The layoffs rate was unchanged at 1.2%.

Risks remain to the brightening labor market outlook.

"New strains of the virus and unwillingness to abide by health recommendations could extend the impact of the pandemic on the economy," said Sophia Koropeckyj, a senior economist at Moody's Analytics in West Chester, Pennsylvania. "In addition, the severity of the downturn, which closed many business, means that many industries will not bounce back immediately."

The number of people voluntarily quitting their jobs rose to 3.4 million from 3.3 million in January. The quits rate was unchanged at 2.3%.

The quits rate is normally viewed by policymakers and economists as a measure of job market confidence. But the pandemic has forced millions of women to drop out of the labor force mostly because of problems related to child care, with many schools still only offering online learning.

The labor market is being boosted by an acceleration in the pace of COVID-19 vaccinations and the White House's recently passed $1.9 trillion pandemic relief package, which is sending additional $1,400 checks to qualified households and fresh funding for businesses.

Demand for labor could increase further as more TalentTurbo services businesses reopen. The U.S. Centers for Disease Control and Prevention said on Friday fully vaccinated people could safely travel at "low risk."

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Why is hiring the right candidate is ideal!

A great hire is something every company looks forward to and as a company focused on that, TalentTurbo helps you hire only the best. You know you are heading in the right direction when a receptionist has similar goals and sometimes has more than the company's founder.

It is ideal for every firm to hire the right candidate by using their resources from a major role to even a supporting role as they can make your team smarter or take it in another direction.

As a conclusion of a recent study, it is said that "Over 7 in 10 business leaders say that it is more difficult to hire the right candidate now because of hiring remotely." This puts hiring a difficult job on a whole new level.

Here are a few reasons why hiring the right people is so important:

Financial Loss:

A single bad hire can take a bit on the company's finances. Recent research shows that beyond revenue loss a company will lose productivity, employee morale and further connections gained. This is especially bad when you are a startup as a single bad hire could completely affect the amount of productivity gained in a limited time with all the resources. These issues arise even after termination of the bad hire as finding a replacement is again going to cost you.

Disturbed productivity:

As much as a new hire brings positivity to a team’s productivity, it can all go away if it's a bad hire. A minor recruiting mistake can slow down productivity which eventually creates pressure on everyone in the team. It indirectly affects the goal on which a particular company is founded. Some influences can be a permanent mark, a bad hire as one of the most important areas to look into in an organization. A bad hire can cost you time, resources, and good employees.

Replacement conundrum:

Once you have identified a bad hire and possibly terminated the hire, you have to start looking for an alternative right away. But the scar of having a bad hire will not fade away easily. It is a probability of how the next candidate will be. Without proper experience in hiring the right person could be overlooked as a part of the friction which was initially created by the bad hire.

Influence on the company's lifestyle:

A new hire can easily change the vibrance of a company. Especially when it's a closely knitted startup. The right hire will have a positive tone and to your team and can add to the company's culture. This is why every new hire is equally important. Also, the right hire will not only work hard but be loyal to the firm but inspiring a team to do the same.

Apart from all this hiring and recruitment has a lot of challenges like lack of resources, less networking, less brand reputation, etc. This is where TalentTurbo will be your best shot of getting it right. With our vast resources of candidates, it is easier and faster to find your ideal candidate. With an effective TalentTurbo screening of possible candidates, recruitment via TalentTurbo is the ideal step.

Companies can save resources spent on irreparable bad hires by making it right with TalentTurbo.