How Has COVID-19 Impacted Recruiting

By Michael Klazema on 7/29/2020

According to CEO Today Magazine, the size of the job staffing industry in the United States has fallen 21 percent, from $152 billion to $119 billion, due to the pandemic. The reduction in size sends a clear message: not many companies have been hiring during the pandemic. By mid-April, roughly a month after COVID-19 had begun shutting down the American economy, 60 percent of U.S. employers had already scaled back their hiring, according to CNBC. With hiring reduced or frozen, it stands to reason that most employers haven’t had much need for recruiting or staffing services.  

The pandemic is far from over, which means the woes of the recruitment industry—and, indeed, the entire global economy—probably aren’t at an end yet, either. However, it is at least reasonable to assume that recruiting and staffing agencies have seen their fortunes bounce back somewhat this summer. In June, the United States economy added 4.8 million jobs, smashing a record for job gains that had just been set the previous month (the economy gained 2.7 million jobs in May). Those figures still represent just over one-third of the 22.2 million jobs that the economy shed between February and April. However, they do show economic recovery and likely mean that recruiters have had a bit more work to do since the beginning of May. 

Some sectors have shown more job growth than others. According to LinkedIn, the roles that had the most job postings in May were, in order, software engineer, nurse, salesperson, driver, supermarket department specialist, Certified Public Accountant, project manager, store associate, supply chain associate, and fast food worker. The industries seeing the most significant increases in views per job posting, meanwhile, are education, hardware and networking, wellness and fitness, entertainment, legal, corporate services, and software or IT services. 

What insights can we draw from these job lists? One important takeaway that could impact recruitment is the growing demand for freelance and contract workers. LinkedIn also tracked jobs with the highest growing demand, two of which—freelance engineer and marketing strategy consultant—were contract roles rather than full-time employee positions. Recruiters could indeed see a shift in interest among their clients, away from full-time positions to contract or freelance roles that allow more flexibility for the employer and the job seeker alike. Especially with COVID-19 cases on the rise in most parts of the country, there’s no telling whether another shutdown or economic dip might be coming in the future. Employers may be looking to keep their options open—and avoid another round of layoffs—by converting certain employee functions to contractor status. 

Another factor that may impact recruiting is the growing narrative of an impending mass exodus from major American cities. There has been much discussion in recent months about city life losing its appeal. There are numerous explanations behind this narrative. Cities are more expensive to live in, are more densely populated, and have largely been the hardest hit by COVID-19. Many people have also commented on COVID-19 stripping away the benefits of living in cities, such as a wealth of nearby entertainment or nightlife activities. With this conversation happening, employers and recruiters alike need to be aware of what an exodus from metropolitan areas might mean. For city-based companies, it might mean focusing on recruitment for telecommuting jobs. For employers in more rural areas, it might mean casting a wider net and trying to recruit workers from nearby cities. 

It could be months or years before we see the full impact of COVID-19 on hiring, on recruitment, and the job market as a whole. One thing is clear, though: the COVID-19 pause is over. With some stay-at-home orders lifted, businesses are getting back to work, back to hiring, and back to trying to achieve growth. Taking this opportunity to look at your recruitment and hiring policies is advisable to see where some tweaks may be due. If those tweaks include alterations to your background check process, make sure to contact for assistance and advice.

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