At times over the last three or four years, it seemed to many of us that we were being driven to distraction with a steady stream of news, opinion and talk about almost nothing else other than Brexit, Brexit, Brexit. Amazingly, all that now seems like some sort of distant memory, as the news, the opinion, the talk is now almost entirely taken up with the outbreak of the Coronavirus, the measures being put in place to prevent and manage its spread, and the huge impact it is having on all our lives.
In this time of unprecedented measures, and with economies reeling from both the effects of the pandemic and the concurrent oil war taking place between the world’s major producers, as well as all the things we need to be thinking about and doing as individuals, for organisations involved making decisions relating to the labour market, there is a need to look for areas of stability in what perhaps seems like an ocean of uncertainty.
Data is one such area of stability. Of course, we do not yet know how long the current and future measures will be in place, what impact they will have on the long term direction of the economy, and therefore how much of a realignment is going to take place. And yet what we do know is that local economies exhibit a high degree of path dependency, which means that our historic Labour Market Insight (LMI) remains a powerful guide to underlying economic strengths and labour market structures, which are unlikely to change too much in the short-term, although that of course comes with the caveat that much depends on how long the lockdown continues.
If, for instance, measures have been successful by the summer, with hospital capacity improved, the economy should mostly revert to trend during Quarter 3, albeit with some changes, which means that our current trend-based data is still key to understanding long-term direction. Think of it like this: if Bob is traveling from Heathrow to Seattle (“chance would be a fine thing,” says Bob!) via Amsterdam, we can easily plot his planned trajectory. But if, whilst in the air, Amsterdam is suddenly closed, and the plane is diverted to Paris, the underlying data is not suddenly useless. It still tells us where he started and where he is going. And although his connecting plane takes off 300 miles South West of Amsterdam, and may be slightly delayed, his overall trajectory has not changed in a fundamental way. He’s still going to Seattle and not to Sydney.
But what if crisis conditions continue throughout the year, perhaps into 2021? That would of course see more lasting changes to the underlying structure, with local economies and by extension the national economy finding new trends. And yet, even then it remains the case that those new trends can only be properly understood with the baseline of today’s LMI, with which it can be compared. Today’s stock gives us the baseline from which we can get a feel for what talent is potentially being displaced, so that plans for re-skilling can be put in place if the overall structure of the economy dramatically shifts.
Not only this, but we can supplement this with more up-to-the minute data, such as our Job Posting Analytics (JPA) to help us understand how demand might be changing in the short term. For instance, the chart below shows online posting trends for the first few months of the year, compared to the same period in 2019:
As we might have expected, there has indeed been a sharp drop in recruitment activities over the last couple of weeks. But although this looks alarming, let us stress the following:
Firstly, this is over a very short period of time and so it is too early to say whether this is a blip or a long-term trend.
Secondly, it does not indicate a change in the underlying structure or fundamentals of the economy.
Thirdly, whether this trend continues remains to be seen and will depend, to a large extent, on how successful the measure to prevent and manage the spread of Covid-19 are.
We hope to put out regular updates using our JPA over the coming weeks, showing the overall trends in employer postings, as well as some of the nuances that lie underneath that data, such as which jobs are holding up and perhaps even trending upwards in this time of crisis.
It goes without saying that we wish all our customers the very best at this difficult time, as you come to terms with what is happening, both on an individual and corporate level. If you have any questions about our data or our tools at this time, please do get in touch.
