A recovery is in sight – in the economy overall, and in jobs – but on the other side of the pandemic, the workforce may look quite different. To that end, January saw a rebound in employment – where the job gains were small, to be sure, but were gains nonetheless. Overall, the Bureau of Labor Statistics showed that payroll growth was a net 49,000 positions in the month, which stands in marked contrast to the roughly 227,000 lost in December.
Still, the latest reading missed estimates of 58,000 jobs added. The overall unemployment rate came in at 6.3 percent, down from 6.7 percent seen in December. The data show that some sectors still remain hard-hit, where, for example, the leisure and hospitality sector still has been losing roles. In the latest reading, the segment lost 61,000 positions in January, following 536,000 losses in December. The retail trade lost 38,000 positions in January, after having added 135,000 positions in December (in tandem with the holiday shopping season).
As for the gains: The BLS said that in January, employment in professional and business services rose by 97,000, with temporary help services accounting for most of the gain (temp positions accounted for 81,000 gains). Job growth also occurred in management and technical consulting services (which were up 16,000 roles, per the data) and computer systems design and related services (up 11,000). The increases in temporary help services extend gains in this segment seen in December, where more than 64,000 net additions were recorded, after 39,000 positions added in November.
And the gains may be tenuous. In the most recent SMB Main Street study, 26 percent of the more than 560 firms that PYMNTS surveyed said they would lay off workers if another lockdown took place – but for now, an increasing number of businesses found they were relatively more optimistic that they would get through the pandemic. More than half of the firms said they would last at least into the summer of 2022.
Per a recent Gig Economy Tracker, 80 percent of companies now rely on a mix of full-time and part-time workers. And right as the pandemic hit in the spring of 2020, our research showed that 30.6 percent of SMBs that defined themselves as “unstable” have laid off at least some employees to reduce their overhead costs, compared to nearly 18 percent of stable SMBs. Overall, 32 percent of SMBs said they had asked employees to work fewer hours, and that tactic accelerated to 42 percent of firms. Restaurants had been especially hard-hit, with 67 percent having had to reduce payrolls to grapple with the pandemic, followed by nearly 55 percent of retailers.
Here, then, we may see a shift in how we work – and especially when we work. All outfits seek to be judicious about overhead costs, and having a flexible workforce in place can help. But of course, that may also change the ways payroll is, well, paid. It’s likely that earned wage access will gain increased acceptance among employers and ultimately become a selling point. Temporary workers, then, may lead to permanent changes in the payments landscape.
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