The tradition of working outside the home may be coming to an end as the effects of the coronavirus pandemic is starting to affect company’s long term plans. A study by professors at Harvard Business School, the University of California, San Diego, and University of Virginia stated that “The COVID-19 pandemic shifted the focus of job-seekers toward larger and more resilient companies.”
The study looked at job-search behavior on the platform AngelList Talent and found an increased interest in job advertisements from large firms, especially among those with more experience or education, after the pandemic started. These job hunters also showed more flexibility being open to lower wages or relocation. In the paper they said that “The findings raise questions about how the pandemic, or other economic downturns, affect the flow of talent to start-up entrepreneurial firms.” It is called “Flight to Safety: How Economic Downturns Affect Talent Flows to Startups,” and is distributed by the National Bureau of Economic Research.
In it the authors note that ”We find that job seekers shifted their searches toward larger firms and away from early-stage ventures, even within the same individual over time. Simultaneously, job seekers broadened their other search parameters, considering lower salaries and a wider variety of job types, roles, markets, and locations.” New businesses saw a drop in the number of high quality job seekers, described as more experienced or more educated. The paper noted that “This led to a deterioration in the quality of the human capital pool available to early-stage ventures during the downturn.” Also from that the leaders of the paper said that, “Our findings uncover a flight to safety channel in the labor market, which may amplify the pro-cyclical nature of entrepreneurial activities.”
The number of long term unemployed Americans stood at 3.9 million in November, which accounts for over one third of the total number of counted unemployed individuals in the country. Even though total unemployment fell in November the total number who had been unemployed for 27 or more weeks rose. Meanwhile the total labor-force participation rate fell, meaning less unemployed people were looking for a job. In the past seven months the reported unemployment rate fell by 8% to 6.7%, but many analysts say that it will likely take over a year to return to an unemployed rate under 5% and multiple years for it to get to the 3.5% unemployment rate seen before COVID-19.