It seems like a nightmare. In March, Wisconsin’s unemployment rate sat at an enviable 3.1 percent, and by the end of May it had skyrocketed to 14.1 percent.
As COVID-19 has sickened more than 2 million Americans and counting, it has also exacted a devastating toll on the economy, halting years of growth and leaving millions unemployed.
Anthony Snyder, CEO of the Fox Valley Workforce Development Board, says the situation has led to disastrous consequences for many workers. With so many abruptly unemployed, the state’s unemployment insurance system quickly became overwhelmed.
“When the UI systems got hit with hundreds of thousands of applications and well over a million telephone calls, it was a real wake-up call. One day, you can be happily employed and the next day, find yourself without a job — and an antiquated system and a closed job center,” Snyder says.
The Wisconsin Department of Workforce Development, which oversees unemployment benefits, said an outdated software system, policies surrounding unemployment and an unprecedented number of claims coming in all at once combined to create a chaotic situation. That led to delays and frustrations for many filers.
Compounding matters, Snyder says enforcement of the Worker Adjustment and Retraining Notification (WARN) Act has been lacking. Several businesses have closed without warning, hindering the organization’s ability to initiate its Rapid Response process. During Rapid Response, FVWDB receives the names and contact information of soon-to-be-laid-off individuals to do outreach about skills assessment and job search planning.
Snyder says the hardest-hit sectors include restaurants, retail, hospitality and tourism. Though the Safer at Home order has been lifted, some businesses might not recover, he says. In addition, some health care systems, which shelved non-urgent procedures for a period of time, have begun to institute furloughs and layoffs. Manufacturing, conversely, has seen less impact up to this point.
“We think this is the calm before the storm,” Snyder says. “With all job centers closed at least until deep into July, we’re preparing for the deluge of permanently laid-off — we call them dislocated — workers we expect to serve.”
While FVWDB is preparing for the worst, Snyder says as businesses in the state begin to gradually open — and with more limited operations in many cases — the unemployment rate will likely decrease some. Losing a job is painful but can lead to new opportunities, he says. The manufacturing base in the region remains strong, and growth areas include some health care roles, information technology and logistics.
Nykki Milhaupt, a compensation consultant for CLA’s human resources consulting team and president of Fox Valley Society of Human Resource Management, says the pandemic complicated many aspects of human resources.
FVSHRM, a nonprofit that supports HR professionals, has worked quickly to provide tools and resources for its members. For example, law firm vonBriesen & Roper recently led a webinar about returning to work safely.
“It’s really hard because it’s not just about hiring right now. Are you keeping your people? What positions do you have? Are there pay cuts involved?” Milhaupt says.
Prior to COVID-19, it was a candidate’s market. With unemployment now in the teens, Milhaupt says she’s had to change focus as a compensation and recruitment specialist.
CLA needs to continue to fill its talent pipeline, especially for CPAs, so it’s extending offers to graduating students. That can lead to discord and confusion among existing staff members, as CLA, like many companies, has instituted pay cuts.
Milhaupt says throughout the HR world, she’s seen companies begin to slow down on hiring practices. Where before many would aggressively pursue top talent, more are now re-evaluating the need to fill open positions. They may look at whether roles could be combined or become
For companies that are hiring, Lindsey Dix, senior talent consultant/recruiting manager for The H.S. Group, says the process looks different than it did four months ago. Most companies had no procedures in place for hiring people sight unseen, but that’s just what many have had to do.
“HR representatives are needing to get more unique with their approaches to onboarding and orientation,” she says.
Bringing someone into a company without being able to offer a tour and introduce new co-workers creates an added challenge, Dix says. Studies show a high percentage of people decide within hours on their first day at a new job whether they are going to like it, she says, so the stakes are high.
Milhaupt says while virtual onboarding is new to a lot of companies, it can offer some benefits as well — she did all her training online when she joined CLA. Companies such as Google, Amazon and Twitter have been hiring and training this way for a long time.
Remote work and flexibility are important to people, and statistics show many companies are seeing higher productivity from remote workers. Milhaupt says companies would be wise to look at making permanent changes to hiring and onboarding practices.
“It’s forcing (companies) to do something I feel like people have been asking for a long time,” she says.
Though the status quo flipped abruptly and many are now seeking work, Milhaupt says companies should remain focused on benchmarking and compensating people fairly and resist the temptation of “going cheap” when they are hiring. It speaks to culture and how companies want to be viewed in the long run, she says.
Employees will leave as soon as the economy picks up if they’re not compensated competitively, Milhaupt says. The onboarding and hiring process is expensive, so retention is important.
Dix agrees. She says she fears the fallout from the situation could continue, with more terminations and furloughs possible in the fall. It’s more important than ever for companies to “walk the talk” when it comes to culture, she says.
“It’s hard to keep up that morale. I think HR is going to get a big lesson on culture and how especially the role of HR can play such a huge part in that, but it goes beyond HR. It’s your leaders. It comes from the top,” Dix says.
Help for the unemployed
The Fox Valley Workforce Development Board has created a form to provide easy outreach to people who have lost their job. Workers who are permanently unemployed can visit foxvalleyjobcenters.com to fill out the form. It collects some basic information, and a career planner will follow up with the individual promptly to discuss available services.