Last year we concluded our 2020 Sales Hiring Forecast with the following statement. “Short term, the only thing that could derail this over-heated job market is a recession.” We obviously hadn’t considered the possibility of a Global Pandemic and its resulting effects on employment. Despite COVID’s brutal impact on the economy in Q2 2020, much of its effects on employment are behind us. Although no one officially puts out a sales profession-specific hiring forecast for the upcoming year, we can aggregate Manpower, Glassdoor, Monster, and the Bureau of Labor & Statistics (BLS) projections to gain enough clarity to make a 2021 Sales Hiring Forecast.
2020 Sales Hiring in Review.
2020 began with an exceedingly low 3.5% unemployment rate. In fact, the BLS reported that in December 2020 there were 1.5M more job openings than unemployed persons to fill them. Then COVID and the resulting lockdown of our economy hit in late March. Unemployment rose dramatically and peaked at 14.8% in April of 2020. Fortunately, hiring rebounded quickly as the BLS chart (below) shows. Unemployment stood at 6.7% at the end of December 2020.
Despite this pickup, several sectors have been devastated and continue to suffer from high unemployment rates. The worst-hit has been the Hospitality & Leisure industry which is reeling from a 15% unemployment rate. In all, 16.9M Hospitality & Leisure jobs were lost in March and April and only 4.9M jobs have been created or restored for a net loss of 12M jobs in this sector.
As a whole, the economy lost 5.2M jobs in 2020 which means that sectors outside of Hospitality & Leisure added 6.8M jobs in 2020. This suggests that there is still a war for talent in most industries outside of the battered Hospitality & Leisure segment.
2021 Sales Hiring Forecast.
The Manpower Group is one of the largest staffing firms in the world and their quarterly Employment Outlook is one of the most respected available hiring projections. They forecast a Q1 2021 Net Employment Outlook for the US of +17% which is on par with their 2017 Net Employment Outlook and only slightly lower than their Q1 2020 Net Employment Outlook of +19%. Globally, employers from 34 of the 43 countries surveyed expect to increase hiring in the first quarter of 2021. Of these 43 countries, only Taiwan has a stronger hiring projection for Q1 than the US. For our brothers and sisters to the north, Canada has an Outlook of +7% and places 12th among the 43 countries.
This brings us to sales hiring specifically. Both Linkedin and Monster examine job posting trends on their sites to make hiring projections by occupation. Linkedin’s Jobs on the Rise in 2021 and Monster’s 2021 Hiring Trends both place sales roles at the top of their lists of occupations with the most hiring demand.
Another helpful employment metric, the Linkedin hiring rate, can be found in Linkedin’s January 2021 Workforce Report. It measures the number of hires amongst its membership divided by the total number of Linkedin members. Per this metric, hiring is rising and has almost returned to pre-COVID levels. (The black line in the chart below shows 2019 hiring by month and the brown line shows 2020 hiring by month.) With vaccine availability ramping up and more economic stimulus on the way, competition for talent should become intense in the latter half of 2021.
2021 Hiring Trends.
There are a few hiring trends that the COVID lockdowns accelerated that will continue in 2021.
1. Remote work. COVID lockdowns forced companies to allow employees to work from home. This has had a significant impact on office-based, inside sales, and customer success roles which we expect to continue.
According to a December 2020 survey by Upwork, 41% of the American workforce will be working remotely in 2021. This survey also predicts that 22.9% of Americans will still be working remotely 5 years from now.
Smart employers located in expensive and brutally competitive geographies (the Bay Area or Manhattan, for example) will use this to their advantage.
2. Virtual interviews. Linkedin’s 6 Recruiting Trends That Will Shape 2021 reveals that 70% of recruiters believe that virtual recruiting will be the new standard. Employers and job seekers take note. Zoom interviews aren’t going away. Read 4 Zoom Sales Interview Tips if you need to sharpen your virtual interviewing skills.
Sales Hiring Beyond 2021.
In last year’s sales hiring forecast we shared two factors that will intensify the battle for sales talent: the aging of the U.S. population and the slowdown in the growth of the labor force in the US. Those factors are still present.
On top of these factors is one looming potential threat. The stock market is currently massively overvalued as measured by the Buffett Indicator. This metric was made famous by the legendary investor Warren Buffett. The Buffett Indicator measures the total value of the stock market compared to GDP (the total revenue of the US economy). At the start of 2021, the total value of the US stock market was $47.6T and the estimated GDP for the US in 2020 was $21.5T. This puts the Buffett Indicator at 221%. To put this another way, the total value of all US stocks are 2.21x the total revenue of the US economy. During the Internet (dot com) bubble of 2000, the Buffett Indicator hit 150% or 1.5x before stock prices were almost cut in half over the ensuing 18 months.
We are not economists and this is not a financial blog but this risk is worth noting. One of the bright spots in 2020 that helped consumer (and business hiring) confidence was the strength of the stock market. Should a massive stock price revision occur, it will be interesting to see the impact on consumer and business confidence (and ultimately sales hiring). Failing a stock market correction, we expect sales hiring (and sales professionals’ compensation) to accelerate in 2021.