Despite the COVID-19 pandemic, economists expect 2021 will bring increased economic growth and more opportunities to hire.
While the COVID-19 pandemic continues to impact communities all over the United States, many companies are looking ahead to 2021 as an opportunity for hiring or rehiring employees.
In the first quarter of 2021 alone, more than 20% of U.S. firms are expecting to hire new employees, according to the ManpowerGroup Employment Outlook Survey. The survey also indicates that employers in three of the four major U.S. regions “have stronger intentions to hire” in the first quarter of 2021 compared to the fourth quarter of 2020.
“We expect the momentum, especially at the beginning of the year, to pick back up in the job markets,” Michael Stull, senior vice president of ManpowerGroup North America, told Forbes. “For many employers that we are talking to, everyone feels like [July] is when we will be fully back up and running and the pandemic will be behind us.”
Here are four big reasons companies should consider hiring in 2021.
Economic activity could swing back to pre-pandemic levels
At the end of 2020, the Federal Reserve increased its economic outlook for 2021, with an expectation of 4.2% real GDP forecast versus 4.0% expected previously. Economists generally agree with this forecast and expect a tepid first quarter of 2021 followed by sustained growth in the following three quarters. Multiple factors impact the favorable forecast, including optimism about COVID-19 vaccines and the potential for people who held off on spending in 2020 to splurge in 2021.
“We see really strong growth potentially starting in the second quarter [of 2021],” Barclays economist Jonathan Millar told USA Today. “It’s a pretty strong year.”
If the economic consensus forecast holds, 2021 will provide a growth opportunity for many companies. With this growth, having enough employees on hand will be essential to ensure businesses can serve their customers.
If the economic consensus forecast holds, 2021 will provide a growth opportunity for many companies.
Federal coronavirus stimulus can help companies get back to normal
The recent passage of $900 billion in coronavirus stimulus from the federal government could help companies make it through the pandemic and potentially hire or re-hire through the first half of 2021. Two major provisions of the recent stimulus bill could provide a significant boost.
First, the popular Paycheck Protection Program (PPP) has reopened so many businesses can get access to forgivable loans, either for the first time or through a “second draw” PPP loan. One condition of these forgivable loans is that businesses must maintain or add to payroll, potentially opening the door to expanded hiring.
Second, the government dramatically expanded the Employee Retention Tax Credit (ERTC), which is designed to encourage businesses to keep employees on payroll. In the first and second quarter of 2021, employers that meet new eligibility requirements can receive a tax credit for up to $14,000 per employee. This assistance could stabilize operations and spur more hiring in the first half of the year.
Easier to hire remote workers
One enormous change for businesses in 2020 was the shift to remote work, with many companies altering operations so employees could work from the safety of their homes. This change will persist in 2021, and businesses across many industries have the opportunity to hire workers that have adjusted to remote work. Companies will also have access to a larger talent pool versus if they were only hiring locally.
A survey from Enterprise Technology Research (ETR) predicts that permanent remote workers are expected to double in 2021. With this shift, companies will require less permanent office space, and those savings could shift into hiring more workers.
“Completely remote companies with no headquarters will continue to form as other organizations decide to reduce their office space for hybrid teams or forgo one altogether to save on costs,” Moe Vela, chief transparency officer of TransparentBusiness, told Forbes.
Opportunity to create a more diverse workforce
Finally, following major social and racial justice movements in 2020, companies have the chance to hire with diversity in mind in 2021. Human resources officers and company executives can use hiring in 2021 as an opportunity to respond to employee calls for greater diversity.
“In addition to strategically and safely getting our workforces back into an office, diversity, equity and inclusion need to remain at the forefront,” Leslie Mikus, vice president and talent leader at MERGE, told Human Resource Executive. “Now is not the time to take our foot off the gas as we continue to promote our differences (including differences of opinion), live our authentic selves at work and find ways to make our organizations more inclusive (and therefore better) than ever before.”