The average duration of unemployment in the U.S. jumped to a record 35.2 weeks in September, up from 16.5 weeks when the recession began in December 2010, according to the Labor Dept. Today, almost half of unemployed Americans have been out of work for 47 weeks or more (the official definition of long-term unemployment), vs. 30 percent in June 2009.
Industries with highly perishable skill sets include health-care technology, telecommunications, and finance, where regulations have changed dramatically in the past year. The toughest, though, may be information technology. Companies in that sector have cut payrolls for 32 of the last 33 months, through June, for a cumulative loss of some 312,000 jobs, or about 10 percent. In technology, "if you've been out of work for a year or two, you're probably somewhat outdated," says Shami Khorana, president of HCL America, the U.S. arm of New Delhi-based HCL Technologies, which employs about 5,000 workers in the U.S. He plans to hire at least an additional 600 people as the economy improves and anticipates retraining some candidates with obsolete skills.
Unemployed workers in construction, retail, low-level health-care jobs, and teaching are more likely to be attractive to employers once hiring picks up because such jobs don't change as quickly, experts say. "You don't get the sense that residential construction has changed that much in the past decade," says Harry J. Holzer, an economist at Georgetown University and the Urban Institute in Washington. The skills needed to work at a grocery or clothing store—running the cash register, for instance—are "rudimentary," he says.
There are downsides to switching careers, because doing so can push workers into fields where their training isn't valuable, creating a less skilled workforce, says Daniel S. Hamermesh, a former Labor Dept. official who is now an economist at the University of Texas. "It's tremendously difficult [for workers] to decide when the skill is no longer valuable," he says.
When employers start hiring, they'll want to see prospective employees who have done more than pump out résumés trying to find a new job. Accenture (ACN), for example, will want to see "how the applicants used their time" to stay marketable, says Catherine S. Farley, a Seattle-based managing director at the consulting firm. "Did that person do something to keep their skills fresh?"
The bottom line: As more workers remain jobless for half a year or longer, they risk losing skills needed to get hired.
A sad situation that can cost this country dearly in the end. Solutions need to be proffered up and implemented as soon as possible. But will it be soon enough?
A sad situation that can cost this country dearly in the end. Solutions need to be proffered up and implemented as soon as possible. But will it be soon enough?
