The Fear of Becoming Unemployable

See the latest issue of Briefings at newsstands or read in our new format here.

By: Arianne Cohen

Ben Broch has everything going for him, except for one thing: a job. He’s an experienced product manager who rose from finance into senior product management during a six-year stint at Amazon. After hopping off the corporate treadmill to try professional life at a smaller company, he took a detour and tried his hand at entrepreneurship. Last summer, funding for his startup fell through, and while the project continues to hum along, Broch is ready to return to corporate life. Except he hasn’t been able to. He’s applied for nearly three dozen jobs over the past six months.

All of which might not be surprising, if Broch were an aging, expensive baby boomer. But he’s just 30 years old, a child of the Clinton years. He’s part of an emerging group of thirty- and fortysomething workers who are smart, well-qualified, and seemingly very hirable—yet decidedly unemployed.

“It’s disheartening. I feel like I should be stronger in my career, and having my pick.”

His example provides an early glimpse of what is turning into a white-collar job-market crisis. Some have called this group “the new unemployables”: a growing cadre of competent, trained candidates who would’ve been snapped up by companies in the past, but who now, through no fault of their own, find themselves without full-time employment for extended periods. They have joined the ranks of the fifty- and sixtysomethings who are also struggling for extended periods to find work. Though Broch voluntarily chose his entrepreneurial role, his unemployable peers often do not. They’re in the wrong spot at the wrong time, forced into unemployment due to acquisitions or downsizing. It’s an acutely painful position for them, like being stuck on the wrong side of a looking glass as they watch their peers busily moving ahead. “Nothing differentiates them from currently employed people,” says David Vied, global sector leader for medical devices and diagnostics at Korn Ferry. “If they’d remained employed, they’d be fine, but they’re not, so they’re in this terrible bubble.”

(click image below to enlarge)

Though the unemployment rate is around 4 percent—within striking distance of all-time lows—job data shows little movement in the labor market from month to month. This year has seen a 15 percent jump in the number of people unemployed for 27 weeks or longer. Put simply, a particular class of workers—people who have never been, and never expected to be, in this jam—has been frozen out of the job market.

The new batch of job hunters differs from their predecessors because they can’t solve their problem by hitting the pavement. Broch’s job search is particularly emblematic: He knows how to apply for a job the right way; in fact, he helps other people do exactly that at the start-up he launched, CoverLetterCopilot.ai, which ensures keyword optimizations by inserting job-listing language into cover letters. His résumés are flawless, and he always reaches out to hiring managers before hitting “apply.” Which is to say that Broch is doing everything right…and yet, he’s slowly accepting that full-time work may not be in the cards for him. “It definitely leads to frustration and discouragement,” he says. He remains confident that things will work out, but to him, the job market can feel like Hollywood, where, as the saying goes, talented young people could die of encouragement—and still not have a gig. 

Experts are still deciphering what’s driving this trend, and how long it might last. Some say it’s a blip, much like the surge in unemployment following the Great Recession of the aughts. But most see it as a permanent alteration in the market that’s being driven by corporate labor shifts, ongoing fallout from pandemic firings, and of course, AI. Many experts also worry that companies may be missing out on talent they badly need. Either way, the question remains: What’s a talented, skilled, but unemployed worker to do?

***

Recruiters sort candidates into informal categories: impossible, difficult, maybe, sure thing. Before this year, many members of this new batch of unemployables were sure things. If they’d found themselves separated from a job in 2012 or 2019, they would simply have called their connections and sent out a dozen résumés; within weeks or months, they would have procured a sparkling new job—possibly even one with higher pay. Nerve-racking? Of course. Terminally devastating? Not at all.

But these days companies operate differently. The pandemic shifted priorities in a once-in-a-generation kind of way. Departments and managers learned to work with less, and sharpened their core functions into chiseled arrows. The result was an ongoing consolidation of roles and teams. Between 2021 and 2023, the recession that firms were expecting never hit, yet they’d already altered their hiring practices in anticipation, trimming or freezing any functions that didn’t scream “totally essential.” Some roles were reduced, and others were eliminated altogether.

Nowhere is this more visible than in marketing, where budgets are down 15 percent from last year, a fulfillment of the longtime dream of the many CFOs who have historically resisted spending in this area. It’s also visible in professional services, such as at the consulting firms that have thinned out their junior and middle levels to such a degree that their staffing chart is no longer a pyramid—just a wide base, with bubbles of middle managers and executives floating above it. Critically, organizations aren’t refilling those trimmed roles. Instead, they’re “hiring differently” to “leverage efficiencies and AI,” while asking staff to “learn to do with less.” Though money-saving is still a primary motivation, many firms remember the layoffs of the pandemic era; they’re wary of more brand damage, and hesitant to commit to full-time roles. The situation has been further exacerbated by the employed workers who, understandably, have decided to stay in their secure existing roles, rather than enter the precarious job market.

Even in the best of circumstances, recruiters are seeing hiring delays on the corporate side, often due to the more extensive skill and background checks that an increasingly complicated business environment calls for. The process of moving from application to offer, which used to take just four to six weeks, now requires as many as 12 weeks, says Stephen Greet, CEO of job-search tool BeamJobs. “It can be difficult and frustrating,” he says.

AI, the newest power player in corporate accounting, has only poured gasoline onto the fire. Even if AI’s true impact hasn’t hit the workplace, the bills are rolling in: Some $300 billion will be spent on AI hardware in 2024, according to an analysis by Sequoia Capital. Investors have put $330 billion into AI and machine-learning startups over the past three years, according to Pitchbook; from April to June, fully half of all start-up financing went to AI firms. The government itself has joined the party, with a bipartisan congressional plan last May allocating $32 billion in annual spending to government and private-sector AI. The same organizations that were caught unprepared by the internet are determined to invest early and often in AI, and the big spending has already cost many people their jobs. That includes Darren Schafae, the CEO of a small AI firm that was deflated when ChatGPT exploded onto the market and devoured his firm’s business. Over the past year, as he’s searched for a full-time job, he’s had plenty of time to ponder how fast his world shattered. “Twenty-plus years of building relationships, and…” His voice, as he describes OpenAI’s effects on his business, trails away. “I’ve never seen anything like that.”

Schafae is applying for jobs at the same large corporations that are spending big on AI. The money for these expenditures has to come from somewhere, which means smaller budgets for in-house departments like marketing, and less funding for the now-eliminated director-level roles of yore for which Schafae would once have been a shoo-in. Press releases from these firms, in which they tout their AI innovations, can also be read as obituaries for the many careers the technology could make obsolete, including data analysis, administration, simple contract generation, basic financial reporting, marketing, content generation, and image creation. Ariel Schur, CEO of ABS Staffing Solutions, has experienced it in waves: First to be unemployed were customer service and data-entry candidates, then finance and marketing. The fall and winter hiring seasons were some of the slowest she’s ever seen in over two decades of work. “I don’t know that applicants were anticipating it,” she says.

***

While earnings reports discuss “shifting labor preferences,” those stuck on the wrong side of those preferences are suffering. “It’s kind of lonely,” says Schafae. “I remember my first jobs, and it was just so easy: I applied, and got a call back right away. And I can’t imagine that I’m any less experienced or qualified now, yet that’s just not the way it is.” He’s carefully chosen the 15 jobs he’s applied for, aiming for the best possible fit—and he’s heard crickets. He’d been intending to say goodbye to the entrepreneurial lifestyle and transition to W-2 work anyway. “I just have a really young family right now,” he says, “and I’m constantly working till two o’clock in the morning.”

Experts say that today’s unemployables carry a heavy psychological load. Long-term unemployment correlates with rates of clinical depression that are two to three times higher than those in the general population, as well high levels of anxiety and substance misuse, says organizational psychologist Cathleen Swody, managing partner at Foster Talent Consulting. She notes that achievement-oriented types in particular tend to struggle. “It’s not good,” she says, especially in the US, where jobs are closely tied to identity, and people can experience a lot of guilt and shame. “It puts them on unstable ground psychologically.” Finding employment doesn’t make the health risks disappear, either. A 2022 study published in the Journal of Aging and Health found that the length of one’s unemployment during one’s 20s, 30s, and 40s is predictive of physical and mental health after age 50. This is likely because unemployed people frequently prioritize budget over healthcare, even as they isolate themselves from activities and relationships that can keep them physically and psychologically fit.

Longtime recruiters say there are steps to take, including a personal rebranding.

This already precarious mental-health situation is exacerbated by the specter of semi-permanent unemployment. It’s not just a matter of someone’s career being paused. “I’m behind my peers who are moving on with their lives, doing well in their careers, and getting married and starting families,” says Samantha Gerz, 31, who last worked in administration at the University of British Columbia, and has not heard back about any of the 15 university positions for which she’s applied since. “It’s disheartening. I feel like I should be stronger in my career, and having my pick, rather than scrambling to see who might select me, and settling for something I’m not a fit for.”

Gerz—realizing that pounding the pavement won’t necessarily get her a job she actually wants—is essentially describing how hope can fade. “The rug’s been pulled out from under people who are unemployed long-term,” says Swody, “and hope is what pulls them through.” A firm’s hiring managers should be aware of these psychological effects, she says, and focus on a candidate’s skills and potential contributions over their confidence and apparent ambition.

***

To be clear: It’s not too late for anyone. Certainly, for today’s unemployables, who are caught in a loop of unsuccessfully applying for job after job, it might feel that way, career coaches observe. But longtime recruiters can recommend many key steps, from reskilling courses to fresh networking. They also advise people to consider a personal rebranding to fit roles that will always need a human touch. “I encourage everyone—even those still employed—to get two steps ahead on this,” says Schur of ABS Staffing Solutions. She advises seeking training in skills where a human element will always be essential, such as specific types of leadership and critical thinking, and tasks like leading off-sites and managing AI.

Those seeking senior-level jobs should probably give up on flexible work-from-home or remote possibilities. The supply of fully remote job postings has fallen so much that the number of people seeking them exceeds the number of openings—particularly for professional and managerial jobs, says Nick Bloom, an economist at Stanford University. “Most managerial jobs are now hybrid,” he says. The few dependably remote roles—in fields that have embraced working from home, like call centers and data entry—are not at the executive level.

And experts point out that candidates could spare themselves aggravation by sidestepping the application process altogether. Instead, they could propose something new to prospective bosses, like an innovative project or smart technical path forward. Indeed, Broch, who has recently shifted to seeking creative-consulting work, concurs. “At the end of the day, we all gotta get a little scrappy.”

Photo Credits: Gremlin; szefei/Getty Images; Klaus Vedfelt, 4x6/Getty Images; Ferrantraite/Getty Images; emma/Getty Images;