UPDATE: Assessing COVID Impact on Employer Stability

In June we conducted an initial assessment of Employer Failure Risk based on our first available quarterly comparison of “pre-COVID” vs. “in-COVID” business data, looking at the U.S. business universe in April 2020 vs. January 2020 to identify any early trends, patterns or observations in Employer Failure Risk status.At that time we were too early into the pandemic to see marked impact, but now that we have an updated view of the Q2 business database, we’ve repeated our nationwide Employer Stability Risk analysis.

As Workforce Boards across the country struggle to adapt their own operations to remote working and virtual engagement with employers and job seekers, their needs for and use of employer, market and predictive risk data are evolving on a weekly basis:

  • different questions are being asked
  • employer and workforce analysis has been turned sideways by COVID-driven layoffs, bankruptcies, furloughs and terminations;
  • business operations are now being collapsed, and in some industries expanded, based on being classified in an “essential” industry or by their ability (or inability) to shift significant portions of operation to a remote worker model.

Now, with a complete fiscal and calendar quarter of “business in the time of COVID” data available in EconoVue™, we’ve taken another look at Employer Failure Risk segmentation at both the national and individual state levels, comparing the June 30 data to two different time stamps for trending comparison: March 30, 2020 and December 31, 2019, for a pre-COVID and early-COVID view.

Employer Failure Risk Shifts

Looking at the entire U.S. database of employers as of June 30, we’re now beginning to see the expected increases in Employer Failure Risk* as the impact of COVID-19 and related economic pressures have settled in across all aspects of the U.S. business community. 65% of states** showed an increase of employer movement into the High Risk category, and 73% of states experienced a decrease in Low Risk employers, with most movement being from Low to Moderate risk.

*Employer Failure Risk is determined using Dun & Bradstreet’s Financial Stress Score.

**Includes Washington, D.C.

Overall aggregate increases in Employer Failure Risk in Q2 increased by 0.74%, nationally (Figure 1), up from the 0.14% increase we saw in our last analysis of the March 31 data. The Southeast Region showed the greatest aggregate shift in increased risk, while the Western region showed the lowest increase. Interestingly, while having the second lowest overall risk increase across all categories, the Mid-Atlantic also showed the highest increase in employers moving into the High risk classification.

Looking at YTD Employer Failure Risk changes for the first half of 2020, overall Employer Failure Risk has increased by nearly a full percentage point, nationwide (Figure 2).In this six-month analysis, the Southeast Region again shows the greatest shift in increased Employer Failure Risk, and the Mid-Atlantic replacing the Western in having the smallest increase.

Failure Risk Changes by State

Updating our state-level view of Employer Failure Risk, we see increases in the level of failure risk shifts, and in the number of states showing elevated risk. In our Q1 analysis we identified 12 states with a change in any risk segment greater than 0.50%, with the majority of changes representing increased risk.Figure 3 shows the 21 states who have had a change in any risk segment greater than 1.0% YTD as of June 30.

The heat maps in Figure 4 shows the Employer Failure High Risk changes by state from March to June.

Figure 4

Our updated summary analysis presents the changes in Employer Risk at just the highest levels of geographic segmentation.EconoVue™ enables users to conduct their own employer risk assessments and pre/mid COVID analysis in their own specific workforce region footprint, as tightly as zip code level and as specifically as assessing an individual company.

The Urban Explorer / EconoVue

At The Urban Explorer we regularly ingest and evaluate new data to help our EconoVue™ clients gain better visibility into their workforce and economy picture, and we will continue provide impact assessment, trend analysis and enhanced data visualization for insight into COVID-related business dynamics, and for broader Workforce Development support.

In September we’ll be launching our new EconoVue Business Disruption Index.This Index, the EVBDI, is a multi-component algorithm that provides an indexed comparative classification of potential Business Disruption based on current business and economic factors, while including event-specific variable impact data driven by external circumstances such COVID-19, wildfires, hurricanes and other business disruptors.

Designed for and with workforce/economic development practitioners, EconoVue™ is the most intuitive data visualization and business outreach platform for dissecting and understanding the economy at the neighborhood, city, regional and national levels. It combines GIS, visualization tools for regional industry sector trend analysis, business research tools, loyer outreach components and a layoff aversion module featuring filters for finding companies by financial health. For more information please visit us at www.econovue.com.