In today's hyper-paced, cost-conscience world, jobs can disappear in a flash, as we've seen in the past year.

An article on the MS-NBC's site from yesterday, subtitled "In the modern economy, industries vanish and it takes time to replace them" captures todays' world of work well. 

Labor market dynamics have changed dramatically in the past two decades.  In previous generations, mutual employer/employee loyalty helped to fuse together years of long-term employment at a single employer.  That world has gone virtually extinct in today's new short-term thinking, combined with today's economic challenges.  In today's world, productivity, performance, and the immediate economic landscape rule the day.

Today, "Most forecasts predict that Americans are in for a long, painful slog as they try to get back to work. Some forecasts don't have the unemployment rate getting back to "normal" levels of around 5 percent until 2014." We concur with this assessment.

That's not a pretty picture, but one that we have to anticipate as we consider two major forces: a fundamental change in employee/employer dynamics, and a very weak economic landscape.

While the employment rate actually dropped 0.1% in July, don't be fooled; that was just a statistical artifact of people dropping out of the labor force, not the beginning of a labor market resurgence.  The labor market always lags the overall recovery, so don't expect a sustainable improvement until the economy starts recovering and employers feels safe enough to start hiring again.

According the Watson Wyatt report "Effect of the Economic Crisis on HR Programs-- Update: April 2009,"  the worst may be over in terms of corporate cutbacks.  This doesn't mean we're "out of the woods" yet, but or at least a majority of firms surveyed believe they are done with making cuts to salary budgets, freezing pay, doing additional layoffs, etc.

Despite this encouraging information, it may well be too early to call a "bottom" to this economic cycle, and especially to the labor market, which tends to lag the overall economy anyway.

According to the Watson Wyatt study, it does appear as though many, if not most firms believe they are done, or nearly so, with making additional cutbacks.  For instance, according to a SHRM summary of the study, the majority of participating firms said they planned:

• No further salary reductions (89 percent).
• No further salary freezes (76 percent).
• No further hiring freezes (67 percent).
• No further organizational restructuring changes (65 percent).
• No further layoffs (53 percent).

We don't know if we're at the bottom yet, but it looks like we're at least starting to get close.  It is possible that maybe the worst is over, but only time will tell if that's the case. Keep your eye on weekly unemployment claims (which tend to peak 2-3 months before an economic upswing starts), a bottom in housing (not yet!), and improved consumer confidence. Consumer confidence has recently turned upward, but from a very low level, so its too early to say we've turned the corner yet in this area.

Does that mean it's off to the races, once a recovery starts?  That's highly unlikely, and the almost no one is predicting any significant economic recovery before 2010, with the labor market recovery trailing the rest of the economy upwards.  But, it does look like we are starting to near to a bottom, and that would be a good thing for just about everyone.