The Multiple Forms of Unemployment

EMInfo Reader: Unemployed candidates appear to be coming at job seeking from different directions. How are some forms of unemployment different from others? 

Dr. Burtnett: The United States Department of Labor, Census Bureau, and other federal agencies divide unemployment into three discernible categories: cyclical, structural, and frictional.

The type of unemployment the general population is most familiar with is cyclical. This occurs when a significant number of workers are furloughed or laid off during periods of economic downturn and recession. This period worsens when downturn period is extended and the damaged demand for goods and services is lengthened. The early days of the COVID19 crisis was a clear example of cyclical unemployment.

Structural unemployment sets in when the nation fails or falls behind in the sustainability of the workforce possessing adequate knowledge and skills needed by employers in the contemporary workplace. The workforce and the demands of employers are simply “out of synch” with each other. Skill adjustments, resulting in new competencies, are often required across various workforce sectors in order for structural unemployment to be corrected

Finally, frictional unemployment occurs when working individuals voluntarily exit employment situations in search of improved or more desirable roles. This category includes individuals who have chosen to leave their work roles temporarily (maternity/paternity leave, medical leave, etc.), and now desire to return to full employment.

Each of the types unemployment described above presents distinctive challenges to the worker transitioning back into the workforce. The more sensitive the search and staffing professional is to the needs of the candidate, the more effective, they will be in facilitating that individual’s personal career development.