In May and June 2009, the Human Capital Institute and Monster Worldwide conducted extensive survey research into the effects of the "Great Recession" on the American workforce. More than 700 companies and almost 5,000 passive and active job-seekers participated. Concurrently, the researchers undertook a thorough review of available research focused on this recession's impact on the workforce. A number of business and thought leaders also expressed their opinions during a series of one-on-one interviews.

When combined, these quantitative and qualitative findings reveal impressions of an American workforce being reshaped by powerful economic forces not seen since the 1940s. The results of our research are likely to hold true, in varying degrees, to countries outside the U.S., especially those where customs and workforce culture are very similar, such as Australia.

Both employees and employers express valid concerns and observations, including:

• Due to older workers delaying retirement, those entering today's workforce will accept jobs for which they are overqualified, stay in entry-level positions longer and face slower career paths. Employees have lowered expectations for rapid career advancement.
• Young workers believe they will find themselves the stewards of their own form of retirement—a self-financed, long-lasting, gradual process.
• Workers of all ages and experience levels appear resentful or fearful of their employers, stressed, and less productive—and potentially distracted by active searches for other employment. They are less loyal, unhappy, and resentful about economic prospects.
• Employers face heightened risk regarding top talent, and are more concerned about attrition of these employees than they were before the recession began.
• Workers and employers agree that pay remains the dominant motivation for American employees, and this motivation is not altered by the recession. Some younger workers appear drawn to opportunities for "service" for the greater good.
• Young workers, especially those representing Generation Y, seem particularly cynical and mistrusting of "Corporate America."
• Many employees are working harder as a result of their belief that management has exploited the recession and become less tolerant of challenges to authority.
• Employers have benefited from the swing of the labor market pendulum, many workers admit that they are "just happy to have a job" in this recession.

Is there a light at the end of the tunnel? Many workers are using this downturn to learn new skills and prepare for career changes, or to develop their own self-employment or freelance opportunities. They have faith that technology and small business entrepreneurs—not just government actions—will help the economy recover. And employers who can convincingly offer workers job security might be able to out-recruit and out-retain their competition later.

For employers, caution remains key, even as the economy improves. They must pay attention even to short-term shifts in workforce attitudes during this rough period, or face the possibility of a broad employee exodus when conditions stabilize.

At least in the short term, our research clearly shows that workers of all ages and at all levels are highly stressed. They appear suspicious, resentful and even fearful of their employers, to the extent that they are, in some cases, less productive at work and in most cases, actively seeking work elsewhere. Organizations that ignore these warning signs are likely to be harmed as the recession recedes.

It would appear that even in the best case scenario, many workers will jump ship as soon as the job market rebounds — particularly in organizations that suspend good talent-management practices during the recession.

If there is a bottom line, it is this: Through all economic cycles, the best organizations continue to pay attention to talent management and employee engagement, even when they are required to downsize. The best performing organizations keep in mind the economic recovery while making the necessary adjustments to survive the recession.

[In July, HCI and Monster Worldwide will publish a three part series on the impact of the Great Recession. The research will be available at www.hci.org. This article contains excerpts from the research.]