I was recently asked to talk to a local business network group on the status of the job market from our view as recruiters.
If you are not familiar with Hawthorne Search, we are a focused somewhat boutique search team. Typical searches are in the $50k and up base salary areas. Our efforts are nationwide in scope; with some International efforts (e.g. completed a search in Botswana last year). Approximately 65% of those searches are sales oriented. Our team of recruiters is made up of people who have actual business experience in their industry segments. Collectively we have over 150 years of business background. Half of our team is located in our main office in Wilmington, NC, and the other half are virtual. We cover a range of industries such as Publishing, Media, Online/Interactive, Advertising (agencies & suppliers), Travel, Associations & Non-Profits, and Healthcare & Bio-Tech
So from a recruiters view where are we now? We had noticed that the pace of employment began to slow in Q1 of 2008, and just continued to pick up pace from there. Total unemployment across the US is at over 8.5%, with pockets over 22+%, and over 10% in my home state of North Carolina. By contrast, 2008 which didn’t feel like a good year, had an unemployment rate that reached 5.8%. I’m not sure these numbers tell the complete story as the Labor Department no longer includes “discouraged” workers (not sure how they even measure that) in its unemployment figures. Additionally , the number of “underemployed” are also excluded. This category has those people forced out of full-time employment, and can only find part-time jobs with much lower salaries and benefits. Another measure is that job boards currently have 3.5+ million resumes posted, but even that number is understated since not everyone looking for work has a resume on a job board
But what is surprising in that some segments are still struggling with a shortage of talent, and are still hiring, albeit in a controlled fashion – those positions requiring engineering or medical background are the most common examples. However we do have clients that are still struggling to find experienced, qualified sales leaders in some parts of the country.
If you break the unemployment numbers down, the worst places in nation are in California, Michigan, and parts of South/North Carolina: Imperial County, CA – 24.2%, Monterey, CA – 15.9%, Baraga County , MI – 23.4% up 10.1%, Montmorency, Michigan – 21.2% up 5.4%, and Marion County, SC – 22.4% up 8.5%. The cities with the worst job outlooks are in those states and Florida — Port St. Lucie, Miami–Fort Laud, Cape Coral–Ft. Myers, Naples/Marco Island. California includes: Los Angeles–Long Beach–Santa Ana, Santa Barbara–Santa Maria—Goleta.
Among the best spots to find a job: Yakima & Kennewick, Wash., Anchorage, Alaska, Amarillo, Texas, Sioux Falls, S.D. and most college towns, like a Morgantown, WV which has only a 2.9% unemployment rate.
More importantly, where we are headed from here? First we advise clients and candidates to keep things in perspective – I know some of them don’t remember 1982/83 when we had 12% unemployment AND 10%+ inflation. Many Gen X/Y workers have never gone through down economic times at any point in their job careers.
The most encouraging point is that the next “new thing” is being developed right now in a garage somewhere. We are still getting calls from new start-up companies in need of talent. They may not have the big venture capital backing as others had in the past, but they are open for business and need people.
We also believe the rate of layoffs has slowed. Because a number of large scale layoffs were announced at the end of the 2008 calendar year so companies could include them in their end of year bookkeeping, the ripple effect wasn’t felt until the unemployment filings started in Q1 of 2009. The higher unemployment numbers you are seeing now are a lagging indicator. We think the worst is over.
The good news for clients is that the “War for Talent” which was one of the biggest concerns for business leaders over the last few years has been replaced with bumper crop of “Overqualified” resumes. For our clients, this truly is a unique opportunity. There are people now available, motivated, and probably at a price range that they would never normally have access to in normal economic times. We have also noted much more recent activity and energy from our client base. Not a return to the robust good old hiring times of the recent past, but clear interest and motion.
I also get asked a lot about the impact of the Recovery Act/Stimulus package recently approved at a Federal level. If you look at the Act in more detail you will find four strategic sectors will receive money targeted for job creation, either directly or indirectly:
- Energy (459,000 jobs),
- Infrastructure (377,000),
- Education (250,000)
- Healthcare (244,000)
In more detail, Alternative Energy jobs got a clear boost. There is unprecedented spending on clean energy, including $60 billion in loan guarantees for alternative energy projects such as wind turbines and coal gasification. The money is needed since this “green” sector has been especially hard-hit in since October/November when the downturn hit.
Engineers and tradespeople should see more demand for their services when federal funding reaches their prospective employers. The question is when as government projects rarely move at any great pace. Likewise Construction and Infrastructure spending will be measured in the hundreds of billions of dollars, and so-called shovel-ready projects will receive funding as soon as this spring. The infrastructure stimulus component will include billions of dollars for projects such as public transit, railway repairs, the purchase of hybrid buses, and billons of dollars in school repairs
But here is my concern with all of this stimulus talk as the solution – many of these segments required skilled or advanced educated professionals. There is already a shortage of these people. Many of these professions require a minimum of 2 – 4 years of advanced education. Where does the President and Congress think we’re going to magically grow these trained people from???
I also noted that 2.3 million of the jobs projected by the Obama administration and other components of the stimulus package come from extensions of unemployment benefits, aid to states and tax cuts.
“…..These jobs will be born in diverse industries, including retail, leisure and hospitality, manufacturing, professional and business services, government, financial, wholesale trade, transportation and warehousing, information technology and services, mining and utilities…”
I’m not sure how that provides hope to the unemployed. One area where these new government moves has already helped job growth: Lobbyists. Spending is up over 12% already this year as industries scramble for their portion of the stimulus handout.