Industry Talk

The Recovery Becomes More Broad-Based

2011-06-02T10:01:00.000-07:00

Since the economy began to add jobs around October of last year, the news has been good for professionals and those with four-year college degrees. For those with less than a four-year degree, the news has been stark, with negative job growth continuing even accelerating until April.

In April, the growth of jobs requiring four-year college degrees ground to a halt, whereas job growth began for those with less education as bars, food services establishments, gambling, amusement and recreational facilities staffed up. These are places where people spend money most frequently when there is extra money to be spent.

“As executive recruiters, we like to see the increases in professional-level employment that’s a great short-term indicator for us,” says Rob Romaine, president of MRINetwork. “The fact that job growth has moved beyond the professional ranks, though, is a much more important long-term indicator of growth in the economy. It shows that the 700,000 or so professionals who started jobs since the beginning of the year are now spending the money they make at other businesses.”

Many professional positions are said to create as many as two or three additional jobs in their community. This isn’t just because of the money they spend on food, entertainment or consumer goods, but also because their employers spend money on office cleaning services, office equipment and furniture, health insurance and 401(k) plans. Employees at each of those companies then spend their earnings, also creating more jobs, and slowly the economy recovers.

In total, 244,000 jobs were created in April according to the Labor Department a strong gain by any measure. Yet, the unemployment rate increased by two tenths of a percent in the month. While many jobs were added, even more people who had given up on finding work started searching again. Although it is a common post-recession phenomenon, it has taken longer than usual to appear during this recovery.

“Demand for the top candidates, those who either never lost work or were quickly picked up if they were laid off, is as high as ever now that employers are in a hiring mode. And now that employees are moving away from their survival mindset, we are seeing candidates become available who hadn’t been for the last several years,” notes Romaine.

The top candidates are strategic and career-minded, and weren’t going to change jobs in the midst of a recession not only because the job they would have moved to may be less secure, but also because the bump in pay likely wouldn’t have been worth it. The U.S. quit rate bottomed out at 1.1 percent in January 2010 and has since rebounded to 1.5 percent, its highest reading since the beginning of 2009.

“Today, employers are using more attractive offers to lure candidates than we have seen in years,” says Romaine, “Those employers who are willing to make the investment are going to bring top talent into their organizations at the best possible time to drive growth.”

The Divide Between Those With and Without a Four-Year Degree Deepens

2011-03-16T12:46:00.000-07:00

UNITED STATES
The Divide Between Those With and Without a Four-Year Degree Deepens

Sir Alan Michael Sugar is one of the wealthiest men in England and fills Donald Trump’s seat for the UK version of The Apprentice. He dropped out of school at 16. John Mackey, founder of Whole Foods Market, went to college, but dropped out six times. The relationships of Microsoft’s Bill Gates and Facebook’s Mark Zuckerberg with Harvard are nearly legendary, and neither story includes a four-year degree.

At the beginning of this century, there was a widely held belief that four-year degrees were becoming unnecessary for success. Of the five wealthiest people in the world in 2000, only one, Warren Buffett, held a college degree. “Academic” was a dirty word. “B-School thinking” wasn’t a compliment.

Of the nearly 14 million people unemployed in January of this year, about 12 million didn’t have four-year degrees either.

“There are two dramatically different pictures among the unemployed and it can be difficult to reconcile them,” says Rob Romaine, president of MRINetwork. “The unemployment rate for those with a four-year degree is down to 4.2 percent, nearly half the national average. Employers who are trying to hire college-educated workers are seeing the difficulty.”

January’s unemployment figures were widely seen as a disappointment. The unemployment rate fell from 9.4 to 9 percent, yet, with only 34,000 jobs created, the rate drop was driven by the more than half a million people who stopped looking for a job during the month. For those with a four-year degree, the unemployment rate also dropped— from 4.8 to 4.2 percent—but its decline was the result of 227,000 new jobs that were created.

“Job losses during the recession didn’t spare anyone. MBA holders were taking to the streets looking for work like everyone else,” notes Romaine. “Yet, as companies have begun to rehire, they are almost entirely hiring for positions that require four-year degrees or better. If employers are looking at a 9 percent unemployment rate and expecting they’ll be able to find high-quality candidates, they are going to be surprised when trying to find a CPA, a network administrator or any type of engineer.”

Over the last decade, total U.S. employment has grown by a meager 1.5 percent—cumulatively. Over the same time, U.S. employment for those with a four-year degree has grown by more than 20 percent.

“This isn’t a short-term situation. We are an advanced economy that requires an increasing number of workers with advanced skills in order to grow,” says Romaine.

Of the approximately 700,000 jobs created in the last 12 months, virtually all of them required college degrees. Most interestingly, the rate of growth of this workforce is slipping. In 2010, the total number of four-year degree holders in the U.S. workforce increased by only 364,000, nearly a quarter million fewer than were added in 2004, the previous low-water mark of the last twenty years.

“In a situation like this, the employment market becomes much more closed off. Employers avoid publicly advertising many positions, not wanting to deal with the flood of unqualified resumes. At the same time, top candidates avoid publicly posted positions, not wanting to take part in the cattle call,” says Romaine. “This means that networking, creating candidate pipelines, and developing relationships with recruiters become the only surefire methods for companies to fully access the market’s available talent.”

Analysis of the BLS Employment Situation Report

2011-03-16T12:44:00.001-07:00

MRINetwork Analysis of the BLS Employment Situation Report
February 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

This morning, the Labor Department reported that the U.S. unemployment rate fell from 9.0 to 8.9 percent in February. The private sector added 222,000 jobs, while the state and local level governments shed 30,000 positions. The gains were in line with economists’ estimates, and combined with positive revisions to the data of previous months, mark a sizable improvement in the rate of recovery to the labor market. This improvement is being strongly driven by those with four-year degrees, a segment of the population in which employment rose by 266,000 positions in February after having added 227,000 in January, a month where there were 63,000 net job gains.

The management, professional and related occupation unemployment rate fell from 4.8 to 4.4 percent year-over-year. The unemployment rate for construction and extraction related occupations—traditionally high in the winter—fell from 26.5 percent from a year ago to 22 percent this February. The sales and related occupations unemployment rate also fell from 10.2 to 9.0 percent year-over-year.

By industry, job growth was well distributed with gains in several industries said to be harbingers of wider economic growth, such as construction, 33,000, durable goods manufacturing, 30,000, transportation and warehousing, 22,000, and accommodations and food service, 15,500. Health care also continued to grow, adding 34,000 jobs during the month and nearly a quarter million jobs in the last year.

A sustained growth rate of approximately 200,000 positions per month is what the U.S. needs to make up for population gains to see a gradual, fundamental reduction in the unemployment rate. Revisions show that in three of the last five months we have very nearly approached that level and there is every reason to expect that such growth will continue in the near term. Job growth, however, is only taking place among workers with some college and mostly those with four-year degrees and higher. For workers without any higher education, the employment picture isn’t changing as fast. Among the long-term unemployed, this barrier to entry will continue to be an issue. The average length of unemployment reached 37.1 weeks in February, an increase of 7.3 weeks from a year ago.

FORGOTTEN BOOMERS AGAIN LOOKING TO RETIREMENT POST-RECESSION

2011-01-21T08:15:00.000-08:00

FORGOTTEN BOOMERS AGAIN LOOKING TO RETIREMENT POST-RECESSION: That’s bad news for employers who’ve neglected succession planning, says MRINetwork®

The first of 78 million baby boomers turned sixty four years ago, and 2008 was supposed to see a huge number of retirements. But then the economy faltered, housing values plummeted, retirement portfolios shrank, and boomers who thought they had planned for financial security decided to postpone retirement for a few years. Now that those boomers are turning 64 and the economy is recovering, employers better start giving serious thought to the wave of retirements that is sure to come – if not this year, soon, predicts MRINetwork®, one of the world’s largest search and recruitment organizations.

“When the first boomer began to draw benefits, the Social Security Administration dubbed it the start of ‘America's silver tsunami,’” says Tony McKinnon, president of MRINetwork. “It didn’t happen at that time, but it may be happening soon. And while it may not be a tsunami, it will surely cause some major turbulence in the workforce.”

McKinnon observes that the recent preoccupation with a struggling economy and high unemployment rates has obscured the fact that demographics affecting the workplace haven’t changed. “As far back as 1960, the American economy has benefited from the strong growth of the 20-to-64 age group, historically considered the primary source of the labor force,” he says. “A demographic shift, however, is already underway that will result in a large increase in the 65-and-over age group and a decline of the 20-to-64 age group.”

The U.S. Bureau of Labor Statistics (BLS), McKinnon notes, projects a labor force of 162.3 million individuals in 2012 and expects that the economy will require 165.3 million jobs to be filled, which translates into a significant shortage of workers. “This will have a huge impact on hiring in the years ahead,” says McKinnon. “Companies need to be aware of this and take action as the search for top talent becomes highly competitive once again.”

Statistics are already coming in from a variety of industries saying that large numbers of their senior management will be retiring soon. The C-suites of several large financial institutions have been replaced over the last couple of years, for example, and many senior executives of regional and community banks across the country have already been in their positions for some time. By 2016, it’s expected that more than half of today’s bank CEOs will be retired. It’s unclear whether succession plans are in place to ensure seamless transitions.

Companies that come up with the right questions now and craft a long-term comprehensive strategy now will not only survive the wave of boomer retirements, but will more importantly have the potential to ride its crest, says McKinnon. “Understanding the immediacy of the baby boom exit and thoughtfully preparing for it will put them in the best position to achieve success.” He suggests that organizations ask the following questions:

• What are your company’s demographics (age, gender, position, years in position and anniversary date)
• What are your company’s retirement policies? Is early retirement encouraged or discouraged?
• What mechanisms and programs must be put in place now to capture key competencies and critical work knowledge of employees who will be retiring?
• Demographic trends show that you may be faced with large groups of both very young workers and very old workers. Will these two groups have different learning needs? Are you prepared to customize your current programs?
• What is the gender breakdown by position? Do specific positions have gender imbalances? Are there programs to correct these imbalances?
• Will your organization need to increase its reliance on new immigrants?
• If your organization is offshoring, what is the age breakdown of your overseas partners?
• Will your offshoring partners face a labor shortage that may impact their ability to provide services?
• Is your organization positioned to meet the needs of the over-65 customer segment? How will this change your business? What new skills and competencies will this change require?

“Most people don’t want to work forever,” concludes McKinnon. “They may have been forced to stay around for a few extra years, but planning on people to remain after retirement isn’t a succession plan.”

Provided by MRINetwork

Workforce Managers Prepare for a New Year in a New Economy

2011-01-21T08:12:00.000-08:00

Workforce Managers Prepare for a New Year in a New Economy

As the clock struck midnight on December 31, it marked the end of the first year since 2007 in which the U.S. unemployment rate had shrunk. Corporate profits have reached record highs and the Dow Jones Industrial Average rose for its second year in a row, mounting nearly an 80 percent gain since its low in the spring of 2009. In fact, on an annual basis, almost every major economic indicator has either improved or outright rebounded.

Amid all these measures though, commentators are talking about new ones. There is the unemployment rate, and then there is the “real unemployment rate.” There is the performance of the economy, and there is the performance of the “real economy.” Rather than meaning that the traditional unemployment rate, or the traditional economy is unreal, this trend more accurately shows for disconnect for many people between the positive economic data and what they see in the real world.

“We’re in a recovery phase coming out of a deep hole. Conditions are improving, but we still haven’t returned to where we were before the recession and if you entered the workforce after the early 1980’s, this likely isn’t a familiar feeling,” says Rob Romaine, president of MRINetwork.

Companies have been forced to find ways to produce the same products or services with fewer staff. Now that cuts are made, though, demand will have to exceed pre-recession levels, before headcounts can surpass to their past peaks. If Federal Reserve estimates come to fruition, GDP will grow between 3 and 3.6 percent by 2011’s fourth quarter but total U.S. unemployment may still remain over 9 percent. Full employment, as was last seen in 2007, could still be years away.

“A steady recovery over a period of years means that the growth, and the economy has a foundation to build upon,” notes Romaine. “While the recovery might feel slow, especially for those who are unemployed, or whose friends and colleagues are, but considering the depth, we have actually seen better employment recovery than in recent downturns.”

Understanding that heightened unemployment isn’t a short term situation, but that it will be here for a matter of years still offers businesses an opportunity. It means rather than staying in a holding pattern waiting for things to turn around, companies can build strategic plans with unemployment as an assumption.

Since the beginning of the recession, though, higher unemployment still hasn’t translated into easier to find top talent. That dichotomy will continue to be one of the most difficult challenges for workforce managers to balance in the coming years.

“Job postings are receiving, at minimum dozens, if not hundreds of resumes for almost every position. Yet, managers aren’t seeing the quality and caliber they need,” continues Romaine. “These more critical roles are where search professionals have always provided the most value and as much as the economy has been turned on its head, this is one place where things seem to have stayed the same.”

Provided by MRINetwork

September 2010 Employment Analysis

2010-09-30T08:29:00.000-07:00

MRINetwork Analysis of Today's Bureau of Labor Statistics (BLS) Report

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

According to the Labor Department, total U.S. private-sector employment grew by 67,000 positions in August, the eighth consecutive month of job growth. Total U.S. employment fell by 54,000 positions after factoring in government jobs, including 114,000 temporary census workers who were let go. The unemployment rate rose from 9.5 to 9.6 percent, driven mostly by an increase in people who completed temporary work—including census workers—and new entrants, people looking for their first job. In total, nearly three quarters of a million private-sector jobs have been added to the U.S. economy this year.

At last, meaningful improvement is being seen in the length of unemployment. The average length of unemployment has fallen since June from 35.2 to 33.6 weeks. The total number of people unemployed for 27 weeks or more has fallen from 6.8 million in May to 6.3 million in August.

Year-over-year, the management, professional and related occupations unemployment rate has fallen to 5.1 percent from 5.4 percent. The improvement, however, is tempered by a decline of a little over a million workers using the classification, about a 2 percent reduction. Conversely, production occupations have seen the most dramatic year-over-year improvement with unemployment falling from 15.1 to 11.6 percent. Total workers using the classification grew by about 300,000. A large part of this strength likely comes from the automotive industry, which while traditionally shutting down for a month in the summer to retool, did not do so this year because of high demand.

In an interesting, yet not immediately explainable turn of events, the participation rate of those with four-year college degrees over the last three months has dropped from 77.3 to 75.8 percent. This may be the clearest indication yet of the effect of baby boomer retirement and their exodus from the labor market. Such drops in participation have not been seen among workers with lower levels of academic achievement, whose retirements presumably will be delayed further than college graduates.

Brought to you each month by:
Management Recruiters of Plymouth
248-465-0800

It’s That Quantity/Quality Thing Again

2010-09-22T11:25:00.000-07:00

With the sheer size of the U.S. labor market, there really isn’t an easy way to talk about it other than by the numbers. Four-hundred and seventy-three thousand unemployment claims last week, 14.6 million people unemployed in the United States, 46 million workers with bachelor’s degrees in the country. The use of these figures makes workers sound like commodities, easily comparable and easily interchangeable pieces.

Nearly one in ten people who want to work don’t have a job. It would seem that hiring a great candidate would take no more than putting up a help wanted shingle for an afternoon. You might even believe that, unless you’ve tried to hire someone in the last year.

“Regardless of the state of the economy, there is nothing easy about identifying great candidates,” says Tony McKinnon, president of MRINetwork. “Trying to find that impact player who you begin every search looking for, is like trying to find a popular toy on Christmas Eve. You can go to a big toy store with a thousand different options, but that doesn’t make your search any easier.”

The Bureau of Labor Statistics obviously can’t give figures about the quality of workers. They can, however, report on one of the most basic indicators of quality: education. Workers who have completed a bachelor’s degree have an unemployment rate of 4.5 percent, less than half the national average and down .3 percent from just three months ago.

“Employers look at how many applicants there are for every job and assume they’ll be able to have their pick of quality people,” says Mickey Kampsen, president of Management Recruiters of Charlottesville. “What once would have been interviews of a few highly qualified candidates can turn into cattle calls as employers cast wider nets. With so many candidates, more stages are added to the interview process. People who truly are the top candidates aren’t given the personalized attention that would encourage them to take a position. Employers don’t always know how to tango.”

With a 2.2 percent job-opening rate, there are currently nearly four unemployed people for every position. In 2006, when the unemployment rate was 4.4 percent, the job opening rate was 3.3 percent, almost a one to one ratio.

“The truth is that the top candidate you want coming out of a recession is the person who has been battle tested, so by definition, these candidates are usually employed, and they are elusive,” notes McKinnon. “They are often risking the job they already have just by talking to you, and if they don’t feel like they are being personally sought out, their motivation to participate can evaporate and the candidates you are left with aren’t the best you could have had.”

Employee confidence in the job market continues to teeter with shifting news. The recent bounce back of the quit rate from 1.3 to 1.5 percent seems to be remaining stable, though well below its rate from a few years ago. After a .1 percent fall in consumer spending in June helped fuel talk of potential deflation, spending rose .4 percent in July, beating expectations.

“Estimates now say unemployment won’t significantly decrease until mid-2011, but before that happens employers are obviously going to have to ramp-up hiring,” says McKinnon. “The attitude employers take when approaching candidates after such a long downturn is going to be as important as any other factor in the recruiting cycle.”

MRINetwork Analysis of Today's Bureau of Labor Statistics (BLS) Report

2010-03-10T06:55:00.000-08:00

According to the Department of Labor, U.S. non-farm employment fell by 36,000 jobs in February, less than many economists expected. The unemployment rate during the month held steady at 9.7 percent, down from its peak of 10.1 percent in October of last year. The Labor Department also reported that major East Coast storms in February had minimal statistical impact on the report.

Last month, the U.S. Census Department began hiring the first of 1.2 million census takers. Just 15,000 of these jobs were added in February—which was offset by job losses in the postal service—but these job gains should give a significant boost to payroll figures over the next few months. Census jobs, while decent paying—often in the range of $20 per hour—are temporary and most of the survey work will be completed by mid to late summer.

The temporary census workers are not included in the 48,000 new temporary help service jobs added during February. Since the number of temporary workers bottomed out in September, 284,000 positions have been added.

Across industries, the level of total employment was surprisingly stable in most sectors, but with notable exceptions. Construction lost 64,000 positions, transportation and warehousing lost 12,000 positions, the information industry lost 18,000 positions (mostly from publishing, and motion picture and sound recording) and insurance shed 7,600 positions. The losses were offset by the gains in temporary help services and 32,000 health and education jobs. Manufacturing added a statistically insignificant 1,000 jobs. However, with the addition of 11,000 positions in January, it marks the sector’s first back-to-back gains since 2004.

The management, professional and related occupation unemployment rate fell from 5.0 to 4.8 percent, but remains above the 4.6 average rate of 2009 and the 2.1 percent average rate in 2007. The unemployment rate for those with a Bachelor's degree or higher rose to 5.0 percent from 4.9 percent.

In general, today’s report shows employment to be mostly flat. If not for the losses in construction, though, 28,000 positions would have actually been added to the workforce in February. While construction’s losses cannot be ignored, the sector has been disproportionally impacted by the crash in real estate. On the whole, the rest of the economy is showing signs of slight employment growth.

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

MANAGEMENT RECRUITERS OF PLYMOUTH
MRI NETWORK
41000 West Seven Mile Road, Suite 230
Northville, MI 48167 USA
T 248.465.0800
F 248.465.0801
www.mrplymouth.com

A GOOD TIME FOR JOB SEEKERS TO REVITALIZE SEARCH EFFORTS

2010-03-10T06:42:00.000-08:00

2010, the year that economic pundits have been predicting will bring the end of the recession, is finally here. With strong indications that improvement in the economy will intensify over the next few months, job seekers--both employed and unemployed--have an opportunity to increase their chances of success at the start of the New Year, says MRINetwork®, one of the world’s largest search and recruitment organizations.

“Psychologically the beginning of the year is often looked upon as a fresh start – it’s an ideal time for job seekers to devise a strategy and prepare themselves for job openings,” says Tony McKinnon, president of MRINetwork. “Job hunters should take the opportunity to revamp their resumes, to network, and to update their profiles on social networking sites and job boards.”

McKinnon notes that according to the U.S. Bureau of Labor Statistics, January is the strongest hiring month of the year. “Companies want to get their staff in place for the remainder of the year so it’s important to pursue job openings and make connections in January.”

McKinnon offers some tips for pursuing careers in 2010:

1) Update your resume: Review and strengthen your resume in the mindset of "What did I actually achieve in each position?" or "How did that add value to the company?” If possible, quantify achievements in dollars, percentages or timelines.

2) Expand your contact list: Join and participate in a couple of industry associations. Make sure to gather business cards and follow up by phone or email with new contacts.

3) Make sure you are “findable”: Ensure employers and recruiters can find you on social networking web sites such as LinkedIn and on job boards, including CareerBuilder.com and Monster.com.

4) Check your credit score: Make sure your credit score is up to par as more and more companies are checking this during the hiring process.

5) Self assess: Ask yourself “What’s important to me in a new job opportunity?” as you plan your next career move. Factor in type of work, industry, compensation, location, environment and size of company.

6) Improve your networking skills: Professionally network with as many people as possible by contacting current friends and acquaintances, re-connecting with former colleagues and bosses, joining social networking sites such as LinkedIn and Facebook, and attending social gatherings in your business community including free seminars and Chamber of Commerce functions.

7) Improve your physical health: Get yourself into the best physical health as possible and "fluff up" your image. Eating healthy, getting plenty of rest and fitting some exercise into your routine is important so you present the best in body, mind and spirit. “If you’re unemployed, you could be a bit bored, feeling lost and even depressed, and if you're employed, you could very easily be overworked, tired and stressed out,” McKinnon advises.

8) Search for recruiters: Research and contact recruiters specializing in your industry of interest. “If you’re currently employed, send an updated resume with a cover letter expressing that you are not unhappy with your job but would like to be considered for good job opportunities,” says McKinnon.

“Taking these courses of action should both ease a job hunter into an opportunity-seeker mentality and make them easier to find by the people who are searching for a candidate with a unique set of skills in 2010,” notes McKinnon

For more information contact:

MANAGEMENT RECRUITERS OF PLYMOUTH
MRI NETWORK
41000 West Seven Mile Road, Suite 230
Northville, MI 48167 USA
T 248.465.0800
F 248.465.0801
www.mrplymouth.com

Welcome to Industry Talk

2004-11-04T06:39:00.000-08:00

Feel the need to commiserate about the industry as you see it today? Here's your place! Working in the plastics, chemicals, and engineering fields every day I see the same issues you do and can often offer a fresh perspective to the job market, new product development, and hiring trends.

Post to this message with a topic you would like to see discussed and I'll do what I can to add a new post discussing it so that everyone can weigh in with their opinions.