The job loss numbers released this morning, as deep as they are, nevertheless support the growing sense among economists and the public that the economy may be in the early stages of a recovery.
“This looks very much like an inflection point,” says Stephen Stanley, chief economist for RBS Securities, who was quoted by Marketwatch this morning. “And the corroborating evidence … all suggest that the pace of layoffs is finally beginning to abate.”
Nevertheless, the 539,000 jobs lost during April pushed the unemployment rate nationally to 8.9 percent. It could have been even higher, but for government hiring in anticipation of the 2010 census.
“It is a sobering toll,” said President Barack Obama, cautioning that, “We should expect further job losses in the months to come.” Still, “The gears of our economic engine do appear to be slowly turning once again,” the President said. “Step by step, we’re beginning to make progress.”
The American people apparently sensed that too. The Conference Board’s consumer confidence Index for April took its biggest jump up in more than year, rising from 26.9 to 39.2. The 5,000 households that were surveyed also showed more optimism about improving business conditions. Those expecting that jobs will continue to decline over the next several months decreased from 41.6 percent to 33.6 percent, while those expecting more jobs increased to 13.9 percent from 7.3 percent.
That confidence was supported by a slight rise in the Monster Index. Though the change is still far below where it was a year ago and not even as high as in February, the Index found that eight of the nine regions in the U.S. had increases. Leisure and hospitality and some increases in banking and finance were the primary drivers to the Monster Index improvement, suggesting that seasonal hiring is probably playing a role in moderating the job losses.
Everyone knows that recruiting is currently in a down cycle, but there is no doubt firms will again need to recruit significantly to fuel growth and replace aging workers.
But do you have a plan that will enable you to explode out of box immediately as the downturn ends?
If you don’t have a feasible recruiting turnaround plan, you may be hurting your organization.
Research shows that the majority of recruiting organizations don’t have a documented recruiting strategy, let alone one specifically developed to deal with a recovery of the macro-economy. While one could argue that it’s difficult to plan when you don’t know exactly when things will improve, such an excuse is just that, an excuse.
Scenario planning, or a what-if analysis, prepares you to handle the turnaround no matter when it occurs.
As a recruiting manager, ask yourself — before one of your senior executives asks you first: keep reading…
Classical Economist Adam Smith
Leading economist Dr. Robert Genetski joined us on April 1 at the ERE Expo 2009 Spring to share his wisdom regarding the current state of the economy.
Genetski began by explaining the classical principles of economics and the factors that dictate how the economy works in modern day society. From there, he proceeded to explain issues that have contributed to our current economic downtown, illuminating exactly how things became as serious as they did.
Of most interest to the audience were Genetski’s predictions on how the economy would affect labor markets in the coming months, the challenges we can still expect to face, and an idea of when we will begin to see the economy recover. Watch these highlights and prepare yourself to take advantage of the inevitable economic recovery.
The New York Times has a great interactive map showing how employment rates are changing across the United States.
I find it striking how the worst problems in employment seem to center around the local areas that support the industries that are the epicenters of this recession: the real estate bubble, automobile manufacturers, etc.
Lots of red…
It’s not news to ERE readers that recruiting is a cyclical business, and that times are tough.
This morning, Indeed released data that they are calling Industry Trends, which compare the current number of online job postings in the United States today with the same data from a year ago. It’s no longer news that there’s fewer jobs out there, but even with that in mind, the numbers are grim.
On the job seeker side, Google searches for the keyword “jobs” had a seasonal dip in December, followed by a huge spike in the new year. At one point in January, they were up over 50% over the historical average, an indication of just how many people are now looking for work. keep reading…
Moody’s Economy.com released a forecast for employment in the United States for the next few years, and USA Today has done a phenomenal job at packaging the data by state and industry in an interactive map.
All of us have a stake in government decisions made to address the current economic climate. Whatever we do, the business community and investors need to see actions on the economy that inspire confidence and optimism to get job growth back on track.
At present, there is an economic stimulus bill under review in the Congress, submitted by the new Administration, that may reach $1 trillion in new spending programs. Are you feeling optimistic yet?
Since the 1980s, the U.S. economy has demonstrated to the world how to stimulate growth and job creation: low taxes, free trade, and low government intervention. For decades, such policies have kept unemployment rates lower in the U.S. compared to almost all first-world, industrial nations.
What happens when governments intervene in economies? Consider two examples:
The worse-than-expected jobs report from the government today has so far done little to stimulate action on the stimulus bill that’s still in the taffy-pulling stage in the U.S. Senate. Even Wall Street pretty much shrugged off the news that 600,000 jobs were lost in January, the most since 1974. At midday the Dow was up 153 points, extending its Thursday rally on the strength of hope the U.S. Senate will approve something by tonight.
The monthly jobs report from the Bureau of Labor Statistics described the U.S. situation in surprisingly gloomy words for bureaucrats. Noting that the unemployment rate rose .4 points in one month — from 7.2 in December to 7.6 percent nationwide at the end of January – the BLS report said in its very first paragraph: “In January, job losses were large and widespread across nearly all major industry sectors.”
The only job categories to show growth were Education and Health Services, up by 54,000 jobs, and Government, which grew by 6,000 jobs. Construction and manufacturing together lost 318,000 jobs.
The 11.6 million Americans now officially out of work represent mostly those still actively looking for work. Discouraged workers who have given up, even temporarily, looking for work, and those working part-time because they can’t find full time jobs come to almost 10 million more. If those workers were counted as part of the unemployed, the unemployment rate would be closer to 15 percent.
In Washington, Senate negotiators have trimmed somewhere between $70 and $80 billion from the stimulus bill, depending on when and to whom reporters were talking. The latest report from the Wall Street Journal says that a bipartisan group was working to get the stimulus bill closer to the $800 billion floor the Administration insists is the minimum it will accept. That would necessitate finding as much as $45 billion more to take out of the bill that by some estimates has mushroomed to $935 billion. However, negotiators expect the final cuts to amount to $100 billion.
There is one bright spot: Oil is down on the New York Mercantile Exchange to under $40 a barrel. That’s the first time since 2005 it has been so low.
I’m not sure how you are feeling these days, but I am tired of the laments about how bad things are. Certainly, this past year has been one of stress for our profession, our economy, and our political systems. Somewhere a window opened and let out the comforts and habits of the 20th century. Many of the things we took for granted – a steady economy, a rising stock market, lower prices, and a booming job market – have changed direction, at least for a while.
Compared to other times and places (for example Iraq, the Great Depression, World War I and II) things are actually pretty good. Most of us have jobs, food, careers, education, and many opportunities. For the unfortunate, there are safety nets and far more programs to assist them than ever before. There is a time for all things and this series of layoffs, downsizing, and recalibrating is as necessary a part of the cycle of life as are the seasons.
Change is a messy, painful, and tiring process but it almost always leads to something better. The changes that will follow this recessionary time will bring renewal and energy to our professional and personal lives. I cannot do much about how your organization is faring or how it deals with change, but I can offer you some tips about coping with your own change process.
Unwanted change causes very definite behavioral patterns to emerge.
Psychologists who have studied and documented the change process describe four distinctive phases we have to pass through to complete a change cycle.
Most fear to even to use the word “depression,” but now is the time for corporate HR to begin thinking about such an eventuality. As most people know, there are two key economic drivers that impact our economy: 1) productivity (product and service output) and 2) employment.
The government has done a great deal recently to boost the productivity (output) of the economy through its trillion-dollar bailout and coordination of merger activity, but freeing up credit and keeping well-known firms alive have not halted job losses in many industries, including those in the housing, mortgage, and financial sectors.
Both government and corporate leaders have under-emphasized the role of the job market in the economic downturn to the point that in my opinion, the time has come that we must consider the real possibility that the job market will move from a recession into a depression.
“Success in almost any field depends more on energy and drive than it does on intelligence. This explains why we have so many stupid leaders.”
“Try not; do.”
We recall a time back in late November 2002 when, out of shear pain and frustration, Howard wrote Recruiting Today: Good People in Difficult Times.
As we read it now, its content and tone seem strangely familiar. We hear the same fear and grief from so many today as in those miserable days gone by. Lost again, adrift in a sea of uncertainty, anguish, and doubt. Revenue, stability, normalcy — once again threatened as we seek a road out, a spit of land where we can rest and think of why so many of our lives have been disrupted. First-time angst for newer recruiters; multiple times for others.
As with most misery, there is pain and that sense of unfairness. The feeling of “why me?” comes to mind. Yet entitled as we are to these dark feelings and tendencies toward self-pity or rage, good news looms in the distance, and his name is Barack Obama. Seeing him just before his victory speech, we could not help feeling that in just the right light and posture, our soon to be president smiles the same smile with which Jack Kennedy warmed, charmed, and challenged us in 1961. That might seem like long ago, but time is meaningless when you are in trouble, and make no mistake — as a country, we are in big trouble.
So despite all that is broken, we have much to celebrate.
As we sit down for Thanksgiving dinner (here in the United States), let us be thankful for the new era that is dawning.
This economic slowdown is not just about the failure of our banking system or of the credit markets. This failure is a symptom of the major changes that are occurring as we enter a new century. The Depression of the 1930s redefined the agriculturally based banking and finance world and made it competitive and efficient for an industrial age.
We are now in a similar period.
Organizations rapidly adjust headcount the moment orders slow. As early as last June, the statistics on Monster, CareerBuilder, and other job boards began to show a decline in postings and traffic. The number of jobs listed on corporate career sites also declined, indicating less demand.
I am not sure if recruiters noticed, but several analysts did. I recently read an analyst’s report that compared several high-tech companies on the number of open positions they had as an indicator of long-term earnings and profit.
Given that analysts are doing this, we should be, too. We should be very sensitive to what our own management is thinking, how orders are shaping up, what the sales team is projecting, and then adjusting our own efforts accordingly.
If you don’t have access to this information you have two ways to get it. First of all, go to your manager and ask him or her for help. They will hopefully share what they can with you or help you find it. Second, cultivate your own sources by making friends with someone in sales or another part of your organization where people have that “inside” information that gives you an early indication of how things are going.
With that information in hand, here are five specific actions you can take to increase the odds of surviving, and even thriving, in this down economy.
Action Item #1: Get in Shape
You can’t make much progress in building credibility with management until your own function is in good shape. Recruiters who saw the signs of a recession could have begun trimming the fat in their processes months ago. Get aligned with your management team and cut when they cut, slow down when they slow down, and show them you are aware and responsible.
Eleven Tril is the equivalent of 9.5 months of our Gross Domestic Product ($14.3 Tril a year), or 2 1/2 months of the world GDP! ($54 Tril). And while we are in the throws of a seemingly major recession, there will be a lot of jobs created.
Yes, $11 Tril has been or is planned to be injected mostly into the world banking system, starting with the Bear Stearns bailout in March, and more recently the $700 billion bailout bill passed by Congress. European central banks are contributing an estimated $2.8 Tril, and our own Federal Reserve some $5.6 Tril to offshore banks, mostly in “swaps” (our dollars for their currency) to unclog the world banking system which almost ground to a halt in early October. This will regenerate loaning ability, and letters and lines of credit. While Q4 might be the worst since 1980, this avalanche of money suggests a quick recovery starting in Q1 or Q2 of 2009.
A small percentage will go directly back to taxpayers in a second round of rebates, some to help 3 million subprime “victims” keep their homes. This has spawned a “cottage industry” of loan mitigation and modification services, sadly sometimes employing the same subprime brokers who orchestrated the crisis.
Eleven trillion is a lot of money, and hundreds of thousands of jobs will be created, a lot of them in banks, regulatory authorities to monitor disbursements, and loan modification companies. Yes, many are being laid off, but many will find new jobs created by this massive flow of money.
My suggestion to fellow recruiters looking for new business? “Follow the money.”
What’s worse than losing the presidential election? Winning it three days before the unemployment rate jumps to 6.5 percent after the U.S. economy loses another 240,000 jobs.
That bit of bad news was released by the Bureau of Labor Statistics confirming fears that the economy is in a recession that is only deepening.
Yet for the recruiting industry, Jeremy Eskenazi, founding principal of Riviera Advisors (profile; site), says, “I think this whole recession is different than in the past.”
Two of the banking and financial world’s big names have begun laying off workers, says Bloomberg .com. Word is that 12,000 workers, possibly more, will be axed over the next year. Wednesday, Goldman Sachs Group Inc. began informing some 3,200 employees – 10 percent of its workforce – that they will soon lose their jobs. Citigroup Inc., started issuing notices earlier this week to the first of the 9,100 workers – 2.6 percent – it plans to let go.
Meanwhile, Monster’s Employment Index was down 10 points in October. That’s a 20 percent decline over where the index stood a year ago. The index is a monthly gauge of U.S. online job demand based on a count of online job listings from thousands of corporate and commercial job boards, including Monster (profile; site).
No surprise that hiring has slowed. Outplacement firm Challenger, Gray & Christmas says employers announced another 112,884 job cuts in October.
Friday, the Bureau of Labor Statistics releases its employment counts for October.
This is a strange recession.
It is not affecting employment across the board as many of the past ones have, but rather seems to be targeting specific sectors and types of work. Obviously banking and financial services, but also manufacturing and anyone in a semi-skilled job such as auto workers are especially affected. Needs are pocketed and specific. Talent shortages remain.
Yet, I have had calls from search firms looking for key sales and marketing people, and for R&D talent. Senior HR executives are in demand, especially if they have global experience. Sectors still largely unscathed by the recession – healthcare, gaming, entertainment, pharmaceuticals, and biotech – are still facing talent shortages and global competition.
The growth of global supply chains, increasing automation, and greater process efficiency means we can do more with fewer. New jobs are being created daily, but they all require education and skill beyond that of many current candidates.
This, combined with the different attitudes candidates and employees have about work and about how they live their lives, changes how we recruit and employ people.