Fall 2014 Hiring Outlook: Regional Report and Challenges

Fall is here and with it comes hiring and staffing challenges. With kids back in school, population in college towns growing, internships completing and the need to start recruiting for holiday jobs, small businesses face a number of challenges that differ from winter, spring and summer.

In addition to that, the ongoing hiring struggles that each industry and region faces, make it a busy time for employers, HR professionals and recruiters. While some metropolitan areas are still struggling to create jobs, a growing number of cities and employers are beginning to face the one downside of continued economic expansion: labor shortages.

For long-time job seekers still struggling to find employment, the idea of labor shortages may seem laughable, but in a new survey 77 percent of human resource executives polled said their companies were having difficulty filling open positions due to a shortage of available talent.

“Despite a slow and uneven recovery, the economy has finally regained the 8.7 million jobs lost due to the Great Recession and the national unemployment rate has fallen to just over six percent. Many cities are already at full employment, with jobless rates well below five percent. With monthly job gains expected to remain steady in the foreseeable future, unemployment will keep falling and the competition for workers will keep growing,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc., the global outplacement consultancy that conducted the survey.

Labor Shortage Affecting Hiring

Workers with technology skills appear to the toughest to find, according to the survey of approximately 100 human resources executives in a variety of industries nationwide. Forty-five percent of respondents said they were having the most difficulty filling technology and technical job openings; a broad category that could include anything from software engineers to medical technicians.

“It’s not just the tech firms like Microsoft and Google that need people with these skills. Virtually every industry is technology dependent in one way or another and they all need workers who can manage, operate and repair that technology,” said Challenger.

“And, this is really just the beginning of the problem. As nearly 91 percent of respondents noted, if the economy continues to expand at its current rate, the war for talent will get worse. One need only look at the most recent data from the U.S. Bureau of Labor Statistics to see that employment situation is improving monthly,” he added.

Over the last year, payrolls have grown by an average of 214,000 new jobs per month. Since February, though, that pace has quickened to an average of 244,000 new jobs created each month.

In May, the number of Americans on US payrolls finally returned to pre-recession levels, surpassing the 138,365,000 employed in January 2008. That was the last month to see payroll gains before 23 months of consecutive months of job losses stripped the economy of nearly 8.7 million jobs.

In addition to the increased hiring, the number of job openings is also on the rise. In June, the latest month for which data, is available, employers reported having 4,671,000 job openings at the end of the month.

Some areas of the country are already near full employment. As of June, there were 74 metropolitan areas with an unemployment rate below 5.0 percent, which is considered by many to be the natural rate of unemployment.

Growing competition for employment in areas with high unemployment

However, the struggle to find workers does not exist only in those areas with low unemployment. An article appearing last month in Crain’s Detroit Business described the growing competition for accountants in the city that is still experiencing 9.2 percent unemployment. The dearth of available talent in this particular profession has some accounting firms offering current employees $5,000 referral bonuses, according to the article.

Finance jobs were the second leading job category facing talent shortages in the Challenger survey, with 30 percent of respondents indicating these positions were toughest to fill. Like some of the Detroit accounting firms, about 36 percent of survey respondents are offering referral bonuses to existing employees. Another 36 percent are trying to attract out-of-town talent by offering relocation assistance. Surprisingly, about half of those surveyed said their companies are not yet offering any special incentives to attract candidates. That may soon change, however, if labor shortages continue to worse as most predict.

Workers showed diminished optimism in August according to the August Randstad U.S. Employee Confidence Index . For example, four in 10 workers believe there are fewer jobs available, and nearly one-quarter (24 percent) say they are not confident in their ability to find them.

However, confidence levels regarding their current employment situation remain high. The clear majority (74 percent) of workers believe it is not likely they will lose their job in the next 12 months. In addition, 61 percent of employees are confident in the future of their current employer, and more than five in 10 (53 percent) workers say it is not likely they will look for another job in the next year.

“Workers’ confidence reached all-time highs during the big accelerations in job growth, the unemployment rate fell markedly and hiring diversified across more industries,” said Jim Link, Chief HR Officer, Randstad North America. “While still showing steady growth, more tempered jobs reports in recent months have translated into a slight reduction in employee confidence levels, although nowhere near the low in October one year ago. The bottom line is the economy is still climbing upward. In fact, July marked the sixth straight month of employment growth above 200,000.

“While we expect to see slight dips and bumps in employee confidence levels in response to monthly employment indicators, the overall sentiment remains fairly positive and at higher levels than we have seen over the past four years,” continued Link. “Businesses aren’t about to hit the brakes on hiring as indicated by a number of reports. The nation’s largest small-business lobbying group says employment has risen 10 consecutive months for the first time since 2006. And a weekly report that tracks how many people apply for jobless benefits recently hit a 14-year low.”

Regional Employment outlooks

Robert Half, the world’s first and largest specialized staffing firm, created The Professional Employment Forecast. Conducted by an independent research firm, this report provides local results based on interviews with 100 CFOs from a stratified random sample of companies with 20 or more employees. Here are the results from San Francsico, Chicago and New York, three large cities with a wide variety of industry and hiring needs:

San Francisco Employment Outlook

CFOs were asked, “What are your company’s hiring plans for full-time professional-level employees in the next six months?” Their responses:

  • Expanding – adding new positions – 16%
  • Maintaining – only filling vacated positions – 77%
  • Freezing – not filling vacated positions or creating new ones – 7%

“Businesses in the Bay Area are seeking skilled talent, particularly financial and technology professionals as well as administrative professionals with senior-level experience,” said Sharon Black, senior district president for Robert Half in the San Francisco Bay Area. “Firms in the technology and software, construction, healthcare, and financial services sectors are particularly active.”

Recruiting Challenges

The survey results suggest organizations looking to expand and add staff may face difficulties. The majority of CFOs surveyed, 64 percent, said it is at least somewhat challenging to find skilled candidates for professional-level positions today.

Business Confidence

Executives are optimistic about their business prospects. Ninety-four percent of CFOs expressed confidence in their company’s growth potential for the next six months, with nearly half of respondents (49 percent) saying they are very confident.

Spotlight on Salary Negotiations

In another sign the job market is heating up, many employers appear to be negotiating more frequently with top job candidates. Forty-eight percent of respondents said they’re more willing to negotiate salaries than they were 12 months ago, compared to just 4 percent who are less willing.

Chicago Employment Outlook

CFOs were asked, “What are your company’s hiring plans for full-time professional-level employees in the next six months?” Their responses:

  • Expanding – adding new positions – 9%
  • Maintaining – only filling vacated positions – 79%
  • Freezing – not filling vacated positions or creating new ones – 9%
  • Reducing – eliminating positions – 2%
  • Don’t know/no answer – 1%

“Chicago businesses are hiring, particularly in the financial services and healthcare industries, due to additional compliance requirements,” said Marilyn Bird, district president for Robert Half in Chicago. “Demand is high for professional-level candidates with specialized skill sets, especially for staff and senior accountant, controller, and financial and business analyst roles. Employers need to move quickly with the hiring process or they risk losing top candidates to other companies.”

Recruiting Challenges

The survey results suggest organizations looking to expand and add staff may face difficulties. The majority of CFOs surveyed, 68 percent, said it is at least somewhat challenging to find skilled candidates for professional-level positions today.

Business Confidence

Executives are optimistic about their business prospects. More than nine in 10 (92 percent) CFOs expressed confidence in their company’s growth potential for the next six months, with more than half of respondents (48 percent) saying they are very confident.

Spotlight on Salary Negotiations

In another sign the job market is heating up, many employers appear to be negotiating more frequently with top job candidates. Forty-three percent of respondents said they’re more willing to negotiate salaries than they were 12 months ago, compared to just 11 percent who are less willing.

New York Employment Outlook

Executives were asked about their hiring and business outlook, including plans to add professional-level employees, for example, staff in the accounting, human resources, administrative, legal, marketing and information technology fields.

CFOs were asked, “What are your company’s hiring plans for full-time professional-level employees in the next six months?” Their responses:

  • Expanding – adding new positions – 22%
  • Maintaining – only filling vacated positions – 63%
  • Freezing – not filling vacated positions or creating new ones – 10%
  • Reducing – eliminating positions – 5%

“Business confidence influences not only managers but employees as well, and this optimism leads workers who may not have considered looking for a new opportunity previously to start a job search,” said Dawn Fay, district president for Robert Half in New York City. “As these professionals leave, employers who may not have filled a vacant role a few years ago are realizing they do not have that option in this economic climate. This is creating competition for top talent, and all indications are it will continue.”

Recruiting Challenges

The survey results suggest organizations looking to expand and add staff may face difficulties. The majority of CFOs surveyed (73 percent) said it is at least somewhat challenging to find skilled candidates for professional-level positions today.

Business Confidence

Executives are optimistic about their business prospects. Ninety-four percent of CFOs expressed confidence in their company’s growth potential for the next six months, with more than half (56 percent) of respondents saying they are very confident.

Spotlight on Salary Negotiations

In another sign the job market is heating up, many employers appear to be negotiating more frequently with top job candidates. Thirty-nine percent of respondents said they’re more willing to negotiate salaries than they were 12 months ago, compared to just 15 percent who are less willing.

Written by

Matt Krumrie is a career columnist and professional resume writer who has been providing helpful information and resources for job seekers and employers for 15+ years. Learn more about Krumrie via resumesbymatt.com, connect with him on LinkedIn (www.linkedin.com/in/mattkrumrie/) and follow him on Twitter via @MattKrumrie.

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