The economy is still creating jobs at a reasonable pace. In fact, companies seem to be hiring with abandon as we enter an unprecedented 11th year of expansion. Let’s take a look into the just released jobs report as leading search consultants from Saenger Associates & Shelli Herman and Associates weigh in!
February 7, 2020 – Employers added 225,000 jobs last month as the U.S. unemployment rate stood at 3.6 percent, according to the most recent U.S. Bureau of Labor Statistics report. The increase exceeds the 164,000 forecast by economists. The January gain is the 112th consecutive month of job growth. The number of unemployed currently stands at 5.9 million.
Hiring slowed somewhat last year amid trade tensions and recession fears, but the job market has proved resilient. Now, with the recent abatement in the trade war, those concerns have eased and hiring has rebounded. A major annual revision showed that 2018 and early 2019 produced more than half a million fewer jobs than previously reported.
“You still have headwinds of tariffs, you still have headwinds of trade uncertainty, but those headwinds have been lessened,” Ellen Zentner, chief United States economist for Morgan Stanley, told the New York Times.
Where Job Growth Occurred
In January, construction employment rose by 44,000. Most of the gain occurred in specialty trade contractors, with increases in both the residential (+18,000) and nonresidential (+17,000) components. Construction added an average of 12,000 jobs per month in 2019.
Healthcare added 36,000 jobs in January, with gains in ambulatory health care services (+23,000) and hospitals (+10,000). Healthcare has added 361,000 jobs over the past 12 months.
Employment in transportation and warehousing increased by 28,000 in January. Job gains occurred in couriers and messengers (+14,000) and in warehousing and storage (+6,000). Over the year, employment in transportation and warehousing has increased by 106,000.
Employment in leisure and hospitality continued to trend up in January (+36,000). Over the past six months, the industry has added 288,000 jobs.
Employment continued on an upward trend in professional and business services in January (+21,000), increasing by 390,000 over the past 12 months.
Manufacturing employment changed little in January (-12,000) and has shown little movement, on net, over the past 12 months. Motor vehicles and parts lost 11,000 jobs over the month.
Employment in other major industries, including mining, wholesale trade, retail trade, information, financial activities, and government, changed little over the month.
Hiring in 2020
U.S. employers expect the hiring pace to remain steady into the first 90 days of 2020 though regional and industry forecasts are mixed, according to the latest “Employment Outlook Survey,” released by ManpowerGroup. Employers in all U.S. regions and industry sectors said they were expecting headcount to grow. This is the eighth consecutive year of double-digit hiring outlooks in the U.S., according to the survey of more than 11,500 U.S. employers.
Executive Search Firms Expect Revenue Uptick, Continued Growth in 2020
A new year brings a new set of perspectives and priorities. In 2020, search consultants are excited about the possibilities provided by technology, anxious about the economy, and (still) struggling with the talent shortage.
Expectations for 2020 are largely positive but are more modest than in years past, according to Bullhorn’s “Global Recruitment Insights and Data” report. This is likely connected to economic uncertainty with 45 percent expecting a recession in 2020, compared to just 30 percent heading into last year, said the study. Overall, 64 percent of respondents named economic uncertainty as their top macroeconomic challenge for the coming year, up from 49 percent last year.
“Continued concerns over trade uncertainty are leading to some uneven market conditions in the U.S., yet the overall labor market looks resilient heading into the new year,” said Becky Frankiewicz, president of ManpowerGroup North America. “With seven million jobs open for 11 straight months and ongoing positive hiring intentions across all industries, employers need to work harder to match people to the right roles.”
“Companies that want to hire and retain the best talent, should hire for learnability and help people develop new skills for emerging roles,” she said. “Our economic prosperity depends on helping people adapt their skills so companies can compete in a talent scarce economy.”
Related: The Upskilling Deadlock to Continue in 2020
ManpowerGroup interviewed over 58,000 employers in 43 countries and territories to forecast labor market activity in the first quarter of 2020. All participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of March 2020 as compared to the current quarter?” In the ManpowerGroup research for the first quarter of 2020, employers in 42 of 43 countries and territories surveyed said they expect to grow payrolls in the period up to the end of March 2020.
When compared with the previous quarter, hiring plans strengthen in 15 of the 43 countries and territories, while employers in 23 reported weaker hiring prospects, with no change reported in five. In a comparison with last year at this time, employers in 12 countries and territories reported stronger hiring sentiments, while hiring intentions weakened in 26 and were unchanged in five. The strongest labor markets were anticipated in Greece, Japan, Taiwan, the U.S. and Romania, while the weakest hiring activity was expected in Panama, Argentina, Costa Rica, Italy and Spain.
Search Consultants Weigh In
“It’s an excellent candidate’s market with strong demand and smaller supply of the best-qualified managers and executives,” said Gary L. Saenger, president of Saenger Associates, a top executive search firm based in the Los Angeles area. “The demand is almost insatiable,” he said. “The job market is as competitive as I’ve ever seen it in Saenger Associates’ 20 years in business. I don’t see this softening near-term, either, and see no end in sight – barring an international incident.”
Related: Top Executive Jobs for 2020
Mr. Saenger said he urges companies to protect their best talent from their competitors trying to pick off top performers. “It’s time to re-recruit your stars so you can keep them,” he said. “Make sure you’re paying them competitively – more than competitively – and show them your love in some meaningful way.”
“For some time we have been experiencing steady and low levels of unemployment; this makes for tight markets that favor the job seeker,” said Shelli Herman, president of Los Angeles-based Shelli Herman and Associates. “Given the ongoing war for talent with the needed skills both technically and interpersonally at the senior level, filling a role with the best candidate requires a meaningful investment. Generally speaking, this means that employers will increasingly begin to be cautious about how they approach hiring. Despite this, there is still a drive for growth and to ensure professionals are in strategic positions to propel organizations.”
“Employers will still create new positions, fill vacant ones, and continue to evaluate their teams, but they are using care and attentiveness when doing so,” Ms. Herman said. “There is a feeling of restrained hopefulness combined with a concerted effort for employers to get it right the first time when it comes to hiring. The increasing outlay of time and effort needed to find the best person for the role requires employers to thoughtfully approach their hiring needs, define their goals, and weigh their options before they enter the market. Broadly, employers are cautiously optimistic and the hiring trends reflect that.”
Related: Skills Shortages Causing Recruiting Difficulties
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
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