2012 Job Market Perspectives


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2012 Job Market Perspectives

  1. 1. 2012 Job market perspectives
  2. 2. 2011 was a year that was marked byjob growth, albeit not at a pace manyhad hoped for.
  3. 3. 2012 Job market perspectivesGrowing graduallyIn the first part of the year, high non-farm payroll growth took place inFebruary, March and April leading many to believe that the job market wasback on the path to robust growth with job additions in the hundreds ofthousands each month. However, by May, the numbers dropped a bit asconcerns began to arise that the United States economy was preparingfor a double-dip recession.Looking back, we can now see that each month in 2011 something consistently seen throughout 2011, aswas indeed marked by job growth and the nation is evidenced by temporary sector growth of 126,000,not facing a double-dip recession. While August data from January to November 2011. This method hasinitially suggested zero new jobs, it was quickly revised been favored as a way for employers to shape theirthe following month to show the addition of 104,000 workforce based on demand and need in a quickjobs; as of November 2011, job growth has occurred and responsive manner while taking an unevenduring every month of 2011. recovery pattern into account. We believe that other service providing industriesMore significant growth is needed in 2012. will thrive in the coming year, including business andAlthough the economy averaged an addition of professional services, IT and healthcare. We are also132,000 jobs a month in 2011, there is still a long way optimistic that manufacturing will continue its reboundto go to account for the seven million jobs lost since from the recession and jobs will be added.December 2007 — job growth will need to be in thehundreds of thousands each month in 2012. Adecco’s 2012 Job market perspectives report explores both the current and future labor market while lookingThis can be accomplished, but the government and into the key elements that will continue to impactprivate sector will both need to work towards this goal. both the U.S. economy and job market in the nextIn the upcoming election year, more elected officials year and beyond. We hope this report will serve as awill be called upon by their constituents to put political valuable resource to assist you in the optimization ofpartisanship aside and get America working, while your organization in a year that will most assuredly beensuring that the public sector does not continue to one of transition and growth in the right direction.lose more jobs; a pattern seen throughout 2011.In the private sector, employers who have employeesat maximum productivity will need to consider flexibleways to augment their workforce to allow for growth; 3
  4. 4. Key moments in time: 2011 College graduate Japan hit by mas- hiring is expected sive earthquake and to be higher in 2011 tsunami with ripple than in recent years Gain of 68,000 jobs effects felt globally January March May February April June Winter storms lash G ain of 217,000 jobs Riots break out in out from Midwest to Greece over austerity Northeast affecting measures, economic American’s ability to troubles, and high work, or find jobs unemployment rates4
  5. 5. 2012 Job market perspectives President Obama introduces American Jobs Act to aid in get- ting America back to work and providing tax cuts; estimated cost of Act is $447 billion Government narrowly avoids shutdown amidst One year away from spending debate 2012 presidentialG ain of 127,000 jobs in Congress electionJuly September November August October December BLS reports a job Occupy Wall Street Seasonal job growth gain of 0 for the Movement gains paints picture for 2012 month; later revised momentum to 104,000 5
  6. 6. The economy and job market It’s a global economy — for better and worse. The McKinsey Global Institute, the business and Globally, the earthquake and subsequent tsunami that economics research arm of the consulting company, jolted Japan early in 2011 sent a ripple effect through a estimates that for jobs to return to a pre-recession number of economies as production and manufacturing level with unemployment of 5%, the United States will came to a slow crawl for a number of months. On the need to create 21 million net new jobs to account for policy side, European countries like Spain and Greece jobs that have been lost, as well as new entrants into continued to face record high unemployment rates and the labor force. political unrest over financial policies. To accomplish this, there are three scenarios that could While European financial woes and Japanese natural occur: low, medium, or high job growth. Based on this disasters may not have affected the U.S. economy 20 model, net new job growth would look like: years ago, the globalization of the world we live in has led to a magnification of all issues. Just as the United States is impacted by other countries, other countries Job growth are equally — if not more — impacted by dips in the U.S. economy. Number of jobs Jobs created added a month by 2020 Slowly growing the U.S. job market. Low 77,000 9.3 million While 2011 started with robust hiring, normalization in new hiring was seen in a number of sectors by the Medium 145,000 17.4 million middle of the year. For the most part, growth was still High 187,000 22.5 million happening, just at a much slower rate than expected or needed for job recovery. Source: McKinsey Global Institute “An economy One of the terms used frequently in the past year was that works: Job creation and America’s Future” “jobless recovery;” the concept that economic output As of November 2011, the United States was aver- would grow, but it would not immediately generate aging a monthly net new job creation of 132,000 job growth. While some suggest this is taking place, a throughout the year, largely in part of sizeable number of months showcasing strong job growth could month-over-month government job losses. change this belief. As President Obama and many economists have For these much needed gains to take place in 2012, mentioned throughout the year, the possibility for an im- the private sector must add more job seekers to mediate rebound in jobs is something that isn’t possible payrolls. By doing so, the unemployment rate will based on the trends seen in the current recession and decrease, and consumer confidence will increase subsequent recovery time frame — this one will be more — two of the most important elements to rebuilding drawn out, which is a newer trend occurring in modern the economy at a faster pace. recessions. An additional way to spawn growth is through the creation of new businesses. To help this occur President Obama has a number of tax incentives currently in place as well as a number in Act.6
  7. 7. 2012 Job market perspectivesIn the last year, the job market experienced quite a few upsand downs, both globally and nationally. 7
  8. 8. The U.S. political climate Looking back, 2011 will likely be These challenges were underscored by the fact that the 112th Congress was one clearly marked by political remembered as a year where the partisanship over all forms of legislation, and particu- job situation was top of mind for both larly ones relating to budgets and funding. This was evidenced in September 2011 when last minute nego- elected officials and their constituents. tiations and agreements between the Republican and Democratic parties put a temporary end to months of As the cries from home districts became louder and political jockeying to prevent an imminent government louder throughout the year, those in Congress as shutdown. well as President Obama faced greater demands than While job growth continued throughout the year, the ever to revitalize the job market and get Americans slow pace forced President Obama to take a more back to work. visible role in much needed job creation. As a result, in early September, he introduced the American Jobs Act.8
  9. 9. 2012 Job market perspectivesThe Act focuses on key areas including tax cuts and The leisure and hospitality, construction and retailcredits to aid and fuel growth in small businesses; sectors account for the largest percent of jobs today,getting Americans back to work while rebuilding and and will only continue to grow in size within the nextmodernizing the nation; training and education oppor- decade or so.tunities; and payroll tax cuts for middle class America.However, it received mixed reviews, largely in part of the$447 billion price tag that accompanied it. The president “ e’re starting to see business grow in Whas gone on the record making it increasingly clear that professional skills. Engineering has pickedthe act is one of his top priorities and he will work to getit approved piece by piece if needed. As a result, the up dramatically. IT is seeing growth.Republican party is expected to create a piece of rebut- Mortgage-related finance and accountingtal legislation to encourage job growth. jobs have been strong too, because interestIn 2012, the fever pitch around the impending presidential rates are so low and people are refinancing.”election will only continue to grow, with the high unem- Tig Gilliam, Adecco Group North America CEO,ployment rate and need for jobs being the number one Wall Street Journal, January 2011issue on the campaign trail. Government officials willneed to keep in mind that, outside of Washington, D.C.,the focus should be on getting Main Street back to workwithout political partisanship. The McKinsey Global Institute predicts that, basedWhere the job market is growing on its low-, medium- and high-growth situations, health- care could add between 2.8-5.2 million jobs, businessThroughout the recession and the continuing recovery, services 2.4-5.7 million and leisure and hospitalityjob growth has continued to vary greatly from sector 2.1-3.3 million jobs — numbers that are certainlyto sector. necessary for getting the economy back on track.When reviewing net new jobs, a pattern became appar- If we are to see a higher pace of job growth in 2012,ent: the jobs were returning in skilled areas, professional these areas will need to continue to grow to fueland business services (which includes legal, accounting, private sector growth, compensate for governmenttemporary and consulting jobs), and healthcare. In fact, sector losses, and encourage a rebound inhealthcare is the one sector that has consistently added consumer confidence.jobs throughout even the toughest of times. The industryadded 3.7 million jobs in the 2000-2010 decade evenwith two recessions. 9
  10. 10. The increased need for education Throughout the recession — and even more so in the recovery — there has been a constant dialogue around the need for American workers to have more education. Each month, when looking at the Bureau of Labor Statistics’ monthly employment situation, the numbers speak for themselves; in November 2011, the unemployment rate for someone without a high school diploma is 13.2%, while a college graduate faces a much lower rate at 4.4%.10
  11. 11. 2012 Job market perspectivesWhile it seems fairly easy to understand that a collegedegree or technical training can boost one’s careerprospects and income, it may be more than most think.According to the Georgetown University Center onEducation and the Workforce, the range in lifetimeearnings is greatest between high school dropouts andthose with graduate degrees or higher — a range of$1,198,000 to $4,650,000; a difference of $3,452,000.In 2012 and beyond, higher education will become alarger component in the employment story. While highlyeducated Americans will see job prospects return, theMcKinsey Global Institute predicts that only in high jobgrowth circumstances will employment grow significantlyfor those with less than a college education.Additionally, while one could argue that the UnitedStates is producing more college graduates than ever,McKinsey also predicts that, in a high job growthsituation, the workforce of 2020 will be short 1.5 million This trend will most certainly lead to a mismatchcollege degrees. between what the overall workforce needs and whatBased on this information, it is more essential than ever skills employees have. However, if higher educationfor colleges and universities to partner with the private institutions get involved in the process now, moresector and truly gauge what students should be learn- students can be exposed to the skills that will be all buting. It is expected that colleges will produce a signifi- mandatory in 10 years.cantly higher amount of graduates in social sciences, For those in the workforce, now is the time to supple-liberal arts and business than in math, engineering and ment existing skills. An example of this is the manufac-science — some of the sectors that will truly be facing a turing sector — gone are the days of simply maintainingdeficit in talent. a spot on the line; today’s manufacturing jobs require technical knowledge in a wide range of areas. As we look to the future, the workforce and educational systems must prepare current and future workers for the changes in the job market for America to stay competitive with other countries who are adjusting for this shift already. 11
  12. 12. Where the jobs are: Situation overview. Temporary services Throughout 2011, the temporary sector continued to grow. While the extremely high monthly job additions in the sector have slowed a bit, the growth kept up throughout the year and, as of November, 126,000 jobs were added. 2010-2011 change in workforce: Temporary jobs have become such an integral +169,000 jobs part of the recovery as hiring managers turned to the sector as a quick and easy way to modify their Number of American workers: workforces as needed. This trend will continue into 2.3 million 2012 as hiring managers may continue to be cautious around full time permanent hires. Regions in demand: Areas in demand. All Temporary jobs transcend all sectors, but high demand areas include finance, administrative support, healthcare, engineering, and information technology. Source: BLS12
  13. 13. 2012 Job market perspectivesWhere the jobs are: Situation overview.Financial services On the whole, the financial services field is expect- ed to continue growing after a few troublesome years during the recession. While positions and skills can vary, all organizations depend on finan- cial professionals in some way, shape, or form.2010-2011 change in workforce: The growth expected for financial analysts in the-10,000 jobs decade of 2008-2018 is higher than average at 20 percent, and anticipated growth for financialUnemployment rate: manager positions will be average in growth at 86.1 percent percent in the same time frameNumber of American workers: Areas in demand. The movement towards compliance, financial7.6 million policies, risk mitigation and financial performance/ optimization will lead the sector in new job growth.Regions in demand: Positions in the sector will be competitive on twoNortheast, West fronts: analysts, which tend to have lucrative sala- ries, will face competition from a larger applicant pool, while managers will face competition based on a smaller number of positions available in the next decade. Source: BLSAnticipated sector growth by 20183,400,0003,200,0003,000,0002,800,000 05 06 07 08 09 10 11 12 13 14 15 16 17 18 13
  14. 14. Where the jobs are: Situation overview. Engineering Talent will continue to be needed in the engineer- ing sector. While demand will vary based on specialty, green jobs seem to be on the rise. More and more, the line between traditional and green jobs will fade away as organizations look for ways Unemployment rate based on occupation: of making projects more eco-friendly Less than 4.0%-8.0% based Areas in demand. on occupation While demand does vary by region based on 2010-2011 change in workforce: needs, the sector as a whole is expected to continue to see an increase in job demands. +27,500 jobs The specialties seeing the largest increase in the 2008-2018 decade are biomedical engineering Number of American workers: (72 percent increase), environmental engineering (31 percent increase) and civil engineering 1.3 million (24 percent increase). Regions in demand: Source: BLS and NACE West, South “For a lot of our clients, particularly Engineers and engineering technician occupations (2005-2018) those in the Pacific Northwest, it’s becoming increasingly difficult 2,300,000 to separate ‘green’ jobs from mainstream jobs. As more states and businesses turn to green 2,100,000 power generation and sustainable practices, we anticipate that the need and demand for profession- 1,900,000 als with these skills will only 05 06 07 08 09 10 11 12 13 14 15 16 17 18 continue to increase.” Source: Georgetown University Center on education and the Workforce Anticipated Sector Growth by 2018 (source Georgetown University Center on education and the Workforce)14
  15. 15. 2012 Job market perspectivesWhere the jobs are: Situation overview.Manufacturing This sector continues to rebound — data reflective of August 2011 showed that 61 of the nation’s biggest 100 metropolitan areas gained manufacturing jobs in the last year. Detroit, a city hit hard by past sector job losses, emergedUnemployment rate: as the metropolitan area that created the most7.7 percent new manufacturing jobs with Western and Midwestern cities also adding a large amount2010-2011 change in workforce: of new positions.+210,000 jobs Areas in demand. Gone are the days of employees knowing onlyNumber of American workers: one role — today’s manufacturing organizations11.8 million are looking for highly skilled job candidates who know multiple components to a process. ThoseRegions in demand: individuals with well-rounded skills and techno- logical know-how will be in highest demand.Midwest, West, South Source: BLS Situation overview.Legal services From 2008-2018, numerous jobs within the legal sector are expected to grow, with the demand for paralegals expected to increase by 28 percent, lawyers by 13 percent and legal secretaries by 13 percent.2010-2011 change in workforce:-3,100 jobs Areas in demand. The increase in jobs within the sector will mostNumber of American workers: likely come from a variety of sources as more legal transactions, civil disputes and criminal cases1.1 million are expected to occur. Within the sector, those with healthcare, intellectual property, bankruptcy,Regions in demand: corporate, antitrust security litigation and environ-Northeast, West mental law will be in highest demand. Source: BLS 15
  16. 16. Where the jobs are: Situation overview. Healthcare As a result of an aging population and all the legis- lative changes associated with healthcare reform, healthcare is one of the hottest professions — and we expect growth to continue for years to come. Unemployment rate: Areas in demand. 5.2 percent According to the BLS, about 26 percent of all new jobs created in the U.S. economy from now until 2010-2011 change in workforce: 2018 will be in the healthcare and social assis- tance industry. This industry — which includes pub- +322,700 jobs lic and private hospitals, nursing and residential care facilities, and individual and family services Number of American workers: — is expected to grow by 24 percent, or 4 million 14.2 million new jobs. Employment growth will be driven by an aging population and longer life expectancies. Regions in demand: Of the 20 fastest growing occupations in the economy, half are related to healthcare including Midwest, West, South home health aides, physician assistants, physical therapist aides and medical assistants. Source: BLS Situation overview. Information technology As this sector continues to grow rapidly, all positions are expected to grow faster than average with computer software programmers being one of the fastest growing occupations in the 2008-2018 decade. Unemployment rate: Areas in demand. 7.4 percent IT is an integral part of both personal and profes- sional life and the opportunities for growth in this 2010-2011 change in workforce: sector are limitless and wide-ranging. While training and education may vary by position, those with a -54,000 jobs background in computer or technical skills will lead the pack. Number of American workers: The BLS predicts that, in the 2008-2018 decade, 2.6 million computer and information systems managers will see a 17 percent increase in employment, computer Regions in demand: software engineers will see a 34 percent increase West, Northeast and computer network, systems, and database ad- ministrators will see a rate of growth of 30 percent. Sources: BLS, InformationWeek.com16
  17. 17. 2012 Job market perspectivesWhere the jobs are: Situation overview.Accounting The BLS is predicting a 16 percent increase in job openings for accountants by 2016, which is largely attached to the move towards increasing financial oversight requirements such as Sarbanes-Oxley (SOX).2010-2011 change in workforce: Demand will also continue to increase in tax and+43,700 jobs healthcare areas for accountants.Number of American workers: Areas in demand.937,000 After the majority of states instituted the 150-hour rule for Certified Public Accountants, the enroll-Regions in demand: ment in many accounting programs declined, boosting the need for CPAs in all areas of accoun-Northeast, West, Midwest tancy. According to the American Institute for CPAs, nearly 90 percent of accounting firms reported an increased hiring of new graduates, indicating that the need for the public accounting background will continue into the foreseeable future. Source: BLS, American Institute of CPAs 17
  18. 18. 2011 Job market perspectives Regional insights West Northeast Unemployment rate: Unemployment rate: 10.3 percent as of October 2011 8.1 percent as of October 2011 Hot sectors: Hot sectors: Technology, professional services, retail Technology, export trade, education, healthcare, professional services Strongest metropolitan areas: San Francisco, San Jose, Seattle, Boise, Strongest metropolitan areas: Boulder, San Diego Boston, rochester, pittsburgh Midwest South Unemployment rate: Unemployment rate: 8.5 percent as of October 2011 9.0 percent as of October 2011 Hot sectors: Hot sectors: Manufacturing, particularly in Transportation, manufacturing auto-producing manufacturing Strongest metropolitan areas: Strongest metropolitan areas: All of Texas’s major cities, Oklahoma City, New Detroit, Cleveland, Grand Rapids, Orleans, Florida (particularly Miami and Tampa) Omaha, Lansing18 Sources: Moody’s Analytics, BLS
  19. 19. 2012 Job market perspectives Moving forwardWhile 2011 will be remembered as a year of recovery andcautious optimism in the economy, we predict that 2012will be one of transition and upward growth.As we look to the future, American business leadersand employees are hopeful that policy makers can putaside partisanship to promote job growth and consumerconfidence — not only for a stronger economy, but for astronger nation as well. 19
  20. 20. About Adecco Staffing USAdecco Staffing US is the nation’s leading provider of recruitment andworkforce solutions. We are the pre-eminent workforce managementpartner for Fortune 500 companies and career advisement expert forAmerican workers, serving all of the key industries and professions thatdrive our economy forward. Adecco has over 500 career centers and,on any given day, connects 70,000 talented workers to the best jobopportunities across the country, making us one of America’s largestemployers. Please visit us at adeccousa.com.About the Adecco GroupThe Adecco Group, based in Zurich, Switzerland, is the world’s leadingprovider of HR solutions. With approximately 33,000 FTE employees andover 5,500 branches, in over 60 countries and territories around theworld, Adecco Group offers a wide variety of services, connecting over750,000 associates with well over 100,000 clients every day. The servicesoffered fall into the broad categories of temporary staffing, permanentplacement, outsourcing, consulting and outplacement. The AdeccoGroup is a Fortune Global 500 company.Adecco S.A. is registered in Switzerland (ISIN: CH0012138605) and listedon the SIX Swiss Exchange (ADEN). 877.8.adecco adeccousa.com ©2011 Adecco. AMK2012