Sequestration's Opportunity for Professional Employment Sequestration has been described as a meat-ax approach to spending, but it may be one that slices two ways.

1. Sequestration's Opportunity
for Professional Employment
Sequestration has been described as a meat-ax approach to
Submitted by: Jim Spellacy, CSAM
spending, but it may be one that slices two ways.
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While the cuts will have a rapid near-term effect on employment, >Experts in Global Search
they may also create a temporary opportunity for employers to (330) 273-4300 ext. 102
acquire talent. Many of the positions affected are filled by highly Jim@MRCSW.com
trained people in disciplines that have continued to experience
increasing talent shortages in recent years.
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"In layoffs like these, that have nothing to do with job you beyond your 2013 goals.
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performance but rather fallout from much larger issues,
highly qualified and capable people end up entering the job
market," says Rob Romaine, president of MRINetwork. "It
VOLUME VIII ISSUE 3
means a short window of availability for private sector
employers to scoop up experienced professionals in
disciplines like engineering, IT, accounting, and project
management."
The cost-cutting mandate, which appears increasingly
unavoidable in the coming months, will impact the military, This isn’t to say that sequestration will be a big boon for the U.S.
military support, research, education and other sectors that rely economy. Many economists project sequestration will remove
heavily on government support. as much as 1.5 percent of GDP from the economy in 2013 and
While total U.s. employment shrank by more than 6 percent blame it for the sharp decline in GDP growth during the fourth
during 2008 and 2009, employment of those in professional and quarter of 2012. Private-sector activity, however, is rebounding,
related occupations remained essentially flat during those years and in the fourth quarter was enough to counter nearly a 15
– despite comprising 20 percent of the workforce -- and has percent drop in government expenditure and keep total GDP
since resumed its pace of growth.
March 8, 2013
growth virtually flat.
“Historically, government layoffs in sectors like defense have “There was such a shortage of experienced talent before
had only a short-term impact on employment because the types the recession that even with the sharpest economic decline
of people who are laid off are inherently highly employable,” in more than a generation, professional employment levels
notes Romaine. “While these cuts will be reaching far beyond didn’t decline,” notes Romaine. “While the economy may
defense spending, the principle still applies for many of the slow again by the end of the year, we shouldn’t expect that
industries that will be affected, which points to an opportunity for to lower the demand for professional talent nor affect the
employers.” availability of experienced professionals.”
Meanwhile, the Bureau of Labor Statistics looked in its rearview
mirror for 2012, and the data were bigger than they first
appeared.
When the BLS released its monthly employment report for
January, it released revisions to data for all of 2012 that were
improved. In total, 647,000 more jobs were created in the United
States last year than BLS reports had indicated. While that is
only about 0.41 percent of total U.S. workforce, it significantly
alters the estimate of year-over-year growth. As of January,
before the adjustment, total employment year-over-year was up
less than 1.2 percent. With the adjustment, average growth in
2012 grew to more than 1.5 percent, in line with the 40-year
average, and well above the 20-year average of 1.1 percent
annual growth. In fact, in the last 10 years employment has only
Source: Department of Labor
grown an average of 0.3 percent per year. By these metrics,
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2012 was at least an average year .for employment growth and
in recent history was actually above average.

2. Employment Summary for February 2013
In February, unemployment in the U.S. fell
to 7.7 percent, its lowest point in four years for this group, unemployment declines were
according to the Labor Department, as driven more by a falling participation rate
236,000 new jobs were added. While than growing employment. The
employment growth was the leading cause management, professional and related
for the falling unemployment rate, it was occupations unemployment rate dropped
pushed lower still by a decreased year-over-year from 4.2 percent to 3.8
participation rate, which decreased by 0.1 percent as total employment grew by close
percent. Employment growth managed to to 1.4 million in the last year.
significantly beat consensus economist Put in a historical context, February’s
estimates that employment would grow by unemployment report shows monthly growth
about 160,000 positions in February. Nearly that is the second-strongest since last
2.4 million jobs have now been added to the February, when employment grew by more
U.S. economy over the than 270,000 jobs. For the
last twelve months. past several years,
While there was growth though, February has
across most sectors of been the last month of
the economy, there strong employment growth
were pockets that saw before a deceleration
notable levels of growth. going into the summer.
Construction, which has In March, another wrinkle
seen minimal growth will be added with
over the last several sequestration, which took
st
years, grew by 48,000 effect on the 1 of the
positions in February, month. Observers will be
keeping pace with the looking closely to see what
overall rate of growth in effects it will have on
the U.S. Additionally, employment in the coming
temporary help services months. While layoffs are
grew by 16,100 expected to affect
positions and government contractors
accounting and almost immediately,
bookkeeping services government agencies will
grew by 10,900. One interesting area for instead mostly be relying on furloughs which
growth was the motion picture and sound begin this month.
recording industry, which grew by 20,800, Overall, this report far surpassed many
from just 374,800 total positions in January. expectations and was made all the more
The unemployment rate for those with a impressive by the headwinds seen in
bachelor’s degree or higher edged up Europe’s employment markets. Employment
slightly from 3.7 to 3.8 percent on an continues to grow and, even with
increased participation rate with total sequestration coming into effect,
employment growing significantly. The expectations are for growth to continue for
unemployment rates for those with high the remainder of the year as the economy
school degrees but not bachelor’s degrees looks to consumer and corporate demand to
actually fell substantially in February. Yet, make up for the decline in government
spending.

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