LHH 2011 Job Market Perspectives Report


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Lee Hecht Harrison\'s 2011 Job market perspectives report explores both the current and future labor market while looking beyond the headlines to provide a well-rounded analysis of the constantly evolving labor market.

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LHH 2011 Job Market Perspectives Report

  1. 1. 2011 Job market perspectives
  2. 2. 2011 Job market perspectivesMoving (slowly)in the right direction.Following one of the most challenging time periods for the U.S. economy and job market —what is now referred to as the “Great Recession” — this past year introduced a level of stabilitywhich helped to nudge the economic pendulum in a new direction. In an economic downturnemployees are less likely to abandon ship. Many workers are simply waiting for the jobmarket to improve to take advantage of new opportunities. With the economy predictedto pick up, it is imperative for organizations to focus on engaging, retaining and developingtheir most critical asset — their talent. If employees are not engaged now, organizationsrisk losing a portion of their workforce as the economy improves.While the country is getting closer to a place of Despite these positive developments, employerseconomic recovery, it doesn’t mean that the road continued to move forward with hiring strategies thattraveled thus far has been easy, nor does it mean were centered around cautious optimism, leavingthat the road ahead will be fully straight, paved millions of Americans out of work. Cautious bits ofor short. good news — the private sector adding jobs, increased home sales, improved manufacturing and retail sectorAs the National Bureau of Economic Research growth — were beginning to shine, but a nearly 10announced that the recession was officially over, percent unemployment rate, amongst other trends,millions of Americans had a hard time believing this made it hard be fully optimistic on where the economyassertion as the connection between signs of success was and is headed. Additionally, with a numberon Wall Street lagged Main Street realities. On the of political changes for both healthcare and financialpositive side, the majority of financial institutions reforms being passed, as well as a reshuffling of thethat needed assistance from the government began House of Representatives, new economic and workforceto turn profits, as well as the Big 3 automakers that dynamics have been created that will have an impactwere in peril the year before. GDP started to grow, on the future of the financial and job market situation.consumer confidence began to show signs of lifeand the temporary sector, a leading market indicator, LHH’s 2011 Job market perspectives report exploresexperienced tremendous month over month job both the current and future labor market while lookinggrowth — something we saw first hand and helped beyond the headlines to provide a well-roundedto power right here at Lee Hecht Harrison. analysis of the constantly evolving labor market. We hope this guide will help you realign your organization or your career for an upcoming year of growth and recovery. 3
  3. 3. Key moments in time: 2010 • resident Obama P announces that Big 3 automakers are now declaring profits • odd-Frank Wall Street D Reform and Consumer Protection Act passed • il spill in the Gulf of O • atient Protection P Mexico capped and Affordable Care • nemployment benefits U Act passed extension passed by • ob gain J • arch/April 2010 M • il spill in the O • ob gain of J Congress and signed into of 14,000 jobs Census hiring starts Gulf of Mexico 432,000 jobs effect by President Obama January March April May July4
  4. 4. 2011 Job market perspectives • ob gain of 151,000 jobs J • idterm elections take M• ob loss of 95,000 jobs J place — Republican Party gains hold of House• resident Obama P of Representatives and proposes infrastructure chips away at Democrat • ncreased consumer I plan to boost jobs controlled Senate confidence and spending and economy around holiday shopping • s of the November BLS A• s of September, over A • ast majority of over V data, the private sector • Job gain of 103,000; 245,000 temporary jobs 500,000 U.S. Census jobs has added 1.17 million unemployment rate have been added since have come to an end private sector jobs in 2010 lowers to 9.4 percent the start of the year September October November December 5
  5. 5. The global economy and job market. The global economy. 2010 was a year of economic transition. In North Amer- ica, and in particular, the United States, it was marked In the United States, the by stronger than expected early growth, a slight decline economist forecast from mid-year, and increasing optimism and positive news in late 2010. In Europe, historically high unemployment The Wall Street Journal predicts rates continued throughout the year with countries like that the unemployment rate Greece and Ireland facing financial crises. will be 8.9 percent by the By fall of 2010, advanced global economies and more emerging markets were at different points in the end of 2011 with non-farm economic cycle with most Asian and Latin American payrolls adding an average countries having nearly recovered from the recession. In more advanced economies, the recovery, as noted of 152,000 jobs a month above, has been a bit more transitional, with the world equaling just over 1.8 million economy following the patterns of important countries like the United States and Western Europe. jobs for the year. 2011 should fare better than the past two years with small levels of growth taking place in Europe as well as the Additionally, salary budgets United States. Economists estimate that GDP growth in for 2011 are projected to the U.S. for the year will be just under 3.0 percent, which is a half percent increase over 2010 and the inflation continue rising after hitting rate holding below 2 percent for the year, which should historic lows in 2009, allow business and consumer confidence to grow. according to results from The global job market. the 2010-2011 Culpepper The job market and employment situation is expected to pick up in 2011, continuing the momentum that began Salary Budget & Planning in late 2010. In Europe, most economists feel that the Survey which contains data unemployment rate will vary between 10.0 and 10.6 percent for the EU as a whole as some countries face from 933 organizations much higher unemployment rates than others as seen in 90 countries. with the Netherlands unemployment rate hovering around 4.4 percent, and Spain still at a level above 20 percent. From a sector perspective, global salary increases will be most evident in technology, life sciences, healthcare and alternative energies reinforcing the job demand in these categories.6
  6. 6. 2011 Job market perspectivesSalary freezes will be all but obsolete and the globalaverage base salary is expected to increase by 3.14 percent— the highest boost since 2008. 7
  7. 7. The country’s political climate. Top of mind in the political arena was the nation’s economy and the employment situation which weighed on the over 14 million jobless Americans facing a reduction or an end to their unemployment benefits as well as a lack of job options. This sentiment was made clear as the Republican Party won control of the House of Representatives, decreasing the margin of Democrats in the Senate in November’s mid-term elections. Evidently, Americans were not com- pletely pleased with the status quo of their government and its policies. The election also marked the gaining 2010 was a year of large scale changes clout of the Tea Party movement with a small number of the party’s candidates being elected to Congress. to the United States government The 112th Congress will be one of varying ideals and and its legislation. Two of the highest strategies around how to fix the United States’ ailments profile pieces passed were the — particularly as some feel the economic recovery is not going as it should. Although many members of healthcare reform bill signed in March Congress are hoping to overturn the healthcare reform as well as the financial reform bill bill passed in 2010, political experts note that ultimately, there may not be enough votes to do so. which was signed into effect in July. Other pieces of legislation that will be top of mind in 2011 will be tax breaks for higher income earners, and a dialogue around how to diminish the unemployment rate and return it to pre-recession levels as quickly as possible. Collaboration is essential. With many political analysts seeing a breakdown of communication and political gridlock as virtually inevitable, this will certainly prevent issues from being resolved. As both political parties start looking towards the larger 2012 presidential election, 2011 cannot be a year of political maneuvering, and it must focus on collaboration between President Obama and Congress in order for the country to grow stronger and move forward.8
  8. 8. 2011 Job market perspectivesImpact of the healthcare reform law Impact of financial reform lawon the U.S. workforce. on the U.S. workforce.• A s many as 32 million U.S. residents gained • B ill is single largest overhaul on the U.S. financial coverage, mainly through expanding Medicaid regulatory system since the Great Depression. and extended federally subsidized health insurance premiums for the uninsured. • H eightened market regulations, the Consumer Financial Protection Bureau, Volcker Rule and • E mployers were required to modify plans to Federal Insurance Office put into effect. comply with a wide range of new requirements, such as continuing coverage for employees’ • B ased on an expanded need for compliance adult children. and transparency, businesses will need to modify staffing plans, and in many cases, create• E ffective in 2014, employers with at least 50 positions to adhere to new laws. employees will face an annual penalty of $2,000 for each employee they do not offer affordable coverage to.• B ased on increased coverage for workers, millions of new healthcare jobs will be needed to meet expanded coverage. 9
  9. 9. Looking behind the numbers. When reviewing the monthly employment situation What is the U-6 unemployment rate? report produced by the U.S. Department of Labor’s The U-6 unemployment rate includes both people Bureau of Labor Statistics (BLS), a general unemploy- looking for full-time jobs as well as “marginally attached ment number is produced that is widely used not only workers and those working part-time for economic as a job marker, but as a broad economic indicator. reasons.” The “marginally attached workers” include This number, which was 9.4 percent as of December those who have gotten discouraged and stopped 2010, and will most likely remain in the 9 percent looking, but still want to work. The age considered range for at least a part of 2011, counts individuals that for this calculation is 16 years and over — comprising are without work and seeking full-time employment. a much larger number of people. The 9.4 percent unemployment rate is calculated based When factoring in this number, the broader unemploy- on people who are without jobs, who are available ment rate then rises to 16.7 percent as of December 2010, to work and who have actively sought work in the prior marking a much higher number than the commonly four weeks. The “actively looking for work” definition referenced one. Another factor that plays a large part can be fairly broad, including people who contacted into unemployment is the level of education an individual an employer, employment agency or job center, sent has. In 2009, the average unemployment rate across out resumes or filled out applications, or answered all ethnicities for an individual with a bachelor’s degree ads. The rate is calculated by dividing that number by or higher was 4.6 percent — significantly lower than the total number of people in the labor force. Although the general and U-6 unemployment rate. the number is the general one used, a number we believe that more people will look at in 2011 is the U-6 We anticipate that the unemployment rate may unemployment rate. potentially rise in the beginning of 2011, but this should be seen as a positive indicator. While this may seem In addition, LHH’s monthly Workplace Economy report counterintuitive, the increasing unemployment rate offers you an in-depth look at the latest jobs report means that Americans who had previously given from the Bureau of Labor Statistics (“BLS”) and features up on the job search are now re-entering it as active advice for organizations in this changing economy. job seekers. Be sure to add lhhworkplaceeconomy.com to your favorites and check back frequently for continuous up- dates from the BLS — this is a great resource for getting all the latest workplace news and employment trends.10
  10. 10. 2011 Job market perspectivesThis trend means that we will see a larger number of Americansrejoin the labor force, which will increase the number ofunemployed, active job seekers who are no longer discouragedin their job search. As these individuals are placed, we will beginto see those unemployment numbers normalize and decrease.With the stabilization of the economy, employees who are criticalto an organizations current and future performance will becomemore sought after making it imperative to focus attention onengaging, retaining and developing these critical membersof the workforce.For our latest research study on Leadership Developmentproduced in partnership with Human CapitalInstitute, visit LHH.com. 11
  11. 11. Higher education equals lower unemployment. As the economy continues to The White House Summit on Community Colleges recover, one trend becoming took place in the fall of 2010, with President Obama increasingly clear is the providing $2 billion to fund the Community College return and augmentation and Career Training initiative in the Health Care of the number of skilled job and Education Reconciliation Act that he signed on opportunities available. This March 30, 2010. The current administration has set marks a different pattern than seen in past recessions two national goals: by 2020, America will once again where goods-producing jobs led economic recovery. have the highest proportion of college graduates in the world, and community colleges will produce In addition, increased global competition and the an additional 5 million graduates. continuing trend of outsourcing jobs are making it more critical than ever for job seekers and the employed The Recovery Act will also play a large part moving to be educated and seek further professional training. forward, as community colleges will also be the beneficiaries of $1 billion for training programs in As discussed earlier, unemployment rates vary greatly clean energy industries, health information technology — in some cases as much as 10 percent — by levels of and retraining programs. education. In the near future, jobs in fields which require at least an associate degree are projected to grow To complement this program, the White House twice as fast as those requiring no college experience, also launched an additional program called Skills and 8 of 10 jobs will require college or other specialized for America’s Future which will build job training training, according to a White House report. partnerships between community colleges, industry, and labor unions in all 50 states. The partnership A bachelor’s degree isn’t the only solution. will also include a number of prominent American While a bachelor’s degree or higher is an ideal situation, companies who are committing to training their there are other options available for American workers. staff in a number of areas including leadership The Obama administration feels that education will and technology skills. be a huge component to economic recovery and With funds reaching state level to directly impact progress and has initiated two programs through the workforce, these two programs will change the the White House as a way to bring this to the forefront. future of adult education and training, which, as mentioned, will be extremely important in a number of sectors including green-energy, healthcare and professional services.12
  12. 12. 2011 Job market perspectives8 out of 10 jobs will require college or other specialized training,according to a White House report. 13
  13. 13. Where the jobs are: Temporary services 2009-2010 change in workforce: +308,400 Number of American workers: 2.2 million Regions in demand: All Situation overview. “Temporary employment today, Temporary jobs have been one of the leading sectors coming more than ever before, is likely out of the recession with the creation of over 495,000 jobs to lead to permanent employment since a low in September 2009. This sector will continue to generate new jobs and growth will be led by businesses tomorrow.” in need of employees to manage temporary and seasonal Peter Alcide increases in workloads, demand for specialized workers President and COO, LeeHecht Harrison. and businesses looking to expand without bringing on Source: BLS permanent staff. Temporary hiring is a method that a large amount of employers have opted for as they emerge from the recession. It allows for a workforce model that contracts or expands rapidly according to business needs, making it an ideal way to begin bringing staff on. Additionally, more and more workers are searching for job opportunities that offer flexibility. Based on this, there will be a large amount of jobs added to the temporary sector in the foreseeable future. Areas in demand. While all sectors need temporary staff members, some of the most high demand sectors are healthcare, office and administrative support, production, transportation, finance, information technology and engineering.14
  14. 14. 2011 Job market perspectivesWhere the jobs are:ManufacturingUnemployment rate:10.0 percent (not seasonally adjusted)2009-2010 change in workforce: +136,000Number of American workers:11.67 millionRegions in demand:Midwest, SouthSituation overview. “Manufacturing is very robust for usAlthough 2009 was a rough year for the sector, manufacturing right now. Skilled machinists andis recovering and was seen as one of the bright spots in 2010 machine operators in some placeswith a 1.6 percent gain in jobs — about twice the pace of growthin other private sector jobs. Additionally, the industry had one are getting tougher to come by.”of its biggest percentage gains in jobs since 1994. Donna Carroll, Vice President, Adecco Staffing U.S., CNN Money, September 2010Areas in demand. Source: BLS, Fortune.comWith the Big 3 auto manufacturers declaring profits in 2010,things are looking significantly better for the auto industry,as well as for skilled workers. As consumer confidencecontinues to grow, there will be a greater demand for goodsand employees to create them. 15
  15. 15. Where the jobs are: Financial services Unemployment rate: 6.4 percent (not seasonally adjusted) 2009-2010 change in workforce: -42,900 Number of American workers: 7.6 million Regions in demand: Northeast, West Situation overview. While finance was one of the first sectors heavily impacted by the recession and the financial crisis, jobs are returning bit by bit, month over month. While jobs are still short of the level they were at in 2009, the sector will rebound and is expected to return to pre-recession levels in the next few years. Areas in demand. While roles in all financial sectors will re-emerge, a push towards compliance, financial policies and risk mitigation will bring in a new era of financial jobs. While being a trader or an analyst was once seen as a highly desirable job, these new positions will be much more in demand in the future reflecting the changes in financial reform. Source: BLS16
  16. 16. 2011 Job market perspectivesWhere the jobs are:Legal services2009-2010 change in workforce: +1,200Number of American workers:1.1 millionRegions in demand:Northeast, West, MidwestSituation overview.Within the next eight years, the employment of lawyers andother legal jobs is expected to grow around 13 percent. Expertsbelieve this will be a result of an increased number of legaltransactions, civil disputes, and criminal cases. Additionally,while the country was in recession, a number of people choseto return to school for advanced or graduate degrees. As a result,the number of entrants in law school increased significantlywith more Americans choosing to either change their careeror further their skill sets.Areas in demand.Jobs in the sector will also result from an increasing demandfor services in areas such as healthcare, intellectual property,bankruptcy, corporate and security litigation, antitrust law, andenvironmental law. In addition, the popularity of legal clinics mayresult in an increased use of legal services by the middle class.Source: BLS, Fortune.com 17
  17. 17. Where the jobs are: Healthcare Unemployment rate: 5.2 percent (not seasonally adjusted) 2009-2010 change in workforce: +266,000 Number of American workers: 13.9 million Regions in demand: All Situation overview. As a result of an aging population and all the legislative changes associated with healthcare reform, healthcare is one of the hottest professions — and we expect growth to continue for years to come. Areas in demand. According to the BLS, about 26 percent of all new jobs created in the U.S. economy from now until 2018 will be in the healthcare and social assistance industry. This industry — which includes public and private hospitals, nursing and residential care facilities, and individual and family services — is expected to grow by 24 percent, or 4 million new jobs. Employment growth will be driven by an aging population and longer life expectancies. Of the 20 fastest growing occupations in the economy, half are related to healthcare including home health aides, physician assistants, physical therapist aides and medical assistants. Source: BLS18
  18. 18. 2011 Job market perspectivesWhere the jobs are:EngineeringUnemployment rate based on occupation:4-6 percent2009-2010 change in workforce: -17,000Number of American workers:1.27 millionRegions in demand:Midwest, SouthSituation overview.Services providing jobs will continue to be in demand —particularly in highly technical professions like engineering.Through the stimulus and White House grants, a numberof infrastructure projects will fuel portions of the sector.Areas in demand.Engineering degrees account for four of the five most highlypaid majors among the college Class of 2010, accordingto the National Association of Colleges and Employers (NACE).The highest starting salary offers include:Petroleum Engineering ..................................................$74,799Chemical Engineering .................................................. $65,628Computer Engineering .................................................. $59,917Electrical/Electronics Engineering ................................. $59,391Additionally, in subsectors like utilities and energy, the demandfor professionals will continue to rise as green technologiesemerge and the vast majority of employees in this sector reachretirement age.Source: BLS and NACE 19
  19. 19. Where the jobs are: Information technology Unemployment rate: 4.5 percent 2009-2010 change in workforce: +52,700 Number of American workers: 1.48 million Regions in demand: West, Northeast Situation overview. Nearly all organizations rely on computer and information technology to aid in business. The industry grew dramatically throughout the 1990s, as employment more than doubled. While growth has been decidedly slower in the last decade, this industry is still projected to be one of the 10 fastest growing in the nation. Areas in demand. The industry will add about 656,400 jobs over the decade, placing it among the five industries with the largest job growth, particularly as we face an increasing reliance on information technology. Growth will also come from the need to maintain networks and computer system security. Additionally, analysts and developers will be needed to develop new antivirus software, programs, and procedures. Sources: BLS, InformationWeek.com20
  20. 20. 2011 Job market perspectivesWhere the jobs are:Accounting2009-2010 change in workforce: -53,300 jobsNumber of American workers:863,000Regions in demand:Northeast, West, MidwestSituation overview.While most accountants work in private industry andgovernment, around a quarter of accountants and auditorswork for accounting, tax preparation, bookkeeping, andpayroll service firms.Most accountants find work in urban areas, where accountingfirms and central or regional offices of businesses areconcentrated.Areas in demand.As the economy grows and businesses become globalized,more accountants will be needed to set up books, prepare taxes,and provide management advice.Accountants will also be needed as financial reforms and anemphasis on transparency and compliance grows. An increasedimportance will be placed on watching company financesand accounting procedures, thus creating opportunities foraccountants and auditors, particularly CPAs, to audit financialrecords. Management accountants and internal auditorswill be needed to discover and eliminate fraud before audits,and ensure that processes and procedures are documentedaccurately and thoroughly.Source: BLS 21
  21. 21. 2011 Job market perspectives Regional and geographic insights: West Northeast Unemployment rate: Unemployment rate: 10.9 percent 8.5 percent Hot sectors: Hot sectors: Manufacturing, exports, Education, healthcare, professional and professional and business services, mining, business services, ambulatory care, finance information technology Midwest South Unemployment rate: Unemployment rate: 9.1 percent 9.2 percent Hot sectors: Hot sectors: Manufacturing, professional and Energy, healthcare, utilities, green jobs business services, finance, transportation *Unemployment rates reflective of November 2010 BLS data.22
  22. 22. 2010 will be a year remembered for cautious optimismand glimmers of visible hope in the economy and jobmarket. Most economists have high hopes for 2011 — that it Moving forwardwill be remembered as a year of onward and upward growth,moving the dialogue from “recovering” to “recovered.”As the U.S. labor market continues to find its footingfollowing the economic crisis of the past few years, theroad to recovery is going to be a constantly evolving journey.In order for unemployment to drop below its currenthighs, a wide range of job seekers including the currentlyunemployed, underemployed and discouraged willneed to find new opportunities. The consensus is that wewill get there, but not without some patience, resilienceand perseverance.
  23. 23. About Lee Hecht HarrisonWith over 270 offices worldwide, Lee Hecht Harrison is the global talent development leaderin connecting people to jobs and helping individuals improve performance. LHH assistsorganizations in supporting restructuring efforts, developing leaders at all levels, engagingand retaining critical talent, and maintaining productivity through change.Lee Hecht Harrison is part of Adecco Group, the world leader in workforce solutions withover 6,000 offices in over 70 countries and territories around the world. For more information,please visit LHH.com. 800.611.4LHH LHH.com ©2011 LHH