Employment Outlook: United States

2012-04-27
by Mary Anne Thompson

At long last, the US economy may finally have turned the corner – joblessness in the US is the lowest it’s been in four years; employment has risen steadily for nine quarters; wages and salaries have grown more in the last few months than in the last four years; and, according to Bloomberg, consumer confidence is the highest it has been in eight years. But, despite all the positive signs, economists remain only guardedly optimistic for now.

Although employers expect to add new jobs, they are waiting to see how the economy fares before they increase hiring, according to a nationwide survey by CareerBuilder. About a quarter of hiring managers plan to hire full-time, permanent employees this year, about the same as last year. However 59 percent of managers anticipate no change in staff levels this year, while 11 percent are unsure. Small businesses, which account for the majority of job creation in the US, are reporting more confidence in both hiring and retaining staff this year.

Last year 1.6 million jobs were created across the United States. Monthly job creation continues to accelerate, now averaging more than 180,000 over the past five months. It is expected to continue to grow on average about 170,000 a month throughout the year, according to the National Association for Business Economics. Staff reductions are also declining, except in state and local governments, where they continue. But, while the labor market is gaining momentum, the level of employment is still 5.82 million from its pre-recession levels.

Economists anticipate an average annual unemployment rate of 8.3 percent and forecast stronger job growth next year, with the unemployment rate falling to 7.8 percent. US baby boomer retirement is shrinking the workforce, thus lowering the unemployment rate and creating more open positions. Another factor in the anticipated lower unemployment rate is the need for businesses to increase hiring to meet consumer demands. As worker productivity reaches its uppermost limits, employers will need to increase headcount in order to continue to increase their output.

All states show positive job growth

Overall, hiring optimism among employers in the US is gaining momentum, and positive outlooks are reported across all industries and regions of the country, with the Midwest the most optimistic. Hiring intentions improved significantly among all the states in the US, with employers in all 50 states, Puerto Rico and the District of Columbia reporting positive hiring plans. North Dakota remains a leader, with 26 percent of employers surveyed planning to hire new staff. Other states with strong hiring forecasts include Alaska, Vermont, Delaware and Oklahoma, according to Manpower. This is the first time in nearly four years that so many employers plan to increase hiring.

The US has an education and talent gap

As hiring increases, it is becoming clear that people who are more educated have a much higher rate of employment than those who are less educated. Only 4.4 percent of college grads are out of work, compared to 10.8 percent unemployment among the less well educated.

Not unlike a number of other countries, the US is experiencing a talent gap. Hiring managers are struggling to find talent with specific skills, according to Manpower. Part of the reason for the talent gap is the country’s education gap. Sixty-one percent of those responding to a survey by Robert Half International report difficulty finding skilled employees.  Employers in IT and accounting and finance reported the greatest difficulty finding skilled professionals. The survey also found that the legal field is expected to see the strongest hiring activity, with 22 percent of lawyers planning to increase staff levels.

Professionals are needed in the Southeast and in transportation and manufacturing. Businesses in the East South Central states have the most active hiring plans, with 8 percent of area executives expecting to add professional staff. Professional-level hiring is expected to be strongest in the transportation sector, followed by the manufacturing field.

Long-Term Job Opportunities

The leisure and hospitality and mining sectors lead the country in optimism, with professional and business services, durable goods, manufacturing, wholesale and retail trade, nondurable goods manufacturing, transportation and utilities, financial, and information technology close behind. The weakest trends are in public administration, according to Monster.com.

Health care

Health care is and will continue to be a leading employment generator in the United States, according to indeed.com, which reports more than 750,000 job postings in the field. Moreover, the growth of the health care sector will generate employment in other industries. Health care’s rapid growth is due in large part to the aging of the ‘Baby Boomers.’ In addition, as health care costs continue to rise, work is increasingly being delegated to lower-paid workers in order to cut costs. For example, tasks that were previously performed by doctors, dentists or other health care professionals are increasingly being performed by physician assistants, nurses, medical assistants, dental hygienists and physical therapy aides. In addition, patients increasingly are seeking home care as an alternative to costly stays in hospitals or residential care facilities, causing a significant increase in demand for home health workers.

"Health care has become the core industry in this country, just like manufacturing in another era," says John Challenger, CEO of the outplacement company Challenger, Gray & Christmas. "It's a confluence of forces causing this, including the science involved in uncovering new frontiers, the aging of the population, and government's commitment to providing health care to a broader generation of people. That causes job growth in several sectors."

Green Jobs

As their profits and share prices tumble, renewable energy companies are struggling to recruit top talent. According to Steven Goodman, a consultant at Egon Zehnder International, Houston, “We are starting to see a dearth of talent and people will leave this industry.”

More than 3.1 million jobs in the United States are involved with producing green goods and services, according to the US Bureau of Labor Statistics. These green jobs are in businesses producing goods and providing services that benefit the environment or conserve natural resources:

• Energy from renewable sources.
• Energy efficiency equipment, appliances, buildings and vehicles, and goods and services that improve the energy efficiency of buildings and the efficiency of energy storage and distribution.
• Pollution reduction and removal, greenhouse gas reduction, and recycling and reuse goods and services.
• Organic agriculture; sustainable forestry; and soil, water, and wildlife conservation.
• Governmental and regulatory administration; and education, training and advocacy goods and services.

Green jobs account for about 2.4 percent of total employment in the US, with the vast majority in the private sector. Within the private sector, manufacturing had the largest proportion of green jobs. These jobs include producing iron and steel from recycled materials, air conditioning and refrigeration equipment, hybrid cars and parts, and pollution mitigation equipment.

Green construction jobs accounted for about 7 percent of all construction employment, and are involved with building plants that produce energy from renewable sources and weatherizing and retrofitting projects that reduce household energy consumption.

Green jobs in the professional, scientific and technical services account for about 5 percent of the industry’s employment and include engineering and architectural services, computer systems design, and management and consulting services.

California is the state with the largest number of green jobs, and in that state construction had the largest number of private sector jobs. Green jobs in New York State accounted for 3 percent of the state’s total employment. Those jobs were largely in transportation and warehousing, but also included professional, scientific and technical services jobs. Texas’ green jobs were mostly in professional, scientific and technical services.

Industries Hiring New Graduates

The industries hiring the highest number of new bachelor’s degree graduates last year are, according to The National Association of Colleges and Employers (NACE):

• Retail trade
• Manufacturing
• Hospitals
• Colleges and universities, including junior colleges

The Collegiate Employment Research Institute (CERI) at Michigan State University is more optimistic, and predicts hiring will rise 4 percent overall for all college-degree holders and 7 percent for bachelor’s degree-level jobseekers this year. The most improved job outlook this year will be for students with degrees in:

• Accounting
• Finance
• Advertising
• Marketing
• Public relations
• Sales
• Computer science
• Chemistry
• Engineering
• Math
• Statistics
• Supply chain
• Human resources
• Clinical laboratory sciences
• Nursing

Salary Outlook

Sales and IT are expected to lead in salary increases. The greatest salary increases will be for positions tied to revenue generation, according to CareerBuilder, with sales positions likely to see the biggest jump in pay, with IT roles close behind.

Other areas likely to see increases:

• Engineering
• Business development
• Accounting finance
• Customer service
• Research and development

The average salary for new graduates was 41,701 USD last year, 2.3 percent higher than the previous year. The table below, from NACE, shows average salaries for new grads across a range of broad categories.

         Source: NACE Salary Survey

Future Job Trends

• Temp hiring is up. More than a third of American businesses are functioning with fewer staff than before the recession, according to CareerBuilder. To meet consumer demand, many are hiring temporary workers. Thirty-six percent of companies plan to hire contract or temporary workers this year, up from 28 percent three years ago. On a positive note, 35 percent of the companies hiring temporary intend to hire them on a permanent basis.

• Intern hiring is up. Employers expect to hire interns this year, according to the National Association of Colleges and Employers (NACE), and they plan to pay them. Internship programs are also effective for finding full-time jobs, and paid internships lead to better job-search success

• The US is experiencing increased competition for skilled talent. Competition for talent will lead to pay hikes for both current and prospective employees. CareerBuilder reports that 62 percent of employers plan to increase compensation for their existing employees, while 32 percent will offer higher starting salaries for new employees. Thirty percent of employers told CareerBuilder they lost top performers to other businesses, and 43 percent are concerned top talent may leave this year.

• The demand for skilled positions is increasing much faster than supply. Employers are training people without experience in their field and hiring them for positions in their organizations, according to CareerBuilder’s survey.

• Twenty-nine percent of employers will recruit diverse workers this year. Twenty percent will target Hispanic workers, African American workers and women.

• Large corporations are reportedly seeking workers to replace the Baby Boomers reaching retirement age.

• Startups and fast-growth companies are hiring, but they add new staff as they go along, according to The Collegiate Employment Research Institute (CERI) at Michigan State University.

• Forty-four percent of surveyed businesses plan to hire bilingual workers this year.

Conclusion

Though economists remain only cautiously optimistic at this point regarding the U.S. economy and its job front, those seeking jobs in the U.S. today are in a better position to get one than they have been in years. Every state is hiring and in many job sectors. Most job sectors are increasing pay and beefing up training for employees who need additional skills. Those with degrees, particularly in health care or green sectors, are in demand as the country faces skills shortages. After years of a relatively stagnant jobs market, the U.S. is finally rebounding.   

Mary Anne Thompson is the Founder and President of Going Global, Inc. (www.goinglobal.com) a subscription database service that contains career and employment information for more than 80 locations. More than one million users enjoy Going Global’s unique content, which is researched in-country by local career experts and updated annually. She is also an author, lecturer and frequent guest on various media outlets, including NBC and CNN International. Previously, Mary Anne served as an attorney and advisor to President Ronald Reagan in the White House.

http://www.goinglobal.com/

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