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Featured Article

 
Notable Global Events  

Spotlight on the Chile

Retail Demand Replaces Commodities 

Spotlight on New Mexico

  Featured Article 

As Job Market Improves, Candidates Notice 

In the depths of the recession, as unemployment rates were rising and everyone knew someone who was being affected, “It’s better than no job at all” became a common refrain across the factory floors and offices of America. While it was a poor retention strategy, it was a worse recruiting strategy and now, with the economy on the mend, candidates are no longer falling for it.

“Candidates now know—as much, if not more than hiring managers—that the market is improving,” says Rob Romaine, president of MRINetwork. “Top candidates are getting multiple offers, and those who don’t like what they hear from one employer are more frequently willing to wait for another suitor.”

Employment growth was below expectations in March, with just 120,000 positions added compared to more than 200,000 in some projections. Though that had followed four months in which more than a million positions were added collectively. The rate of growth is expected to remain decidedly slower for the remainder of the year. But, short of the U.S. economy slipping back into to a major recession—something almost no economist is projecting—the labor market is going to remain competitive.

“It’s dangerous to underestimate the competitiveness of the labor market. Companies are pursuing plans, bidding on business, and making projections, only to later realize that it is taking many months for their internal HR departments to fill the roles and often at higher starting salaries than expected,” notes Romaine.

The job openings rate has risen from 1.8 percent in the worst of the recession to 2.5 percent in February. Over the same time, the hires rate has risen from 2.8 to 3.3 percent, while the separations rate has fallen from 3.5 to 3.1 percent.  While the positions available and being filled span almost all sectors of the economy, the bulk of employees being hired share one thing in common: four-year college degrees.
Since March of 2011, total employment by those with a Bachelor’s degree or higher has risen by more than 1 million positions. Total employment by those with less than a Bachelor’s degree, though, has actually shrunk by 218,000 positions. The unemployment rate for those in management, professional, and related occupations has fallen to 4.2 percent, and when you look at more technical fields, the rate begins to approach full employment.

“Candidates have realized how rare a commodity they are, but when an employer isn’t making them feel courted, somebody else will,” says Romaine. “It’s not that top performers are demanding the red carpet treatment during the hiring process, but when they have multiple offers, the style of the process can be as important as the substance of the opportunity.”

  Notable Global Events 

   The euro zone’s unemployment rate continued to rise in February, reaching 10.8 percent. A proposal in front of the European Commission is suggesting cutting labor taxes while raising use taxes to spur employment growth. 

The Bank of Korea recently lowered its GDP growth projections for 2012 from 3.7 to 3.5 percent with a statement tying the downgrade to projected euro zone contractions. Unemployment in South Korea, though, was down to 3.4 percent in March from 3.7 percent a month earlier.

Spotlight on Chile

 Retail Demand Replaces Commodities 

Throughout the recession, Chile has been able to temper the drops in the global economy with the rising demand and price of copper—a resource of which Chile is the world’s largest producer. With the global economy still wobbling, seeing a decrease in demand for copper should have signaled the beginning of a slowdown in the country, and, while that may still happen, it hasn’t yet. 

In March 2012, total copper production fell 2.6 percent from a year earlier, while other natural resources like wood and oil fell even further to 7.7 and 13.9 percent respectively. Yet, Chilean consumers seemed to move in the opposite direction, causing consumer sales to surge in retail and supermarkets. Retail sales have risen as much as 9.2 percent from a year ago, despite five separate interest rate increases last year targeted at slowing domestic demand. 

While manufacturing has also slowed, economists expect the Chilean central bank to continue to raise interest rates in light of continued consumer demand. 

Inflation in Chile has remained high throughout the global recession, despite briefly slipping into negative growth itself, in large part because of the rising price of copper. In February, the annual inflation rate had reached 4.4 percent, though it declined to 3.8 percent in March.  

Chile’s GDP is expected to grow between 4 and 5 percent in 2012 after a robust 6 percent growth in 2011.That growth has helped push down its unemployment rate, which has fallen to 6.6 from 7.3 percent a year earlier. While 6.6 percent unemployment is low compared to many developed economies today, Chile’s Finance Minister Felipe Larrain has gone on record calling the falling rate “near full employment.”

In comments related to a Chilean bond issuance in late April, Larrain highlighted the unemployment rate and said the government is aiming to increase labor-force participation, especially among women, as the economy continues to grow.  It was a sentiment echoed by a Goldman Sachs Group economist in an email to investors, which reported that Chile’s “labor market remains tight,” and that “the economy is operating at around full employment.” 

In the coming months, eyes will turn toward Chilean manufacturing numbers to see if the retail spike is going to translate into more production. Should the domestic market continue to remain strong, it should help to counteract a seasonal rise in unemployment going into the summer months.

Spotlight on New Mexico 

Boosting Private Industry 

When an extraterrestrial flying saucer crashed in the desert outside Roswell, New Mexico, in the summer of 1947, its landing was clearly impeded by the lack of proper spaceport facilities in New Mexico—or anywhere on Earth for that matter. Over the last several years, the State of New Mexico has been working to rectify that deficiency by constructing Spaceport America, the country’s first commercial space launch and recovery facility.The spaceport is a very small, albeit glamorous, part of a concerted effort by New Mexico to expand private industry and employment in a state where nearly one in four workers are employed by the government. Nationally, the average is less than one government employee for every six workers.

 “Trying to change the balance between the public and private economies is something governors in New Mexico have been struggling with for 25 years,” says Paula Ancona, Managing Partner of Management Recruiters of the Sandias outside of Albuquerque. “Since Governor Susana Martinez took office, though, expectations have been higher than ever before. She has already helped to bring hundreds of new, high-paying technology jobs to New Mexico, and in a state the size of ours, that’s a meaningful amount.”A sizable part of the government presence in New Mexico is from high-tech scientific, defense, and research-related roles. The Los Alamos National Laboratory, established by Robert Oppenheimer as the home for the Manhattan Project, employs more than 9,000.

Ancona notes though that in many of the non-scientific positions she places in the state, there is a limited pool of talent with private sector experience. Candidates frequently have to be sourced from surrounding states, if not farther away, making filling more specialized roles even more difficult.

“Intellectually, hiring managers understand tight the market is. They’ll say they know the candidate they are looking for might not exist. Yet, they’ll still hold out for that pedigree, while passing on world-class talent without so much as an interview,” says Ancona. “The attitude is that if they’ve got time to keep looking, they’ll take it.”

That perception might not be all wrong. While many Western states—Nevada and California for example—saw economic bubbles that burst in the last few years, New Mexico never had the same level of buildup. Then again, with such a large concentration of professional-level government and government-related employment, they also didn’t take the hit that others did.

“Companies are especially looking to add roles along the lines of business development positions,” notes Ancona. “But it’s measured growth, and cautious decisions are being made with a heavy eye on quality—quality of product, quality of services and consequently, quality of talent.”

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

According to the Labor Department, total employment grew in the United States by 115,000 positions in April, the 19th straight month of job growth. The unemployment rate dropped from 8.2 to 8.1 percent and from 10 percent two years earlier. Revisions to March’s numbers showed 153,000 jobs added, up from the 120,000 jobs previously reported. The professional, managerial, and related occupations unemployment rate, which reached as high as 5.5 percent in 2009, fell to 3.7 percent in April.

Retail trade added 29,000 positions, countering a loss of 32,000 positions reported last month. However, there has been no significant trend in that sector, which has only added 19,000 jobs in total since December. Professional and business services added 62,000 jobs in April, a third of which came from temporary staffing firms. Architectural and engineering services and computer design services both added a little more than 7,400 positions. The only significant decline in the report was a loss of 16,600 positions in transportation and warehousing, 11,000 of which were from transit and ground passenger transportation.

The unemployment rate for those with a bachelor’s degree and higher fell from 4.2 to 4 percent in April, bringing that sector to less than half the average unemployment rate of all other levels of education, 9.1 percent. April, though, saw improving numbers for those with lower levels of academic achievement. The unemployment rate for those with a high school diploma, but no college, has fallen from 9.7 to 7.9 percent from a year earlier, almost equal to the 7.6 percent rate of unemployment among those with either some college or an associate’s degree.

April’s employment report failed to meet the expectations of economists, who were expecting more than 160,000 jobs to be added. Yet, the report is more positive than some predicted following the ADP report released in advance of the Labor Department’s numbers, which showed a strong deceleration from March’s employment growth.

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Featured Article

Notable Global Events  

Spotlight on the BRIC Economies

Growth of the Next Decade 

Spotlight on Oregon

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“The market for professional and management jobs has flipped in the past year in Chattanooga from being an employer-driven market to now more of a candidate-driven market,” said Al Clark, the local franchise owner and general manager of Management Recruiters of Chattanooga. “Many job candidates who were competing for an offer 18 months ago are now getting multiple offers.” 

        Featured Article

     Looking For a Short Cut Where None Exists  

In January 2012, the unemployment rate was down year-over-year in 345 of the 372 U.S. metropolitan areas the Labor Department tracks. The number of metropolitan areas with unemployment over 10 percent nearly halved from 150 in January 2011 to just 86 in 2012.

A consensus of economists surveyed by Blue Chip Economic Indicators last month projected the unemployment rate will be below 8 percent by the end of 2013. A recent report by a research economist at the Federal Reserve Bank of New York, however, showed a series of scenarios in which unemployment could actually fall to 6 percent as soon as early next year. Either way, we are in a period of recovery, and unless outside factors such as instability in Asia or Europe slow the U.S. economy, the improvement is set to continue.

Hiring activity continues to increase as the economy gains speed. However, employers are finding fewer qualified applicants for their top positions. Even when multiple qualified candidates materialize, selecting among them is feeling more like gambling than science. Hiring managers today are hungry for ways to confidently screen out candidates.

In fact, while most job seekers spend hours crafting a perfect resume, professional recruiters often don’t even look beyond the contact information. Instead, they opt to take a professional history through an interview.
“Resume and cover letter advice has become so ubiquitous that candidates are following the same unwritten rules. Rejecting resumes that fail to fit the mold exactly becomes an easy way for hiring managers to trim a stack of resumes,” says Rob Romaine, president of MRINetwork. “By the end, there is a small pool of candidates who simply put the right polish on their job search. But it’s a filtering process that doesn’t take into account the qualities that actually cause someone to positively contribute to an organization.”

The recent trend of interviewers requesting to see private social media profiles of candidates doesn’t stem from an interest in violating a candidate’s privacy. It’s the fallout of a talent market that has been coached and homogenized to a point where employers are desperate to find not just what makes one qualified candidate better than the other, but even just what makes them different.

“Today, a social media profile that is clear of content that gives an interviewer pause is as likely to mean the profile has been sanitized as anything else, which makes looking at them virtually meaningless,” says Romaine. “While even the most detailed profile is going to provide little insight into how a candidate solves problems, overcomes challenges, or would interact with a team. These are the qualities that make A-players and they are qualities that are infinitely harder to screen for.”

One important role outside recruiters can serve in the search process is their ability to interact with candidates outside the normal candidate-employer relationship. Agency recruiters will often interact with a candidate for months or sometimes years before sending them on an interview and will know many of their colleagues in a similar way. It gives the recruiter a much broader understanding of the candidate from which to evaluate how they will fit with an organization.
“Going online for 15 minutes can help to eliminate a candidate, but it does little to highlight the positive attributes a candidate might bring. Conversely, interview techniques, like having candidates participate in a long-form group meeting with several members of a team might be time intensive, but can help to highlight someone who would thrive in an organization,” notes Romaine. “While moving quickly once a top candidate has been identified is important, vetting a candidate using shortcuts that don’t actually connect to performance or cultural fit is counterproductive.”     

 

  Notable Global Events   

Germany’s unemployment rate fell to a two-decade low in March, slipping to 6.7 percent, beating economist forecasts. Experts took the improvement as a positive sign for efforts to counter the European debt crisis.

  A report by the Saudi American Bank Group projects UAE government investment in non-oil-related sectors would offset any slowdown in oil revenues and provide for robust growth for the country in the coming year. 

 

  Spotlight on the BRIC Economies  

   

    Growth of the Next Decade 

Shortly after stepping up to become the chief economist of Goldman Sachs in 2001—he had previously been co-head—Jim O’Neill was looking for a tent pole idea that he could be known for. The idea that began to crystalize was looking at the world a few decades out and predicting which countries would dominate the economic landscape. There were four that stood out as the new advanced economies.

 

More than a decade later, Brazil, Russia, India, and China—the BRICs—have seen their influence in the world continue to grow. In 2001, the BRICs represented just 9 percent of the global economy. Today, they already represent nearly 18 percent.

 

So far, the biggest error in O’Neill’s thinking is the rate at which the BRICs would expand.  In a follow-up paper in 2003, two of O’Neill’s colleagues projected the BRICs would surpass the G7 by 2037. By 2009, that figure was revised to 2027, and today economists are simply saying, “and maybe even sooner.”

The impetus for O’Neill’s projection a decade ago, though, wasn’t Brazil’s skyrocketing commodity prices, or China’s growing domestic markets, or Russia’s ballooning petroleum revenue. He saw the primary growth vehicle of these countries as their talent markets. Of the group, Russia is the lightweight with the world’s 8th largest population—143 million people. Collectively, BRIC countries comprise more than 40 percent of the world’s population.

More important than the sheer numbers, however, are the moves toward adding worker efficiency and upward mobility. China has gone from being a place to manufacture cheap, low-cost products to becoming one of the most efficient places in the world to not just manufacture, but also design high-tech electronics. Brazil has gone from having notorious income disparity to having a swelling middle class that is starting to bank, purchase luxuries, and plan vacations for the very first time.

What started off as an almost off-hand acronym in a research paper a decade ago has transformed into a term that defines the economic superpowers-in-waiting. In 2009, leaders of the four countries held the first of what has become an annual summit of BRIC leaders and, in 2010, South Africa became a member of the organization now referred to as BRICS.

As an organization of just five countries, though, BRICS is unique in that the members share neither geographical, cultural, political, or even economic heritage. By contrast, when the Group of 7 was formed in 1976, Japan was its only member from outside of Europe or North America.

As much of the West plans for modest growth over the coming years, BRICS represents economies of opportunity in which investment and development is happening to a large degree and where new sources—and demands—for talent are likely to emerge.  

 

   Spotlight on Oregon

     

 State Sees Slow but Steady Recovery

Last year, President Barack Obama put in an appearance at a groundbreaking ceremony for a $6 billion Intel manufacturing facility in Oregon. The world’s largest chipmaker is currently the largest private employer in the state, accounting for nearly 21 percent of all personal income and 20 percent of all employment in Washington County.

The new D1X fabrication facility is also the single largest construction project in the history of the state. “Right now the three largest building cranes in the world are right here in Portland,” says Peter Monsanto, managing partner at Management Recruiters of Portland.

That’s good news for a region that has been hit especially hard during the recent recession. Oregon’s economy has now begun to show encouraging signs, even though employment isn’t expected to pick up significantly until 2013. But, although Oregon probably won’t recover all the jobs it has lost since 2007 until 2014, the private sector gained 38,000 jobs last year, up 2.9 percent from 2010.

Over the past two-and-a-half years, the number of employed Oregonians has increased a little more than 60,000, while the number of unemployed has declined by nearly 53,000. The fact that the decline in unemployment has been matched by an even bigger increase in the number of employed workers is the biggest reason for the state’s declining unemployment rate.

“Virtually all of the economic indicators are pointing up,” says Monsanto. “The flow of positive economic news continues to gain traction and provide hope for a better 2012.” He notes, for example, that the number of building permits issued in February increased by 34 percent, and points to the construction of a new Walmart in southeast Portland, a further indicator of improvement in the building industry.

In addition to construction, sizeable gains are being seen in information technology, professional and business services, education, health care, and leisure and hospitality. Much of the growth is coming from small to midsize companies, where business owners and managers say the improved economic outlook affirms the increased activity they’re starting to see in their industries.

“The impact of Oregon’s wine industry on the economy has grown tremendously over the past five years,” says Monsanto. “A spurt of investment in the industry from 2005 to 2008 boosted acreage, the number of wineries and industry employment. Despite the severe recession, efforts to improve marketing and quality have paid off with increased revenues and a broadening of markets.”

In the manufacturing arena, A&K Development Co., a Eugene company that designs and manufactures equipment for processing crops, especially corn, also is seeing strength in exports, including a recent $2.5 million order from a single customer in Brazil. The company has annual revenue of more than $10 million and about 60 employees.

Royal Caribbean’s Springfield call center, which now has almost 600 employees, contributed to gains in employment. The cruise line hired 205 employees at the end of last year, more than the 180 hires the company had planned to make.

And as Oregon continues its steady recovery progress, it can also take pride in its recent designation as number one in the share of its workers – 5.8 percent – who regularly commute by bicycle to their jobs.

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Global Employment Summary 

• Europe
• Asia & Australia
• The Americas

Spotlight on the Mainland China

Decelerating Growth but Still Growing 

Spotlight on Colorado

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“The scales of the labor market have clearly shifted over the last six-to-twelve months, and now we are seeing that accelerating in the professional ranks. Top talent is no longer looking at a stable job and saying, ‘I’m happy to at least have that.’ Rather, they are opening up when recruiters call and are starting to explore what will really make them happy—financially or otherwise.” 

Total unemployment across the euro area and the European Union continued to rise sharply in the latest reading from Eurostat, the EU’s statistics reporting agency. Starting during the third quarter of 2011, unemployment began a rapid rise growing from 10 per cent to 10.7 per cent in January in the EA, the most recently reported period. The three highest unemployment rates in the EU27 continued to rise including Spain (23.3 per cent), Ireland and Portugal (both 14.8 per cent). Even Germany, which has seen its unemployment rate fall though most of the current economic cycle, ticked up a tenth of a point from 5.7 to 5.8 per cent in January. Unemployment in Switzerland rose from 2.8 per cent to 3.4 per cent during the last half of 2011, but was unchanged in February according to the most recent data.  

In 2011, total employment in the EA grew by 0.2 per cent and 0.3 per cent in the European Union. By contrast, total employment in both the EA and EU27 fell by 0.5 per cent in 2010. However, job growth trended down through 2011 with gains in the first half of the year, partially offset by losses in the last half. In the last quarter of 2011, total employment fell by 0.2 per cent in the EA and 0.1 per cent in the EU27. 

Asia & Australia 

In Hong Kong, average unemployment during the three month period ending in February rose from 3.2 to 3.4 per cent from the period ended a month earlier. Total employment in the special administrative region actually rose, but was offset by unemployment rising at a higher rate. Unemployment may be rising as employment growth in mainland China appears to be slowing from its once more feverish pace.  

In Australia, unemployment fell by 0.1 per cent in February though that was mostly due to an equal drop in the participation rate in the Australian economy. While the country’s mineral wealth and economy continue to grow, the broader economy has continued to falter along with the European slowdown. Gina Rinehart inherited a debt ridden Australian mining company from her father more than two decades ago, but with the rise in commodities prices, she is now projected to outpace Carlos Slim as the wealthiest person on earth in the coming years. 

The Americas 

The United States continued a modest, but decisive rate of job growth in February tacking on 227,000 jobs. Revisions to previous months also added more than 60,000 to the total jobs count. Jobs in February appear to primarily have come from more mid- and senior level positions with net job growth occurring almost entirely among workers with a four-year degree or higher. Critics contend the still deteriorating pace in Europe and the deceleration in China could both cause American growth to slip back to a point where it no longer outpaces natural growth. That is a fear that is not yet backed up by any numbers though.  

In part because of improving conditions in the United States and also because of growing domestic tourism, Brazil’s tourism economy is off to a booming start in 2012 and economists project the sector to grow nearly 8 per cent during the year. That 8 per cent will result in as many as 200,000 jobs in the country. Construction is also just getting up to speed as the country prepares to host the 2014 FIFA World Cup and 2016 Summer Olympics. Both events will add substantial numbers of construction jobs in the intervening years and tourists before, during, and after the events themselves.   

 

       Spotlight on the Mainland China 

 Decelerating Growth but Still Growing 

While most of the world expects to be walking a tightrope between GDP growth and contraction over the next year, Mainland China is expecting 8 per cent growth in 2012. Many business leaders in the West have looked at the dichotomy between anemic local markets and that of China, and tried to tap into that growth. But that growth is slowing, and it may not have enough momentum to help new or expanding entrants into the market. 

A new study by The MRI China Group, an MRINetwork affiliate with offices throughout Mainland China and Asia, shows that North American and European opinions of Greater China’s economic outlook seem more positive than the opinions of those within Mainland China. 

“It’s almost as if the Chinese economy, in every respondent’s perception, was disconnected from the rest of the world,” says Christine Raynaud, CEO of The MRI China Group.  

While 60 per cent of respondents in North America and Europe said they saw a positive financial outlook for China in 2012, only 43 per cent of business leaders working in Mainland China said the same. And for top managers, the positive outlook was 38.5 per cent. Of those based in China, more than 15 per cent held a negative outlook for the country’s economy, while only 10 per cent of those based in North America and Europe had a negative outlook for Greater China. The balance of respondents reported a neutral outlook. 

The deceleration of economic growth in China is being called a soft landing by the Chinese government, while others perceive it as the beginnings of a crash. Real estate prices have been falling for nearly six months in many parts of China. Critics contend, though, that the exponential growth of the Chinese population and economy could allow a correction to occur without the economy actually crashing. 

“Overall, China’s job prospects are still seen as positive, with over half of respondents in life sciences and healthcare, professional services, and retail and consumer sectors providing positive assessments,” says Raynaud. 

According to The MRI China Group’s study, even a majority of respondents—50.5 per cent—saw a positive outlook for the financial industry’s career outlook in Mainland China. In Hong Kong, however, the results were not optimistic, with 55 per cent reporting a negative outlook. 

The world’s second-largest economy appears to be in a strangely unique position where a slowdown still means high single-digit economic growth and job creation.  

“In 2012, global leaders would be cautious not to expect growth and profitability wonders within the slowing growth outlook in a continuing inflationary context, yet the long term prospects of Mainland China remain solid,” says Raynaud.

 Spotlight on Colorado 

     

A Place Where Things Get Done 

Chief among them is the development of policies to encourage the relocation of national and international businesses to Colorado. Spearheaded by Governor John Hickenlooper, favorable tax and economic incentives have already resulted in the relocation of several companies to the state. A couple of years ago, FORTUNE 500 company, DaVita, a leading provider of kidney care services, moved its corporate headquarters to Colorado, and last year the state saw two new FORTUNE 500 companies claiming it as their home base. Arrow Electronics also recently announced it is relocating its global headquarters to Colorado from New York – the largest corporate headquarters to move into Colorado in the state’s history.  

 

A strong focus on developing the burgeoning energy sector has brought the U.S. headquarters of Aluwind, a Danish turbine parts manufacturer, to the area, and GE announced it would expand its investment in Primestar Solar by over $300 million and build a thin-film solar manufacturing facility in Aurora. This facility, one of the largest of its kind in the world, will create 350 jobs and produce enough panels each year to power 80,000 homes. 

 

The technology sector is exploding here, and when companies like these relocate to our state, it results in a huge boost to support services,” says Looney. “The construction industry benefits through the building of corporate headquarters and other facilities as well as the demand for new housing. We’ve seen how small business and entrepreneurs thrive in proximity to large corporations.”  

 

Regulatory reform is also playing a big part in speeding up economic recovery. “It used to take up to a year just to get all the necessary permits to build a facility for a new business,” says Looney. “Now the state is not only fast-tracking that process, but it is also offering economic incentives. Companies receive rebates and tax incentives on permits, re-zoning, and building use fees after the completion of the project.” 

 

Unique job creation incentives are helping to reverse the high unemployment rates of the past few years. For example, a grant recently received in Castle Rock earmarked funds to award rebates to businesses that create new positions and keep them filled for at least two years. “In an effort to further boost the local economy, the amount doubles if the successful candidate lives in Castle Rock,” says Looney. 

Looney is a member of the Economic Development Council and has seen first-hand how well these aggressive tactics are working. “Our vision for Colorado,” she says, “includes successfully branding the state as a place that embraces entrepreneurship, supports a strong business climate and creates jobs.”

The Labor Department reported that the U.S. unemployment rate fell to 8.2 percent in March and total employment rose by 120,000 positions. ADP had projected earlier in the week that 209,000 positions were created in the private sector and a survey of economists by Bloomberg called for a gain of 205,000 positions. Regardless, it was the seventh straight month of job growth of over 100,000 jobs, the approximate level required to outpace population growth.

Growth was concentrated in manufacturing (+37,000), food and beverage establishments (+37,000), and healthcare (+26,000). General merchandise retailers, though, saw a substantial dip (-34,000) for the second month in a row. This comes despite retailers like Target and Gap reporting strong sales during the first quarter. Temporary help services also posted a loss of 7,500 jobs after adding nearly 55,000 in February. 

But while temporary work has fallen, temporary workers are not the only short-term source of additional labor. The number of people working part-time for economic reasons fell by more than 400,000 in March and has fallen by nearly 1.6 million since September. Since total employment has been rising during this time, those 1.6 million positions have been replaced by full-time employees.Employment growth seems to continue to focus on those with Bachelor’s degrees and higher with that segment’s unemployment rate remaining at 4.2 percent for the last three months. Also, the management, business and related occupations unemployment rate has fallen from 4.3 to 4.2 percent over the last year. Also promising is that the average length of unemployment is continuing to fall, with the mean duration of unemployment falling to 39.4 weeks and the median to 19.9 weeks.March’s figures are likely to be seen as a disappointment, but the shortfall in the numbers was localized. Previous disappointing months have shown slowdowns across a variety of sectors, while March’s numbers showed meaningful reversals in only two. Furthermore, this report comes alongside a variety of improving metrics, retail sales earnings for one. Also, the four-week average unemployment claims rate fell on Thursday to its lowest point since 2008. It will take a few more data points, though, to determine if today’s report was a natural fluctuation, or a change of fortunes.

Featured Article

Notable Global Events  

Spotlight on the Middle East & North Africa

A Year After the Arab Spring 

Spotlight on Washington, D.C.

  Featured Article 

Economic Outlook is Modest, with a Chance for Surprise 

           Notable Global Events  

   In November, a rising unemployment rate in Australia began to decelerate while its manufacturing index in December showed expansion for the first time in six months. While the country never entered recession, the last half of 2011 saw a substantial slow down.

German unemployment has managed to continue to fall for more than two and a half years, reaching 5.5 percent in October. It is one of the few bright spots in the EU labor market where total unemployment has risen to 9.8 in October, its highest point since the global downturn began.

  Spotlight on the Middle East & North Africa

  Spotlight on Washington, D.C.  

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Employment Summary

• Europe
• Asia & Australia
• Americas

Spotlight on Latin America

Region Proves Ready for More Stable Growth 

Spotlight on Washington

 

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“You would be hard pressed to find a company that has managed long-term growth without investment. That investment normally needs to begin with human capital. After a deep recession that affects people at every level, trying to expand through increasing workloads can be counterproductive as employees are pushed past their tipping point, leading to increased turnover.” 

Rob Romaine
President of MRINetwork 

     
Employment Summary  

Europe 

In October, unemployment across the EA17 and EU27 hit new high levels making clear it had reversed course from a slide in unemployment rates throughout 2010. In the EU27, the unemployment rate reached 9.8 per cent, exceeding a 9.7 per cent unemployment rate in early 2010 while the EA17 unemployment rate reached 10.3 per cent, rising above 10.2 per cent in early 2010. The rise came with increasing unemployment throughout most of Europe with the only significant exception, Germany seeing its unemployment rate falling from 5.7 to 5.5 per cent from September to October.

 

Continued euro area debt issues have taken European consumer confidence to a two-year low, slipping to 93.7 per cent and many economists expect the continent’s economy to slip into contraction during the fourth quarter.  The Swiss Secretariat for the Economy recently revised down its estimates for 2012 GDP growth from 0.9 per cent to 0.5 per cent. Some economists have projected Swiss unemployment, currently 3 per cent, could rise as high as 3.9 percent before the end of 2012.

 

    

Asia and Australia

 

After a significant drop in Japanese unemployment in September, unemployment rebounded 0.4 per cent in October. The new rate, 4.5 per cent is still in line with pre-tsunami unemployment rates. By the end of the year, Japan’s economy is expected to contract by 0.2 per cent before beginning to grow again in the new year by 2 per cent. 

 

Several Korean industry think tanks have projected a slowing global economy will raise South Korean unemployment from 3.5 to 3.7 per cent. As the European debt situation continues to deteriorate casting a shadow on the global economy, Korean’s central bank has recently lowered its 2012 GDP growth estimates from 4.6 to 3.7 per cent.

 

In Australia, a recent surge in unemployment seems to have decelerated in November with the unemployment trend flat between October and December and with a slight uptick in total employment, 4,200 people.

    

Americas

 

The United States unemployment rate fell rapidly from 9 per cent in October to 8.6 per cent in November, its lowest rate in more than two years. Much of the decline, however, was driven by discouraged job seekers suspending their job search, ostensibly, as the long term unemployed decided to take time off during the holiday. Total employment grew by 120,000 positions month-over-month.

 

Unemployment in Canada rose from 7.1 per cent to 7.4 per cent, however, many economists see it as a short term change of direction. Recent surveys have shown that while employers will remain cautious during the first quarter, they intend to be continue hiring. 

 

 

  Spotlight on Latin America  

 

   Region Proves Ready for More Stable Growth 

As the world has undergone the worst global recession since at least the Great Depression, Latin America’s economy has moved almost in the opposite direction. This has really just been the extension of nearly two decades of improvement in the quality of life in the region.  

Over the last few years, extraction of natural resources, including coal and precious metals, from throughout Central and South America has helped to fuel those economies while their North American and European trading partners entered recession.

Brazil alone has become a leading provider of iron ore, gold, and natural gas, selling much of its products to Asia. But the influx of cash into the Brazilian economy while the world was still in recession put Brazil on a dangerous path toward inflation. The Brazilian Central Bank tried to tighten available credit by raising its benchmark SELIC interest rate as high as 12.5 per cent. While the bank states it would like to see a 4.5 per cent rate of inflation, it is expected to end 2011 with a rate of nearly 6.5 per cent.

Now, the economy has started to slow, and it is estimated to grow just 3.1 per cent in 2012 while meeting its 4.5 per cent inflation target. The slowing economy has caused the bank to reverse course in recent months, cutting the SELIC 100 basis points since August in the hope of giving the economy a “soft landing.” Other Latin American countries that had also been raising interest rates have stopped in recent months, and are now considering cuts as well.

Latin America has seen its fair share of hyperinflation over the last few decades. Should monetary policy continue to succeed as it appears to be, this could help to relieve many of the negative stereotypes about Latin American economies, allowing for more confident foreign investment.”

Argentina, Chile, Brazil, Bolivia and Peru all saw hyperinflation in the 1970s, 80s, and 90s. In 1990, Brazil’s annual rate of inflation rose more than 30,000 per cent and didn’t reach a comparably tame 16 per cent growth rate until 1996.

Latin America is well-positioned to become the economic powerhouse of the 21st century with a combined GDP of more than 6 trillion US dollars. If Latin America were a unified economy, it would be the fourth largest behind the U.S., the EU and China. But unlike China, Latin America remains mineral-rich, and unlike the EU, it has only two predominant languages.

Multiple Latin American countries have seen their currency risk hyperinflation, but a successful recovery will change the way companies look at doing business in Latin America. A more stable path going into the next decade will mean substantial rewards for companies who enter the marketplace and gain market share today. 

 

  Spotlight on Washington State

   

  Diverse Industries Show Strength, Set Stage for Growth

Foundational technology, military, biotech, alcohol; there are not many industries as fundamentally in demand as these – and all four have a growing presence in Washington State.  Seattle is the birthplace of modern computing as much as Silicon Valley ever was.  But while Silicon Valley is most well-known for cranking out high-flying, consumer-facing technology, Seattle has a more subdued record of producing technology products that have deeply engrained customers.

Microsoft may not be around forever, but with 94 per cent of new computers each year being shipped with the Windows operating system, the Redmond-based software behemoth isn’t going anywhere soon. Seattle’s own Amazon.com, which started as a simple online bookstore, has exploded as an online retailer of just about anything imaginable, and now provides the backbone for an immeasurable number of both retail and technology companies.

But as Len Holmes, managing partner of The Lakewood Group, an MRINetwork affiliate outside Tacoma, notes, technology is just one slice of Washington State’s growing pie.

As part of the 2005 Base Realignment and Closure Commission’s plan, Washington became home to one of the first U.S. military bases under the joint jurisdiction of both the Army and the Air Force. Joint Base Lewis-McChord combines two once-neighboring bases and shares their resources. The joint base is able to find efficiencies, theoretically reducing its economic impact. Units, equipment, and personnel from nearby closed military bases have been relocating to Lewis-McChord, providing a strong economic boon to the region.

While the state’s biotechnology firms may be outshone to a degree by its consumer technology companies, that industry added more than $10 billion to the economy in 2010 and managed to grow its workforce nearly 9 per cent from the beginning of the recession in 2007 to the first quarter of 2011.

“Lingering questions over the state of healthcare legislation have recently put a damper on Washington’s enthusiastic biotechnology growth – specifically in the medical devices sector,” says Holmes, “Companies are being cautious about adding headcount as long as uncertainty remains.”

Yet, such companies aren’t seeing their businesses shrink. In fact, they are holding onto cash that could fuel rapid growth once the industry’s future becomes clearer.

Rounding out the state’s economic diversity is a rapidly growing wine business. Over the last two decades, the total acreage devoted to wine making has grown from 11,100 acres to more than 40,000, while the number of wineries grew from less than 80 to more than 700. In fact, nearly 200 new wineries have opened in Washington State since the beginning of the recession.

“There are some very bright spots in Washington’s economy right now, but overall I don’t think we are feeling that buzz yet,” notes Holmes. “What we are seeing is a strong foundation of diverse sectors which are continuing to survive. Once the national economy picks up speed, they will be able to feed off of each other to start building again.”

 

• • • • • • • • • • • • • • • • • 

Featured ArticleBreaking an Unbreakable Cycle  

Notable Global Events  

Spotlight on The Netherlands

Country Weathered the Worst of Downturn 

Spotlight on California High-Tech and Energy Industries Strong in a State Still Steeped in Recession

• • • • • • • • • • • • • • • • • • • • • • • • • • • 

They’re finding new opportunities in the job market. As the economy picks up, the need for experienced professionals is greater, says John Fulcher, director of healthcare at MRINetwork’s Bauer Consulting Group Inc., an El Paso health-care recruiter. “We are seeing the need for more seasoned professionals who require less ramp-up time and are able to make a larger impact in a shorter amount of time,” Fulcher said in April. 

John Fulcher, Bauer Consulting GroupAs quoted on SecondAct.com 

  Featured Article 

September 30, 2011

Breaking an Unbreakable Cycle

During the third quarter, U.S. GDP grew at an annualized rate of 2.5 percent, reducing fears of a double dip recession for now. In August, there were more than 4 million hiring events. That equates to 3.1 percent of the total U.S. workforce getting a new job.  In September, the unemployment rate for those with a four-year degree fell to 4.2 percent and the unemployment rate for those who most recently worked in a management, professional or related occupation was just 4.4 percent.

That is good news for a lot of people—namely those with jobs in fields that require specialized experience and education. But there are also nearly 14 million jobless Americans who want and are searching for a job. The average duration of unemployment now exceeds 40 weeks, excluding those who have taken part-time work or given up searching.

“The country emerged from recession more than two years ago,” says Rob Romaine, president of MRINetwork. “The stock market has in large part returned and corporate earnings are at record highs, but everyone—both consumers and companies—are behaving as if we are still in a recession. Consumers continue to delay purchases and companies are choosing to sit on record amounts of cash rather than invest in resources and human capital.”

To be saving cash in uncertain times makes perfect sense on the individual level. However when looking at the country as a whole, it means hundreds of billions of dollars less in spending and the spending which does occur is at significantly lower profit margins.

“High unemployment doesn’t benefit anyone. As long as spending remains anemic, employment levels will fail to rise significantly, and those who have been out of work for more than a few months are likely to remain out of work for even longer,” says Romaine. “But in a classic catch-22, spending is going to remain weak as long as unemployment is high.”

Like any vicious cycle, this one needs to be broken. Yet, nothing will happen overnight and it might not be possible for there to be one bold action from the government or one strong economic signal from the economy to fix everything.

“This cycle will be broken on the individual level. Individual companies will look at their business and say, ‘despite the macroeconomic outlook, our business is sound and we need to invest to make it better,’” says Romaine. “Unemployed individuals will also have to dig deep and reevaluate what kind of career and lifestyle they are willing to accept.”

For someone who hasn’t found a job after 40 weeks of searching, their prospects aren’t going to change because of a simple resume tweak. Most long-term unemployed are going to have gain additional skills while lowering their salary or title expectations more than they ever thought possible to rejoin the workforce. Yet, these are the individual sacrifices which will break the cycle.

“Coming out of this there hasn’t been and there won’t be a ribbon-cutting moment, just a long series of small decisions that will slowly turn the tide,” says Romaine. “Companies who don’t invest in talent and resources will lag the recovery cycle and eventually fall behind their competition.”

  Notable Global Events 

The Chinese Government has passed legislation requiring foreign workers and their employers to contribute to a social security fund beginning in the New Year. However, details on the benefits those employees could collect, like unemployment and pensions, are unclear.

Growth in some Latin American countries seems to have slowed, allaying concerns of rising inflation. The Chilean Central Bank recently considered cutting its 5.25 percent key interest rate, though, it has chosen to delay that decision for another quarter.

  Spotlight on The Netherlands  

Country Weathered the Worst of Downturn  

The Netherlands is a relatively small country—about twice the size of New Jersey—yet it is an economic powerhouse by many measures. Its 4.4 percent unemployment rate is one of the lowest in the euro area, second only to Austria’s 3.7 percent rate.

Leading into the recent decline, the Netherlands had 26 years of uninterrupted growth. Nearly 75 percent of its half-trillion euro economy is tied to trade with Europe and other partners throughout the world. As a result, when the global economy slowed, total exports shrank by as much as 25 percent, yet total GDP shrank by only 3.9 percent.

“The Netherlands is a particularly well-suited crossroads for Europe. While that means the economy is deeply affected by the global economy, we also have a flexible resilience,” says Jean (JJJ) Theuns, president of MR Human Capital Group, an MRINetwork affiliate in the Netherlands. “The greatest infrastructure of our economy is a highly educated, skilled workforce, and that has remained flexible through the last several decades.”

Perhaps most important for the economy’s long-term outlook, though, is not low unemployment among Dutch professionals, but among the country’s youth. Youth unemployment, which has been blamed for many of the social disruptions that have occurred across North Africa, Europe and now the United States, has remained particularly low in the Netherlands. While the average youth unemployment rate in the EU is 20.9 percent, and 46.2 percent in Spain, the Dutch unemployment rate for those under 25 is just 7.5 percent.

Social policies led by Dutch employment minister Paul de Krom have been focused on keeping young people employed, or if not employed, in some form of education or training. Funding through the Youth Employment Action Plan, though, is running out, and the government has also begun looking to cut emergency expenditures.

In 2012, the Netherlands is expecting to see a GDP budget deficit of 3 percent, though the country’s current total debt burden has already surpassed 60 percent.

The Netherlands may soon be running out of options. It may be necessary in the near future to cut the very services and programs that have minimized the effects of the financial crises and may have been just enough to get the country through the very worst.

The Netherlands and the rest of the world seem to be through the worst of the recession. Should positive trends in the U.S. and Europe continue, government stimulus in the Netherlands will peter out just as organic economic activity begins to take its place.

  Spotlight on California

High-Tech and Energy Industries Strong in a State Still Steeped in Recession

If you want to find a state devastated by the economic downturn, there is nowhere better to look than California. House prices plummeted as much as 70 percent in some markets, construction stopped still, and foreclosures cascaded up and down the state. Peaking at 12.5 percent a year ago, its unemployment rate has been second only to Nevada for much of the last year and unlike many high unemployment states that saw substantial pull-backs early this year; California has fallen only to 11.9 percent.

However, at least in Northern California, some changes seem to be on the horizon, according to Eric Wheel, managing partner of PrincetonOne – Northern California, an MRINetwork affiliate.

“Going into this year there was high demand in only the narrowest of specialties, especially at high-tech firms,” says Wheel. “Over the last several months we’ve seen those narrow bands begin to open and a wider range of positions at a broader range of companies become available. Even marketing and administrative positions are seeing increased demand.”

While demand is increasing, employers are finding that qualified talent is difficult to come by.

“The talent supply for the types of positions we deal in—requiring professional, college-educated candidates—is much more shallow than employers expect, no matter how much they may have been warned,” says Wheel. “Yet, firms that find the right candidates still remain cautious and are implementing extended interview processes.”

Also in Northern California, Karl Dinse, managing partner of Management Recruiters of Sacramento, says he has seen marked improvement among industries related to power generation—both conventional and alternative.

“The demand for talent across all types of energy production in California remains strong, from design and construction to operations. Even solar, despite the very public collapse of Solyndra, remains not just viable but growing strong and searching for experienced talent,” says Dinse.

A recent report by Ernst & Young suggests that large-scale solar projects could become competitive with conventional energy sources within the decade. The majority of the country’s 24,000-megawatts of production currently in planning or construction is in California.

Despite its position at the epicenter of two of the most thriving industries in the country today, California is far from being out of the woods due to its deep-rooted public finance and foreclosure issues, not to mention the stifling unemployment rate.

October 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

According to the Labor Department, 104,000 private sector jobs were added to the U.S. economy in October, while state governments were largely responsible for a loss of 24,000 positions in the public sector. Nonfarm payroll employment rose 80,000 in October and the unemployment rate fell from 9.1 to 9.0 percent. While the total job gain was lower than that of the last few months, there have been substantial upward revisions in recent months. September’s private sector gain, for example, was originally reported at 137,000 and was subsequently revised up to 191,000 in the Labor Department’s most recent report.

October’s job growth was concentrated on service-providing industries with specific gains in food service and drinking establishments, healthcare facilities, and administrative and support services. While less substantial, a gain of 10,000 general merchandise retailer positions is an additional positive indicator for an industry closely affected by consumer confidence. After significant gains in recent months, non-residential specialty trade contractor employment fell by 22,500 positions, the largest loss of any industry during the month.

The unemployment rate for those who hold a four-year college degree and higher rose sharply from 4.2 percent to 4.4 percent. While the gain is attributable to an increase in unemployed candidates – up 73,000 during the month – total employment of such degree holders also increased, albeit at a slower rate of just 20,000. The unemployment rate for those working in management, professional and related occupations fell from 4.5 to 4.4 percent year over year. Meanwhile, the unemployment rate among sales and related occupations, which spiked early in the recession, has fallen from 9.1 to 8.2 percent year over year.

A slight decline in the duration of unemployment in October may indicate a positive shift that will hopefully continue. The mean duration of unemployment fell from 40.5 to 39.4 weeks while the median fell from 22.2 weeks to 20.8. Both of these measures have been steadily rising for more than three years, and these drops pull them back to their levels of more than six months ago.

Even when factoring in continued losses in the public sector, the last three months have seen total average job gains in excess of 110,000 a month, a rate exceeding U.S. population growth. On the whole, the most recent employment measures show a labor market that is holding its own with pockets of growth, pockets of stability, but just one area of decline – the public sector, which is the only substantial source of job losses.