While the nation has been making some headway into getting employment back on track, it has been a mixed bag. The headline unemployment rate has fallen from well above 9% to just above 8% in a few years, but that figure has stagnated of late. Recent hiring data has been going backward, too.
And unfortunately, looking ahead, the forecast for hiring isn’t expected to get much brighter.
For the third quarter of 2012, survey results from the Manpower Employment Survey suggest that employers expect hiring to remain relatively stable from Q2. Less than a quarter expect to add to their work force and 6% expect to see a decline.
Robert Half (NYSE:RHI), the world’s largest specialized staffing firm, has an even bleaker outlook: It reported that only 5% are expected to add workers and that close to 90% expect to maintain current staff levels.
And for now, any improvement for 2013 is hard to foresee as well, thanks to two main factors: a slow pace of economic growth and a large degree of uncertainty.
John Challenger, CEO of the nation’s oldest outplacement consulting firm, Challenger, Gray & Christmas, explained the first issue:
“Unless something changes dramatically in the slow-growth economy, there’s just not a lot of room for growth in terms of hiring either. The key, fundamental issue is just a lack of demand. Companies don’t hire if they don’t need more people, even if they have the cash to do it. And they don’t need more people if they aren’t growing quickly.”
Another reason companies often hire new workers, he went on to say, is in advance of demand: They bring people on board to start new projects, in conjunction with new plans or as part of big company changes. Right now, though, many are in a wait-and-see mind-set because there is so much uncertainty in the future.
The causes of said uncertainty? The same ol’ list. Europe, a big export market for businesses, is an obvious source of concern. And with the presidential election around the corner, companies are worried that taxes could go up and also are unsure what the health care law could mean and what changes it could require.
Oh, and the whole looming fiscal cliff doesn’t really help, either.
Challenger summed up the list nicely: “With all these issues, basically, businesses can’t really see the horizon and are worried. They’re being more cautious.”
John Landers, regional vice president for Robert Half, agreed. “Many firms are taking a measured approach to hiring and waiting for more concrete signs of economic improvement.”
Still, the sun is expected to peek through the clouds here or there. Landers was quick to add that, “At the same time, however, companies risk being unable to take advantage of growth opportunities and becoming less productive if they don’t bring in additional support. So firms will continue to make strategic hires.”
A Robert Half special report explains such strategic hires in what it calls a “tale of two job markets.” While overall employment numbers are indeed bleak, specialized talent is in short supply — especially in technology and finance. This field, although narrow, breaks the trend with its extremely high need for new workers.
A report by the Bureau of Labor Statistics also shows the hiring outlook to be greatly varied across different industries. Challenger, for example, expects the health care sector to undoubtedly grow, and the report similarly lists registered nurses, home health aides and personal care aides as in line for the most new jobs.
The sprinkles of good news don’t end there: In the Southwest and Mountain State regions, for example, Challenger foresees the most growth thanks to the booming energy sector.
And the tech sector can’t be forgotten just because consumer-purchasing power for technology isn’t that strong; it is expected to grow on the business side as companies continue to invest in new technology.
But some regions have specific cause for concern, too. Despite Robert Half’s report that transportation has led hiring projections for three consecutive quarters and is on top once again in Q3, Challenger is cautious.
“The Midwest, which is heavy in the auto sector, has been strong but seems to be slowing down,” he said. And the East (because of its financial sector) and California (because of issues with deficits and bankruptcy) also have rocky roads ahead.
Bottom line? Hiring isn’t expected to boom in the near future, except for a few exceptions. Businesses won’t be looking to bring more workers on board until they feel like they’re standing on more solid economic ground.
And when that ground will stabilize, nobody knows.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.