Bob Marshall’s August 2014 BLS Analysis for Recruiters; 9/5/14
August BLS Preface
Bob Marshall – Training/Coaching Updates:
US Recruiters Network (USRN) National Convention 2014, Minneapolis, MN, October 2-3, 2014
I will be the keynote speaker at the US Recruiters Network (USRN) National Convention in Minneapolis, MN on Thursday and Friday, October 2-3, 2014.
My presentation on Thursday afternoon will be: “How to Teach a Recruiter to Bill $1,010,349.50 in One Year”.
My two presentations on Friday morning will be: “How to Inject Urgency into the Hiring Process” & “Your Desk as a Manufacturing Plant”.
The Newport Group, National Convention 2014, Las Vegas, NV, October 10, 2014
I will be the keynote speaker at The Newport Group National Convention at the New York, New York Hotel/Casino in Las Vegas, NV on Friday, October 10, 2014.
I will present twice on Friday morning. My first presentation will be, “Robocruiter and the Total Account Executive”. My second presentation will be, “How to Inject Urgency into the Hiring Process”. In the afternoon, I will discuss management topics with the TNG management team.
**Now, if you are serious about increasing your billings, give my prized ‘$1,000,000 billing in one year’ student, David Thaler (502-531-9890), a call. He will let you know what I did for him and what I can do for you to help you reach your maximum potential. If you are ready to invest in yourself and to receive the info you need, to bill at high levels, I can give you that information. Then it will be up to you to execute. The ball is in your court.
New for 2014, all of my coaching will be based on my new “TBMG 20 WEEK TRAINING FORMAT”. The syllabus for the format is available upon request.
*The descriptions of my coaching plans, and all of my products, are available to you on my website: www.themarshallplan.org or you can reach me at 770-898-5550 or email me at: firstname.lastname@example.org.
Many of you continue to correspond with me about these monthly BLS analyses and have asked if it is OK to use them in your presentations. The answer is, of course, yes! That is why I spend the time to assemble this information. I would encourage any of you who have that desire to weave any of the information I have printed below into your presentations. I write these analyses for the benefit of our recruitment industry in general and for the members of my distribution list in particular. So use this info as you deem appropriate.
I also write these monthly BLS analyses to not only counterbalance the negative/incorrect press reporting of our general economic state but, more than that, to remind all of my recruitment readers that, at the level we work, there is no unemployment and so we must recruit to find the candidates our client companies so desperately need!
So, to my recruiter colleagues, get out there and do what your name implies…RECRUIT! When your client companies have unique and difficult positions to fill, they need you. When they are being picky, they need you. When they are longing for more production from fewer employees, they need you. Go fill those needs. These should be the halcyon days in the recruitment arena!
Finally, always remember that we are not in an HR business, but in a ‘circumventing the time factor in the hiring sequence’ business—and adding value to our client companies.
SHRM report says manufacturing hiring to rise from year ago
Daily News, September 4, 2014
Hiring in the U.S. manufacturing sector in September is expected to increase compared to the same month in previous years, according to the leading indicators of a national employment report by the Society for Human Resource Management. However, hiring in the service sector this month will decrease year-over-year.
The report’s survey found that 56.8% of manufacturing companies plan to hire in September while 6.3% plan to reduce their workforces for a net increase of 50.5%, up from a net increase of 39.5% in September 2013.
Among service-sector employers, 39.1% plan to add staff in September and 9.2% plan to cut their workforces for a net increase of 29.9%, down from a net increase of 39.4% in September 2013.
“Even though employment expectations are down in the service sector, it isn’t making it easier to find highly skilled job seekers for positions that are of utmost importance to companies,” said Jennifer Schramm, manager of workforce trends at SHRM.
HR professionals’ recruiting challenges for key positions hit 4-year highs for the month of August in both the manufacturing and service sectors. A net of 23.8% of manufacturing respondents had more difficulty with recruiting in August, up from 17.7% in August 2013. A net of 14.5% of service-sector HR professionals had more difficulty recruiting in August compared to the same month in previous years, up from 9.1% a year ago.
A net 9.0% of manufacturing respondents reported increasing new-hire compensation in August, up from 6.1% in August 2013. In the service sector, a net 9.8% of companies increased new-hire compensation in August, down from 14.8% in the same month a year ago.
Why Can’t People Find A Job? One Big Reason Is Obamacare
Forbes, John Goodman, August 25, 2014
Why can’t people find a job? One big reason is Obamacare. Three Federal Reserve Banks – in Philadelphia, New York and Atlanta – have released business surveys that confirm what many of us have been predicting. The new health law is discouraging a significant number of firms from hiring and is also pushing workers into part-time, rather than full time jobs.
The Federal Reserve Bank of Philadelphia survey of business in its region finds that because of Obamacare:
- 18.2% of employers say they cut workers versus 3% who hired more.
- 18.2% say the proportion of part-time workers is higher versus 1.5% who say it is lower.
- 13.7% reported more outsourcing to other firms versus 3% with less outsourcing.
The New York Fed conducted two surveys in its region. Because of Obamacare:
- 21% of manufacturers say they are reducing employment, while 3% are increasing their workforce.
- In the business leaders survey on the same issue the responses were 16.9% versus 1.6%.
- Among manufacturers, 19.3% say they are increasing the proportion of part-time work, while 3.5% say they are reducing it.
- In the business leaders survey on the same question the numbers are 20.2% versus 4.8%.
An Atlanta Fed poll earlier this month found that 34% of businesses planned to hire more part-time workers than in the past, mostly because of a rise in the relative costs of their full-time colleagues.
As for the impact of Obamacare on health care costs, the New York survey is especially instructive:
- More than one third of manufacturers say the Obamacare is increasing costs “a lot” this year and more than half say the health law will increase costs a lot next year.
- Among New York business leaders, more than one in four say Obamacare is increasing costs a lot this year and more than one third predict substantial cost increases next year.
In a previous column I reported on academic studies of the degree to which Obamacare will cause people to work less and produce less:
“University of Chicago economist Casey Mulligan estimates Obamacare lowers the return from working by 10%. As Harvard economics professor Greg Mankiw explains, that implies a long term loss to the economy on the order of 5% of GDP – or more than $800 billion a year at current prices. The indirect cost to the economy, then, equals more than $8,000 per household per year.”
Obamacare comes on top of other things the government is also doing to make job prospects dim. That’s the conclusion of a new academic paper by Stephen J. Davis, of the University of Chicago, and John Haltiwanger, of the University of Maryland. As summarized by Binyamin Appelbaum at The New York Times, the paper argues that “the share of Americans with jobs has declined because the labor market has stagnated in recent decades — fewer people losing or leaving jobs, fewer people landing new ones. This dearth of creative destruction, the authors argue, is the result of long-term trends including a slowdown in small business creation and the rise of occupational licensing.”
Further, both trends are the result of unwise government polices:
“The cost of training workers has increased, partly because the share of all workers who require government licenses has grown by one estimate from about 5% in the 1950s to 29% in 2008. This discourages hiring. So do legal changes that have made it more difficult to fire employees,” the paper says.
Wall Street’s ramping Up Search for Overseas Talent—a greater need for cybersecurity and compliance experts is stoking the requests for visas
Wall Street Journal, MoneyBeat by Sarah Krouse, August 22, 2014
Banks in the U.S. are ramping up efforts to secure overseas talent, with requests for skilled worker visas up sharply at 4 of the 5 largest banks.
Between 2010 and 2013, demand for the visas, known as H-1B permits, increased by more than 10% at Bank of America, Merrill Lynch, Goldman Sachs, J.P. Morgan and Citigroup. Morgan Stanley was the only one of the largest U.S. banks where demand dropped. The figures derive from analysis of U.S. Office of Foreign Labor Certification data by sister title Financial News.
Improved bank performance amid a broader U.S. recovery as well as growing demand for cybersecurity and compliance expertise are stoking the rise, according to immigration lawyers and recruiters.
But so too is the exit from the Troubled Asset Relief Program, which aimed to spur U.S. job growth and put heavier restrictions on hiring overseas workers.
Brian Sullivan, chief executive of executive search firm CT Partners said: “The banks realized that they have to increase their technology and big data capabilities. A lot of it is a compliance and protection mindset. There simply is not the supply of them and that’s why banks are going to get them elsewhere.”
Valentine Brown, a partner at law firm Duane Morris, added that the rise of automated trading in addition to compliance and cybersecurity burdens on banks had contributed to the rise in overseas recruitment. She said: “We’ve definitely seen an increase from the financial sector. Finance is much more intertwined with technology than ever before.”
This year, financial analyst roles were the 8th most frequently requested H-1B visa occupations, representing 2% of all requests, according to research from the American Institute for Economic Research. That is up from 10th place or about 1% of requests in 2013.
Bank of America submitted requests for 1,378 H-1B visas last year, up from 851 in 2010. Demand at J.P. Morgan rose 45% from 2010 to 2013, with the bank requesting 1,331 visas last year. Goldman Sachs requested 1,136 H-1B visas last year, a 19% increase from 2010 and Citi requested 829, up from 554 in 2010. The data also includes visa requests for H-1B1 visas, which are for workers from Chile and Singapore, and E-3 visas, which are for workers from Australia. Such requests cover a wide range of roles from analysts to developers, auditors, engineers, compliance officers and researchers.
Construction employment up in 39 states
Daily News, August 20, 2014
Construction firms added jobs in 39 states in July on a year-over-over basis, according to an analysis of U.S. Department of Labor data released today by the Associated General Contractors of America.
Nevada posted the largest year-over-year percentage increase in construction employment in July at 13.4%. However, Florida led in terms of total number of jobs added with 40,600 jobs added year over year in the Sunshine State.
“The overall trend in construction employment has been very consistent in 2014, with more than 75% of states adding jobs each month on a year-over-year basis,” said Ken Simonson, the association’s chief economist. “However, growing numbers of contractors say they are having trouble finding skilled workers or subcontractors that can supply such workers.”
Two-thirds of US workers work on vacation, survey finds
Daily News, August 19, 2014
U.S. workers far exceed their international counterparts when it comes to working while on vacation, according to a new survey by travel website TripAdvisor. 77% of U.S. respondents report having worked on vacation during the past year, compared to an average of 40% in the 9 other countries included in the poll: Australia, Brazil, France, Germany, Italy, Japan, Russia, Spain and the U.K.
U.S. respondents also receive less paid vacation time than any of the countries surveyed — 18 days in the U.S., compared to the average of 24 days. And 21% of U.S. respondents would take a pay reduction in order to gain more time off.
Checking emails topped the list of work activities on vacation. The survey found 91% of U.S. respondents check emails on vacation, compared to a global average of 65%.
“The TripAdvisor survey shows that Americans receive less vacation time than other countries, and when they do take time off it is often more like a ‘workation’ than a vacation,” said Brooke Ferencsik, director of communications for TripAdvisor. “In today’s highly connected world, most Americans feel the need to stay plugged in even while out of the office.”
The survey included more than 16,100 employed respondents across 10 countries, including more than 2,100 in the U.S.
The new ADP/Moody’s National Employment Report: 75% of all new job growth in August 2014 came from Small and Mid-size Companies
September 4, 2014
Private sector employment increased by 204,000 jobs from July to August (down from the increase of 218,000 jobs last month), according to the August ADP National Employment Report®, which is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
By Company Size
Small businesses: 78,000
1-19 employees 39,000
20-49 employees 39,000
Medium businesses: 75,000
50-499 employees 75,000
Large businesses: 52,000
500-999 employees 5,000
1,000+ employees 47,000
Goods producing 41,000
Service providing 164,000
Financial activities 5,000
Professional/business services 51,000
Goods-producing employment rose by 41,000 jobs in August, up from 23,000 jobs gained in July. The construction industry added 15,000 jobs over the month, slightly above last month’s gain. Meanwhile, manufacturing added 23,000 jobs in August, the highest total in that sector since December 2012.
Service-providing employment rose by 164,000 jobs in August, down from 190,000 (revised downward from 202,000) in July. The report indicates that professional/business services contributed 51,000 jobs in August, down from 60,000 (revised downward from 61,000) in July. Expansion in trade/transportation/utilities grew by 28,000, down from July’s 43,000 (revised downward from 52,000). The 5,000 new jobs added in financial activities were almost half from last month’s number.
“August marks the fifth straight month of employment gains above 200,000, continuing an encouraging trend for the U.S. labor market,” said Carlos Rodriguez, president and chief executive officer of ADP.
Mark Zandi, chief economist of Moody’s Analytics, said, “Steady as she goes in the job market. Businesses continue to hire at a solid pace. Job gains are broad based across industries and company sizes. At the current pace of job growth the economy will return to full employment by the end of 2016.”
(The September 2014 ADP National Employment Reportwill be released at 8:15 a.m. ET on October 1, 2014).
Due to the important contribution that small businesses make to economic growth, employment data that are specific to businesses with 49 or fewer employees is reported each month in the ADP Small Business Report®, a subset of the ADP National Employment Report.
August 2014 Small Business Report Highlights
Total Small Business Employment: 78,000
|●By Sector for 1-49 Employees|
|●By Sector for 1-19 Employees|
|●By Sector for 20-49 Employees|
Bottom-line: To my audience of recruiters, always remember this: Our ‘bread and butter’, especially on the contingency side of the house, has historically been, and continues to be, small and medium-sized client companies. Along with the large companies, these companies need to be in included in your niche!
Job Openings and Structural Unemployment
On August 12th, the BLS reported that there were 4,700,000 job openings on the last business day of June, up from 4,600,000 in May. The 4,700,000 reflects published openings comprised of jobs that are advertised either online or in print format.
The hires rate of 3.5% (up from 3.4% last month) and the separations rate of 3.3% (up from 3.2% last month) were essentially unchanged in June. Within separations, the quits rate (1.8%) and the layoffs and discharges rate (1.2%) were unchanged. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.
Over the last 12 months, the movement of job openings has varied. From June 2013 to January 2014, the number of job openings was little changed, decreasing by 97,000. However, from January 2014 through June 2014, the number of job openings trended upward by an average 159,000 job openings per month, for a total increase of 797,000 openings.
(The Job Openings and Labor Turnover Survey results for July 2014 are scheduled to be released on Tuesday, September 9, 2014).
As we recruiters know, that 4,700,000 number only represents 20% of the jobs currently available in the marketplace. The other 80% of job openings are unpublished and are filled through networking or word of mouth or by using a RECRUITER. So, those 4,700,000 published job openings now become a total of 23,500,000 published and hidden job orders.
In August there were 9,591,000 unemployed workers. What was the main reason why those workers were unemployed? Two Words: Structural Unemployment. If we can’t figure out how to educate and/or reeducate those 9,591,000 unemployed, then they will keep reappearing each month as a BLS unemployment statistic—as they have. In the meantime, our recruitment marketplace flourishes!
Online Labor Demand Rises 164,600 in August
September 3, 2014
- August posts strong increase following small loss in July
- Large gains for California, Michigan, Illinois, and Florida
Online advertised vacancies gained 164,600 to 5,209,200 in August, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series released September 3, 2014. The July Supply/Demand rate stands at 1.9 unemployed for each advertised vacancy with a total of 4,600,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was 9,700,000 in July.
“Labor demand has shown some renewed strength over the past 3 months with an average increase of 102,000 per month,” said Gad Levanon, Director of Macroeconomics and Labor Markets at The Conference Board. “The 2014 gains through August are an improvement over the slower-paced gains of 2013 for the same time period.”
In August the professional occupations continued to show improvements after earlier 2014 losses. Gains included Business and Finance (10,700), Computer and Math (19,300), and Healthcare (24,200). The Services/Production occupations also showed gains in Office and Administration (20,100), Sales (13,900), and Food Preparation (12,300).
The Conference Board Help Wanted OnLine®Data Series (HWOL) measures the number of new, first-time online jobs and jobs reposted from the previous month for over 16,000 Internet job boards, corporate boards and smaller job sites that serve niche markets and smaller geographic areas.
(The September 2014 Conference Board Help Wanted OnLine® (HWOL) Data Serieswill be released at 10:00 am ET on Wednesday, October 1st, 2014).
In August, 2014 the regular unemployment number was 6.1%, but the broader U-6 measure was 12.0%, almost twice as high as the regular unemployment figure.
The above 12.0% is referred to as the U6 unemployment rate (found in the monthly BLS Employment Situation Summary, Table A-15; Table A-12 in 2008 and before). It counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts “marginally attached workers and those working part-time for economic reasons.” Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the “marginally attached workers” include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 year and over.
Here is a look at the August U-6 numbers for the past 11 years:
August 2013 13.7%
August 2012 14.7%
August 2011 16.2%
August 2010 16.7%
August 2009 16.8%
August 2008 10.9%
August 2007 8.4%
August 2006 8.4%
August 2005 8.9%
August 2004 9.5%
August 2003 10.2%
The August BLS Analysis
The unemployment rate is published by the Bureau of Labor Statistics, a division of the US Department of Labor. The rate is found by dividing the number of unemployed by the total civilian labor force. On September 5th, 2014, the BLS published the most recent unemployment rate for August, 2014 of 6.1% (actually it is 6.150, down by .048% from 6.198% in July, 2014).
The unemployment rate was determined by dividing the unemployed of 9,591,000 (—down from the month before by 80,000—since August, 2013 this number has decreased by 1,665,000) by the total civilian labor force of 155,959,000 (down by 64,000 from July, 2014). Since August 2013, our total civilian labor force has increased by 524,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 248,229,000. This is an increase of 206,000 from last month’s increase. In one year’s time this population has increased by 2,270,000. The Civilian Noninstitutional Population has increased each month…
|Up from July 2014||by||206,000|
|Up from June 2014||by||209,000|
|Up from May 2014||by||192,000|
|Up from April 2014||by||183,000|
|Up from March 2014||by||181,000|
|Up from February 2014||by||173,000|
|Up from January 2014||by||170,000|
|Up from December 2013||by||170,000|
|Up from November 2013||by||178,000|
|Up from October 2013||by||186,000|
|Up from September 2013||by||213,000|
|Up from August 2013||by||209,000|
|Up from July 2013||by||203,000|
|Up from June 2013||by||204,000|
|Up from May 2013||by||189,000|
|Up from April 2013||by||188,000|
|Up from March 2013||by||180,000|
|Up from February 2013||by||167,000|
|Up from January 2013||by||165,000|
|Up from December 2012||by||313,000|
|Up from November 2012||by||176,000|
|Up from October 2012||by||191,000|
|Up from September 2012||by||211,000|
|Up from August 2012||by||206,000|
|Up from July 2012||by||212,000|
|Up from June 2012||by||199,000|
|Up from May 2012||by||189,000|
|Up from April 2012||by||182,000|
|Up from March 2012||by||180,000|
|Up from February 2012||by||169,000|
|Up from January 2012||by||335,000|
|Up from December 2011||by||2,020,000|
And this month the BLS has decreased the Civilian Labor Force to 155,959,000 (down from July by 64,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 92,270,000 ‘Not in Labor Force’—up from last month’s 92,001,000. Since August, 2013, 1,745,000 US workers have vanished! Where did those 1,745,000 potential workers disappear to in one year’s time? I am assuming they still have to eat and pay their rent. They still need money, don’t they? The government tells us that these NILFs got discouraged and just gave up looking for a job. My monthly recurring question is: “If that is the case, how do they live when they don’t earn any money because they don’t have a job? Are they all relying on the government to support them??”
This month our Employment Participation Rate—the population 16 years and older working or seeking work—fell again to 62.8%. This month now shares the historically low rate of 62.8% recorded in April, May and June of this year and October and December of last year. And, before those six months, the lowest rate since March 1978—just over one year into President Carter’s term of office, 36 years ago!
Final take on these numbers: Fewer people looking for work will always bring down the unemployment rate.
Anyway, back to the point I am trying to make. On the surface, these new unemployment rates are scary, but let’s look a little deeper and consider some other numbers.
The unemployment rate includes all types of workers—construction workers, government workers, etc. We recruiters, on the other hand, mainly place management, professional and related types of workers. That unemployment rate in August was 3.4% (this rate dropped .1% from last month’s 3.5%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in August was 3.2% (this rate rose .1% from last month’s 3.1%).
Now stay with me a little longer. This gets better. It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is. Without boring you any more than I have already, let me add here that Milton Friedman (the renowned Nobel Prize-winning economist), is famous for the theory of the “natural rate of unemployment” (or the term he preferred, NAIRU, which is the acronym for Non-Accelerating Inflation Rate of Unemployment). Basically, this theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it. Economists often settle on 5%, although the “New Normal Unemployment Rate” has been suggested to fall at 6.7%.
Nevertheless (if you will allow me to apply a ‘macro’ concept to a ‘micro’ issue), if this rate is applied to our main category of Management, Professional and Related types of potential recruits, and/or our other main category of College-Degreed potential recruits, we are well below the 4-6% threshold for full employment…we find no unemployment! None! Zilch!
THE IMPORTANCE OF GDP
“The economic goal of any nation, as of any individual, is to get the greatest results with the least effort. The whole economic progress of mankind has consisted in getting more production with the same labor…Translated into national terms, this first principle means that our real objective is to maximize production. In doing this, full employment—that is, the absence of involuntary idleness—becomes a necessary by-product. But production is the end, employment merely the means. We cannot continuously have the fullest production without full employment. But we can very easily have full employment without full production.”
–Economics in One Lesson, by Henry Hazlitt, Chapter X, “The Fetish of Full Employment”
On August 28th, the Bureau of Economic Analysis announced the 2nd quarter, “second” estimate, of our real gross domestic product (GDP) — the output of goods and services produced by labor and property located in the United States. GDP increased at an annual rate of 4.2% in the second quarter of 2014 (that is, from the first quarter of 2014 to the second quarter of 2014), according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1%.
The GDP estimate is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 4.0%. With this second estimate for the second quarter, the general picture of economic growth remains the same; the increase in nonresidential fixed investment was larger than previously estimated, while the increase in private inventory investment was smaller than previously estimated.
The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
*The economy needs to expand at about 3% to keep the unemployment rate from rising.
(The “third” estimate for the second quarter 2014, based on more complete data, will be released on September 26th, 2014).
IT IS IMPOSSIBLE FOR UNEMPLOYMENT EVER TO BE ZERO
‘Unemployment’ is an emotional ‘trigger’ word…a ‘third rail’, if you will. It conjures up negative thoughts. But it is important to realize that, while we want everyone who wants a job to have the opportunity to work, unemployment can never be zero and, in fact, can be disruptive to an economy if it gets too close to zero. Very low unemployment can actually hurt the economy by creating an upward pressure on wages which invariably leads to higher production costs and prices. This can lead to inflation. The lowest the unemployment rate has been in the US was 2.5%. That was in May and June 1953 when the economy overheated due to the Korean War. When this bubble burst, it kicked off the Recession of 1953. A healthy economy will always include some percentage of unemployment.
There are five main sources of unemployment:
- Cyclical (or demand-deficient) unemployment – This type of unemployment fluctuates with the business cycle. It rises during a recession and falls during the subsequent recovery. Workers who are most affected by this type of unemployment are laid off during a recession when production volumes fall and companies use lay-offs as the easiest way to reduce costs. These workers are usually rehired, some months later, when the economy improves.
- Frictional unemployment – This comes from the normal turnover in the labor force. This is where new workers are entering the workforce and older workers are retiring and leaving vacancies to be filled by the new workers or those re-entering the workforce. This category includes workers who are between jobs.
- Structural unemployment – This happens when the skills possessed by the unemployed worker don’t match the requirements of the opening—whether those be in characteristics and skills or in location. This can come from new technology or foreign competition (e.g., foreign outsourcing). This type of unemployment usually lasts longer than frictional unemployment because retraining, and sometimes relocation, is involved. Occasionally jobs in this category can just disappear overseas.
- Seasonal unemployment – This happens when the workforce is affected by the climate or time of year. Construction workers and agricultural workers aren’t needed as much during the winter season because of the inclement weather. On the other hand, retail workers experience an increase in hiring shortly before, and during, the holiday season, but can be laid off shortly thereafter.
- Surplus unemployment – This is caused by minimum wage laws and unions. When wages are set at a higher level, unemployment can often result. Why? To keep within the same payroll budget, the company must let go of some workers to pay the remaining workers a higher salary.
Other factors influencing the unemployment rate:
- Length of unemployment – Some studies indicate that an important factor influencing a workers decision to accept a new job is directly related to the length of the unemployment benefit they are receiving. As of August 25th, workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although 8 states provide fewer weeks and 2 provide more.(Emergency Unemployment Compensation, a temporary federal program that provided additional weeks of benefits to workers who exhausted their regular state UI before finding a job, expired at the end of 2013 and efforts to revive it have been unsuccessful so far.)Studies suggest that additional weeks of benefits reduce the incentive of the unemployed to seek and accept less desirable jobs.
- Changes in GDP – Since hiring workers takes time, the improvement in the unemployment rate usually lags behind the improvement in the GDP.
WHERE RECRUITERS PLACE
Now back to the issue at hand, namely the recruiting, and placing, of professionals and those with college degrees.
If you take a look at the past few years of unemployment in the August “management, professional and related” types of worker category, you will find the following rates:
August 2013 3.8%
August 2012 4.5%
August 2011 4.9%
August 2010 5.1%
August 2009 5.4%
August 2008 3.3%
August 2007 2.6%
August 2006 2.4%
August 2005 2.5%
August 2004 2.9%
August 2003 3.6%
August 2002 3.4%
Here are the rates, during those same time periods, for “college-degreed” workers:
August 2013 3.5%
August 2012 4.1%
August 2011 4.3%
August 2010 4.6%
August 2009 4.7%
August 2008 2.7%
August 2007 2.1%
August 2006 1.8%
August 2005 2.1%
August 2004 2.7%
August 2003 3.1%
August 2002 2.8%
So, while Augusts’ 2014 rates for these two categories, 3.4% and 3.2%, respectively, are trending positively, when looking at the big picture, it’s not anything to be very happy about either—especially when we see how well we had it during the 2004-2008 time frame. But regardless, these unemployment numbers usually include a good number of job hoppers, job shoppers and rejects. We, on the other hand, are engaged by our client companies to find those candidates who are happy, well-appreciated, making good money and currently working and we entice them to move for even better opportunities—especially where new technologies are expanding. This will never change. And that is why, no matter the unemployment rate, we still need to market to find the best possible job orders and we still need to recruit to find the best possible candidates.
Below are the numbers for the over 25 year olds:
Less that H.S. diploma – Unemployment Rate
H.S. Grad; no college – Unemployment Rate
Some College; or AA/AS – Unemployment Rate
BS/BS + – Unemployment Rate
Management, Professional & Related – Unemployment Rate
For a total Management, Professional & Related workforce of…(,000)
Management, Business and Financial Operations – Unemployment Rate
Professional & Related – Unemployment Rate
Sales & Related – Unemployment Rate