Bob Marshall’s October 2016 BLS Analysis for Recruiters; 11/4/16
October BLS Preface
TBMG Coaching Updates and News
Bob Marshall – Coaching & Speaking Updates:
Greensboro, North Carolina, November, 15th-16th, 2016
I will be working with one of my clients in-office on Tuesday and Wednesday, November 15th-16th, 2016.
* Special North Carolina Note:
So, for those of you in North Carolina, if you are interested in my in-office training (group and/or individual desk-level) and are available for that training during the week of November 14th-18th, please let me know. I can arrange a one-day tune-up or a two-day regular visit; I can concentrate on one recruiter or focus on the whole office. And some sample topics can include anything from how to pick an MPC, how to construct a scintillating FAB presentation, how to Qualify JOs, how to establish elegant rapport through elegant communication and how to work your Desk as a Manufacturing Plant. All of the cards are on the table…you pick!
Since I will already be in NC, I will offer a substantial discount on my usual in-office fees and no charge for my airfare. First come, first served, so contact me for specific details as soon as possible
Why You Need A Coach!
“A coach is someone who tells you what you don’t want to hear, who has you see what you don’t want to see, so you can be who you have always known you could be.”
—Tom Landry (head coach, Dallas Cowboys, 1960-1988)
“Practice doesn’t make perfect. Perfect practice makes perfect.”
—Bobby Ross (Georgia Tech football coach, 1987-1991)
“I’ve known, worked with, observed, analyzed and watched Bob’s evolution since 1980—over 30 years!! In my opinion, there is not a person in his space more valuable to you than Bob Marshall. As a student of our business, a trainer in our business and an overall consultant in our business, Bob has no peer in my opinion. I don’t believe there is another person you could work with that would bring to each of you, as well as your AE’s, a greater insight into the dynamics of our profession. This insight, coupled with his passion, has enabled me to rate him #1 in his field.”
—Alan Schonberg (legendary CEO, Management Recruiters International, February, 2013)
So for those of you who have been toying with the idea of working with a recruitment coach (like me), now may be the time. Only you can come to that decision point. According to an old proverb, “When the student is ready, the teacher will appear.”
If you are ready, so am I.
Top Echelon, Tuesday Recruiter Coaching Series, Webinar, December 13th, 2016
My next Top Echelon presentation will be on Tuesday afternoon, December 13th, 2016, at 1pm, Eastern Time. This Recruiter Coaching Series will be for TE members. This presentation is entitled, “Make Placements by Overcoming Objections with Contract Staffing”.
Taking the first step…
Over 36 years ago I began a career that turned out to be the most dynamic and rewarding professional move I have ever made. With the opportunity to earn an unlimited income at my fingertips, I began my career as a Recruiter.
Soon I became a student of the business and transitioned into Coaching. I traveled extensively and learned and listened and I packaged my material in a unique way. I studied many of the top producers in the recruiting industry and developed a series of training tools based on their proven success—training techniques that work time and time again.
I developed these tools and coaching techniques to help others achieve their goals as top producing professional recruiters. I continue to base all of my coaching and training tools on the same “nuts and bolts” approach I used as a recruiter.
I realize that taking that first step to engage a Coach to help you reach a higher level of production is not as easy as it sounds. After all, your training investment – and your time – are important and deserve every consideration. I share your feelings. I believe that how you approach your recruitment career matters…that you should get what you pay for, and then some…that you should enjoy your time with your Coach as you are benefiting from it…and that you should never settle for the ordinary.
If you are ready to take the first step, you can read descriptions of my coaching plans, and all of my products, on my website @ www.themarshallplan.org. Then, call me directly at 770-898-5550 or email me @ email@example.com.
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.
US adds fewest jobs in 5 months, ADP reports
Daily News, November 2, 2016
US private-sector employment rose by 147,000 jobs in October from September, according to the ADP national employment report. This is down from the total number of jobs added in September, which was revised up from 154,000 to 202,000.
Job gains fell short of estimates and marks the smallest increase since May and the third worst report in the past year, CNBC reported.
“Job growth remains strong although the pace of growth appears to be slowing,” said Mark Zandi, chief economist of Moody’s Analytics. “Behind the slowdown is businesses’ difficulty filling open positions. However, there is some weakness in construction, education and mining.”
The number of goods-producing jobs fell by 18,000, led by a loss of 15,000 construction jobs. Service-providing jobs rose by 165,000, including 69,000 jobs in the professional and business sector and 38,000 jobs in leisure/hospitality.
“Job growth appears to be shifting from small to large companies due to the lessening impact the global economic environment had on large companies earlier in the year,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “This is also true because large companies often have the resources to attract workers with better pay and benefit packages.”
Large businesses added 64,000 jobs, the same as in September. Midsize businesses added 48,000 jobs in October, down from last month’s gain of 56,000. Small businesses added 34,000 jobs in October, also unchanged from September.
The ADP National Employment report is produced by ADP (NASD: ADP) in collaboration with Moody’s Analytics.
Silicon Valley Survey finds 49% expect Q4 Hiring Needs to rise
Daily News, October 31, 2016
Despite the rattling effect of recent layoffs at a few tech firms in Silicon Valley, employers in California’s Silicon Valley have optimistic hiring plans for the fourth quarter, according to West Valley Staffing Group’s latest Silicon Valley economic forecast survey.
The quarterly survey found 49.0% of hiring managers predict their hiring needs to increase in the fourth quarter and 40.0% believe their hiring trends will remain steady. Only 11.0% of hiring managers expect their needs to decrease in the fourth quarter.
“Downsizing workforces is always a spooky thought,” said Charlie Allport, executive VP of West Valley Staffing Group. “However, innovation and the promise of new technologies are spurring economic growth and will create new opportunities in the future.”
The survey included more than 1,000 hiring managers from different industries, including high tech, manufacturing, electronics, finance, semiconductor, medical, aerospace and alternative energy.
GDP jumps to 2.9% in Q3, fastest rate in 2 years
Daily News, October 28, 2016
US real gross domestic product grew at an annual rate of 2.9% in the third quarter, according to the “advance” estimate of GDP growth released today by the US Commerce Department.
In the second quarter, real GDP advanced 1.4%.
The economy grew in the third quarter at the fastest pace in 2 years, aided by a spike in soybean and other US exports and a rebound in the size of inventories companies keep on hand for sale, MarketWatch reported. The acceleration in growth, along with a steady pace of hiring, is expected to prod the Federal Reserve to raise a key US lending rate in December, MarketWatch noted.
Jason Furman, chairman of the Council of Economic Advisers, also commented on the GDP number in a blog post:
“The economy grew 2.9% at an annual rate in the third quarter of 2016, a noticeably faster pace than in the first half of the year,” Furman wrote. “Exports, which have faced significant headwinds in recent years from slow growth abroad, grew at an annual rate of 10.0% in the third quarter, their fastest quarterly pace since 2013. Consumer spending continued to grow at a solid pace in the third quarter, while inventory investment (one of the most volatile components of GDP) boosted GDP growth after subtracting from it in the prior 5 quarters. In contrast to the pattern of recent quarters, business fixed investment also contributed positively to GDP growth, though it continues to be restrained by slower global growth.”
Third are unhappy with career progression, survey finds
Daily News, October 26, 2016
While US employees are generally satisfied at work and with their field today, 29% are not happy with their career progression and 41% believe they are not on the path to their dream job, according to Addison Group’s third annual workplace survey. The majority of US employees, 55%, are worried they should be doing more now to get where they want to be in the future.
The survey found salary matters most in a job to all employees. Not making enough money ranked as the top reason for leaving the last job at 43%, followed by not enjoying the work they were doing at 32% and problems with management at 29%.
The survey also found that one in three females, 32%, are unhappy with their career progression, in contrast to 25% of males who feel the same. The data also found 37% of women believe being a manager has the potential to advance their career, and 51% are interested in becoming a manager. Yet, only 39% of women currently manage others, significantly lower than the 60% of men.
Older generations tend to be more content in their field of work, with 82% of baby boomers reporting they are happy in their field compared to only 74% of millennials. The survey also found 67% of millennials want to be a manager, compared to 58% of the broader workforce.
“While job satisfaction is high across the board, the workforce has significant concerns around the value of additional education, the speed of career progression, the viability of management opportunities and their ability to retire,” said Addison Group CEO Thomas Moran. “HR professionals’ ability to better understand the workforce and ongoing marketplace trends like these will enable them to best align their recruitment and retainment strategies with what opportunities top talent are looking for in their careers.”
The study was commissioned by Addison Group and conducted by Edelman Intelligence. It included 1,407 US employees and was fielded between April 25 and April 30, 2016.
CTO is highest-paid Digital Marketing Pro: $241,000 Salary At High End
Daily News, October 19, 2016
Chief technology officers rank as the highest-paid digital marketing professionals in 2016 with a salary range of $140,000 to $241,000, according to a report by Mondo, a provider of technology and marketing staffing. Other high-paying positions include chief marketing officer with a salary range of $140,000 to $238,000, and VP of eCommerce with a salary range of $138,000 to $226,000.
“The demand for digital marketing professionals continues to be incredibly strong, especially for marketing automation professionals and UI/UX designers,” said Gianna Scorsone, VP of marketing and sales operations for Mondo. “In addition, we have seen new tech-driven marketing positions arise, such as the chief technology officer and demand generation analyst.”
Proofreaders saw the biggest spike in salaries from 2015 to 2016, with salaries up 10% to a range of $41,000 to $65,000. Other positions with the most significant salary increase, 9%, from 2015 to 2016 include:
*Digital content strategist: $76,000 to $121,000
*Director of social media: $46,000 to $117,000
*Director of eCommerce: $134,000 to $184,000
*VP of eCommerce: $133,000 to $226,000
“Another trend we see in digital marketing is the growth of the ‘elastic workforce’ with ‘elastic’ or contract workers now making up 34% of the US workforce,” Scorsone said.
The salary data is based on recent survey data and Mondo’s thousands of digital marketing placements in San Francisco, Los Angeles, Washington, Philadelphia, Denver, Boston, Chicago, Dallas and Atlanta.
4 newspaper headlines tell the whole story of the US labor market
Yahoo Finance, Myles Udland, October 18, 2016
One of the biggest economic trends in the US over the last several years has been a rapidly tightening labor market. Said in plain English, this means the balance of power is shifting from employers to employees.
As a result, we’ve seen wages rise to post-financial crisis highs while the rate of people quitting their jobs also remains near cycle highs. This has been accompanied by the tumbling unemployment rate and the plunge in initial claims for unemployment insurance.
A rise in worker pay is seen as a sign that employers are turning to increased economic incentives to retain workers amid a shrinking pool of available labor. An elevated quits rate can be interpreted as something like a sign of how bold workers feel, as you’re unlikely to quit one job without being reasonably confident you can find another.
US workers are quitting their jobs at the fastest rate since 2007 while wages are rising at the quickest pace since the Financial Crisis.
Underneath this data, however, there are anecdotal signs that the labor market may be even tighter than some economists — particularly those at the Federal Reserve who remain reluctant to raise interest rates — believe.
Neil Dutta, an economist at Renaissance Macro, passed along four recent media reports in an email Tuesday morning that show labor regaining much of the power it lost during the financial crisis, with each of these reports including the clearest sign that workers feel emboldened amid a tighter labor market — going on strike.
These reports include striking cafeteria workers at Harvard, striking workers shutting down two plants in Kentucky that make Jim Beam bourbon, as well as a threatened strike from actors in the video game industry and a potential strike from transit workers in Philadelphia next month.
These reports fall firmly into the camp of what many call “anecdata,” or conclusions derived from reading things like news reports or talking to folks on the street, rather than hard collected data.
But at this point in the labor cycle — when then US economy has added nearly 15,000,000 jobs since the financial crisis — it is these below-the-surface indicators that perhaps paint the clearest picture of dynamics we’re seeing impact the economy.
And workers either walking off the job — or threatening to — is not something we see when work is hard to come by.
Or as Dutta wrote Tuesday morning: “Detect a pattern here?”
IT job growth decelerates in September, Techserve Alliance reports
Daily News, October 17, 2016
The number of IT jobs in the US edged up 0.17% in September from August to almost 5,200,000, reported TechServe Alliance, an association of IT and engineering staffing companies.
“While the rate of growth in IT employment continues to decelerate, it is important to put this trend in context,” said TechServe Alliance CEO Mark Roberts. “While demand is not as robust in certain sectors and for some skill sets, there continues to be a chronic shortage for high demand IT skills. Further, despite the deceleration in the rate of growth, IT employment continued to outperform the overall job market on both a month-over-month and year-over-year basis.”
Year over year, IT employment in the US rose by 3.1% in September, representing an increase of 156,900 IT jobs.
The number of US engineering jobs edged up 0.1% in September from August to more than 2,500,000 jobs. Year over year, the increase was a 0.7%, representing 17,200 engineering jobs.
Jobs requiring preparation, social skills or both expected to grow most
Pew Research Center, Drew Desilver, October 13, 2016
Much of U.S. job growth over the past 35 years has been in occupations that require higher levels of education, training and experience, according to a recently released Pew Research Center report. And based on our analysis of official government job-growth projections, that trend seems likely to continue.
Employment in occupations requiring average to above-average levels of preparation – a metric that combines formal education, on-the-job training and prior related experience – is expected to grow 7.9% between 2014 and 2024, according to the federal Bureau of Labor Statistics. That equates to nearly 6,000,000 of the 9,700,000 jobs predicted to be added over that time.
Employment in occupations requiring below-average preparation, on the other hand, is projected to grow by only 5.1%, or the equivalent of about 3,700,000 jobs. (The BLS projects overall 2014-2024 job growth at 6.5%.)
The differences in projected growth were even more pronounced when looking at social skills, which Pew Research Center defines as encompassing interpersonal skills, written and spoken communication skills, and management or leadership skills. Employment in occupations that require average to above-average levels of such social skills is projected to grow by 8.1%, versus just 4.4% growth for occupations requiring below-average levels of those skills.
The strongest employment growth is actually projected to occur in occupations with below-average preparation requirements but higher required levels of social and physical (though not analytical) skills; that group includes such jobs as orderlies, home health aides, physical therapy assistants and bartenders. Those jobs may not pay much – the 2015 median salary for occupations in this group ranged from $19,530 to $56,340 – but collectively they’re expected to grow 13.1% by 2024, about double the overall projected growth rate.
In general, though, the jobs that require less education, training and/or experience are the ones expected to grow the least, regardless of what their other skill requirements are. The worst prospects are for the 860,000 or so people working as bank tellers, data-entry keyers, switchboard operators and similar jobs, all of which have average to above-average requirements in analytical skills only and have below-average preparation requirements. Such jobs, as the examples above suggest, are ripe for automation, and in fact many already have been lost to modern technology.
To determine the specific kinds of occupations with the most growth potential, we combined the job preparation and skill ratings the Center developed for its report with the projections from the Bureau of Labor Statistics’ Occupational Outlook Handbook. Ratings and projections were available for 541 separate occupations, in 24 different sectors spanning the U.S. civilian workforce. All together, they cover nearly 149,000,000 jobs, or virtually the entire workforce. (More than 7,000,000 Americans, according to the BLS, work more than 1 job.)
If we consider the BLS’s full set of employment projections (which includes 30 or so “catchall” occupations covering an additional 1,500,000 jobs), the strongest growth is foreseen for operations research analysts, statisticians, actuaries and other mathematics-oriented jobs: Employment in math occupations is expected to grow by 28%, though that’s off a fairly small base (the group had only 152,400 jobs in 2014). Health care (18.6%), personal care and service (13.1%) and computer and information technology (12.5%) were the other employment sectors with particularly fast projected growth. On the other hand, employment in production occupations is expected to fall by 3.1% by 2024 (representing more than 282,000 jobs), and employment in farming, fishing and forestry occupations is projected to shrink by 5.9%.
Since education is a key component of job preparation, we also took a closer look at what the BLS deems the typical education level required for entry-level positions in each of the occupations it projected. More than half (55%) of all jobs in 2014 either required no formal educational credential at all or, at most, expected a high-school diploma or its equivalent, according to the BLS. But employment in those occupations is projected to grow only 5.4% by 2024. On the other hand, occupations requiring a bachelor’s degree or higher accounted for less than a quarter of all jobs in 2014, but their collective employment was expected to grow by 8.8% over the following decade.
One frequently heard critique of today’s economy, especially since the Great Recession, is that most newly created jobs don’t pay very well. There’s some truth in that: The BLS data indicate that nearly half of the jobs predicted to be created by 2024 are in occupations with median wages of less than $40,000 a year. Bear in mind, though, that such occupations already accounted for 59% of all jobs in 2014. In fact, the fastest growth is projected to come in higher-paying occupations: Those with median annual wages of $60,000 and higher are projected to grow at a combined rate of 9.3%. Those occupations overwhelmingly require higher levels of preparation and above-average levels of social skills, analytical skills or both.
Most workers happy with managers but don’t covet their jobs, survey finds
Daily News, October 11, 2016
Many employees like their bosses, but managers still have much work to do, according to “The State of the Manager-Employee Relationship” report released by Accountemps, a division of Robert Half International Inc.
The research found nearly two-thirds of workers surveyed, 64%, said they are happy with their supervisors, and another 29% are somewhat happy with their bosses. Only 8% of workers give their manager a thumbs down.
The survey also found most professionals, 67%, don’t aspire to their boss’s job. Among those who don’t aspire to their boss’s job, 45% cited the added stress and responsibility as the primary reasons and 27% cited a lack of desire to manage others.
“Managers can sometimes get a bad rap, but in reality most professionals understand that the job is tough and complex and may not be for everyone,” said Bill Driscoll, district president for Accountemps. “The challenge for many bosses today isn’t just identifying a successor but convincing that professional to step up to the challenge.”
Additional findings from the survey include:
*Workers age 18 to 34 are most eager to move up to their manager’s position, with 56% saying they want their boss’s job compared to 34% of respondents age 34 to 55 and 13% of those 55 and older.
*34% have left a job because of a strained relationship with a supervisor, and 17% would feel happy if their boss left the company.
*12% of professionals between the ages of 35 and 54 are unhappy with their boss, the largest of any age group. This group also was the most likely to have quit a job over a strained or dysfunctional relationship with a manager.
*Half of workers surveyed said their boss understands the demands of their job, but 16% noted their supervisor has little understanding of their day-to-day reality.
*49% of millennials feel their boss recognizes their potential, compared to 67% of workers 55 and older.
*23% of workers consider their boss a friend, but the majority, 61%, cited their relationship as strictly professional.
*The youngest group of workers had the most extensive wish lists. Most notably, compared to the other age groups, these professionals were more likely to want their managers to provide better communication and listening, support for career progression, recognition for accomplishments and help promoting work-life balance.
The survey was developed by Accountemps and conducted by an independent research firm. It includes responses from more than 1,000 US workers.
Oil and Gas Machinery Manufacturing tops Aerotek’s list of In-demand Manufacturing Jobs
Daily News, October 10, 2016
The demand for manufacturing talent is still on the rise despite the slow growth rate, according to Aerotek’s 2nd-annual “Opportunities in Manufacturing,” list. Oil and gas field machinery and equipment ranked as the fastest-growing US industry for manufacturing employment, with employment growth of 7% from 2015 to 2016.
Aerotek found the 10 fastest-growing US industries for manufacturing employment are:
- Oil and gas field machinery and equipment: 7%
- Metal tank (heavy gauge): 5%
- Perishable prepared food: 4%
- Fabricated pipe and pipe fitting: 3%
- Commercial screen printing: 3%
- Wood container and pallet: 3%
- Truck trailer: 3%
- Motor vehicle seating and interior trim: 2%
- Printed circuit assembly (electronic assembly): 2%
- Farm machinery and equipment: 2%
The top states for manufacturing employment are California, Texas, Indiana, Michigan & Iowa.
Open positions in skill sets with the highest demand include:
- General production worker: 43,100
- Light industrial assembler: 19,648
- Machine operator: 6,050
- Maintenance tech/mechanics: 5,465
- Welder: 3,818
Sara Staggs, director of divisional operations for Aerotek’s commercial division, notes the industry softening is in response to market forces including the global economic downturn outside the US, a strong dollar and increasing competition from companies abroad.
“Despite the slower growth, finding talent is still one of the greatest challenges for manufacturing today,” Staggs said. “Machinists, production workers and assemblers are among the top occupations in demand, while workers with skilled trade backgrounds such as welding and machining are also in high demand.”
The new ADP/Moody’s National Employment Report: Over 56% of all new job growth in October, 2016 came from Small and Mid-size Companies!
November 2, 2016
Private sector employment increased by 147,000 jobs in October from September, (a 55,000 job decrease from September’s 202,000—revised up from 154,000) according to the September ADP National Employment Report®, which is produced by ADP® 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: 34,000
1-19 employees 14,000
20-49 employees 20,000
Medium businesses: 48,000
50-499 employees 48,000
Large businesses: 64,000
500-999 employees 2,000
1,000+ employees 63,000
- Goods-producing <-18,000>
- Natural resources/mining <-2,000>
- Construction <-15,000>
- Manufacturing <-1,000>
- Service-providing 165,000
- Trade/transportation/utilities 17,000
- Information 3,000
- Financial activities 18,000
- Professional/business services 69,000
- Professional/technical services 28,000
- Management of companies/enterprises 6,000
- Administrative/support services 36,000
- Education/health services 22,000
- Health care/social assistance 34,000
- Education <-12,000>
- Leisure/hospitality 38,000
- Other services <-2,000>
Franchise Jobs 24,500
“Job growth appears to be shifting from small to large companies due to the lessening impact the global economic environment had on large companies earlier in the year,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “This is also true because large companies often have the resources to attract workers with better pay and benefit packages.”
Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth remains strong although the pace of growth appears to be slowing . Behind the slowdown is businesses’ difficulty filling open positions. However, there is some weakness in construction, education and mining.”
(The November 2016 ADP National Employment Report will be released at 8:15 a.m. ET on November 30, 2016).
Due to the important contribution that small businesses make to economic growth, employment data that is 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.
October 2016 Small Business Report Highlights
Total Small Business Employment: 34,000
|●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 Labor Turnover Summary – August 2016
On October 12th, the U.S. Bureau of Labor Statistics (BLS) reported that the number of job openings decreased to 5,400,000 (down from last month’s 5,900,000) on the last business day of August, the U.S. Bureau of Labor Statistics reported today. Hires and separations were little changed at 5,200,000 and 5,000,000, respectively. Within separations, the quits rate was 2.1% and the layoffs and discharges rate was 1.1%. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by 4 geographic regions.
On the last business day of August, there were 5,400,000 job openings, a decrease of 388,000 from July. The job openings rate was 3.6% in August. The number of job openings decreased over the month for total private (-348,000) and for government
(-39,000). Job openings decreased in a number of industries, with the largest changes occurring in professional and business services (-223,000), durable goods manufacturing (-29,000), and arts, entertainment, and recreation (-28,000). In the regions, job openings decreased in the South and the Midwest.
The number of hires was 5,200,000 in August, little changed from July. The hires rate was 3.6% in August. The number of hires was little changed for total private and for government. Hires was also little changed in all industries and regions.
Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.
There were 5,000,000 total separations in August, little changed from July. The total separations rate in August was 3.4%. The number of total separations was essentially unchanged for total private and for government. Total separations increased in state and local government education (+23,000). The number of total separations was little changed in all 4 regions.
The number of quits was essentially unchanged in August at 3,000,000. The quits rate was 2.1%. Over the month, the number of quits was little changed for total private and for government. Quits decreased in state and local government, excluding education
(-13,000). The number of quits was little changed in all 4 regions.
There were 1,600,000 layoffs and discharges in August, little changed from July. The layoffs and discharges rate was 1.1%. The number of layoffs and discharges was essentially unchanged over the month for total private and edged up for government (+22,000). The layoffs and discharges level increased in healthcare and social assistance (+39,000) and in state and local government education (+14,000). The number of layoffs and discharges was little changed in all 4 regions.
In August, the number of other separations was little changed for total nonfarm and total private and was unchanged for government. Other separations was little changed in all industries. The number of other separations decreased over the month in the West region.
Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in August, hires totaled 62,700,000 and separations totaled 60,100,000, yielding a net employment gain of 2,600,000. These totals include workers who may have been hired and separated more than once during the year.
The Job Openings and Labor Turnover Survey results for September 2016 are scheduled to be released on Tuesday, November 8, 2016 at 10:00 am (EST).
As we recruiters know, that 5,400,000 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 5,400,000 published job openings now become a total of 27.000,000 published AND hidden job orders.
In October there were 7,787,000 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 7,787,000 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 Decreased 93,800 in September
October 5, 2016
*Special Note: Due to data availability issues, the new release date is Wednesday, November 9, at 10:00 AM ET (postponed from Wednesday, November 2).
*The September loss followed little change in August
*The majority of the loss was concentrated in the West and Midwest regions
*The Professional category showed larger losses with Services/Production showing a mixture of gains and losses
Online advertised vacancies decreased 93,800 to 4,722,300 in September, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The August Supply/Demand rate stands at 1.63 unemployed for each advertised vacancy with a total of 3,000,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7,800,000 in August.
“The 3rd quarter showed a small gain of 64,800 following large losses in the 2nd quarter,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “There has been no sign of a ‘bounce back’ from the sudden steep losses in May and June.”
The Professional category saw large losses in Computer/Math (−17.8) and Healthcare (−23.7) with the other areas primarily also showing losses. The Services/Production category saw large losses in Sales (−22.1) and Transportation (−12.0) with a mixture of smaller gains and losses in other areas.
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 2016 Conference Board Help Wanted OnLine® (HWOL) Data Series will be released at 10:00 AM ET on Wednesday, November 2, 2016).
In October, 2016 the regular unemployment number dropped to 4.9%, and the broader U-6 measure fell to 9.5%, .3% less than twice as high as the regular unemployment figure.
The above 9.5% 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 October U-6 numbers for the past 13 years:
October 2015 9.8%
October 2014 11.5%
October 2013 13.7%
October 2012 14.5%
October 2011 16.0%
October 2010 17.0%
October 2009 17.4%
October 2008 12.0%
October 2007 8.4%
October 2006 8.1%
October 2005 8.6%
October 2004 9.7%
October 2003 10.2%
The October 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 November 4th, 2016, the BLS published the most recent unemployment rate for October 2016 of 4.9% (actually it is 4.876, down by .089% from 4.965% in September, 2016.
The unemployment rate was determined by dividing the unemployed of 7,787,000 (—down from the month before by 152,000—since October, 2015 this number has decreased by 112,000) by the total civilian labor force of 159,712,000 (down by 195,000 from September, 2016). Since October 2015, our total civilian labor force has increased by 2,616,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 254,321,000. This is an increase of 230,000 from last month’s increase of 237,000. In one year’s time, this population has increased by 2,780,000. The Civilian Noninstitutional Population has increased each month by…)
|Up from September 2016||by||230,000|
|Up from August 2016||by||237,000|
|Up from July 2016||by||234,000|
|Up from June 2016||by||223,000|
|Up from May 2016||by||223,000|
|Up from April 2016||by||205,000|
|Up from March 2016||by||201,000|
|Up from February 2016||by||191,000|
|Up from January 2016||by||180,000|
|Up from December 2015||by||461,000|
|Up from November 2015||by||189,000|
|Up from October 2015||by||206,000|
|Up from September 2015||by||216,000|
|Up from August 2015||by||229,000|
|Up from July 2015||by||220,000|
|Up from June 2015||by||213,000|
|Up from May 2015||by||208,000|
|Up from April 2015||by||189,000|
|Up from March 2015||by||186,000|
|Up from February 2015||by||191,000|
|Up from January 2015||by||176,000|
|Up from December 2014||by||696,000|
|Up from November 2014||by||143,000|
|Up from October 2014||by||187,000|
|Up from September 2014||by||211,000|
|Up from August 2014||by||217,000|
|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 159,712,000 (down from September by 195,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 94,609,000 ‘Not in Labor Force’—up by 425,000 from last month’s 94,184,000. The government tells us that most of 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 survive 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—dropped .1% to 62.8%. This is .4% above the historically low rate of 62.4% recorded in September 2015—and, before that, the rate recorded in October 1977—9 months into Jimmy Carter’s presidency—38 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 October was 2.5% (this rate was .2% below last month’s 2.7%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in October was 2.6% (this rate was .1% higher last month’s 2.5%).
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! A Big Goose Egg!
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 October 28th, the US Bureau of Economic Analysis (BEA) announced the real gross domestic product (GDP) — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 2.9% in the third quarter of 2016 according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.4%.
The BEA emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the third quarter, based on more complete data, will be released on November 29, 2016. The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, federal government spending, and nonresidential fixed investment that were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP growth in the third quarter reflected an upturn in private inventory investment, an acceleration in exports, a smaller decrease in state and local government spending, and an upturn in federal government spending. These were partly offset by a smaller increase in PCE, and a larger increase in imports.
*The economy needs to expand at about +3% to keep the unemployment rate from rising.
(The “second” estimate for the 3rd Quarter 2016 GDP will be released on November 29th, 2016).
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. Currently, in 2015, workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although eight states provide fewer weeks and two provide more. No additional weeks of federal benefits are available in any state: the temporary Emergency Unemployment Compensation (EUC) program expired at the end of 2013, and no state currently qualifies to offer more weeks under the permanent Extended Benefits (EB) program. 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 October “management, professional and related” types of worker category, you will find the following rates:
October 2015 2.2%
October 2014 2.7%
October 2013 3.4%
October 2012 3.8%
October 2011 4.4%
October 2010 4.5%
October 2009 4.7%
October 2008 3.0%
October 2007 2.0%
October 2006 1.9%
October 2005 2.2%
October 2004 2.4%
October 2003 2.9%
October 2002 2.8%
Here are the rates, during those same time periods, for “college-degreed” workers:
October 2015 2.5%
October 2014 3.0%
October 2013 3.8%
October 2012 3.7%
October 2011 4.4%
October 2010 4.7%
October 2009 4.7%
October 2008 3.1%
October 2007 2.1%
October 2006 1.9%
October 2005 2.3%
October 2004 2.5%
October 2003 3.1%
October 2002 3.0%
The October 2016 rates for these two categories, 2.5% and 2.6%, respectively, are trending lower this month, but are still close to the halcyon numbers we attained in the 2004, 2005, 2006 and 2007 time frames. 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 than 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