Bob Marshall’s September 2016 BLS Analysis for Recruiters; 10/7/16
September BLS Preface
TBMG Coaching Updates and News
Bob Marshall – Training/Coaching Updates:
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. The 60 minute presentation is entitled, “Make Placements by Overcoming Objections with Contract Staffing”.
The Nebraska Association of Personnel Consultants (NAPC) Fall Seminar, Omaha, Nebraska, September 23rd, 2016
I presented to the NAPC Fall Seminar on Friday, September 23rd, 2016, in Omaha, Nebraska. My presentations ran from 9:00 am to 3:00 pm. The titles of the presentations were: “Your Desk as a Manufacturing Plant”; “3 Proven Methods to landing New Clients”; “How to Inject Urgency into the Candidate”; and “How to Inject Urgency into the Hiring Process”.
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.
GDP revised upward
Daily News, September 29, 2016
US real gross domestic product grew at an annual rate of 1.4% in the 2nd quarter, according to the 3rd estimate of GDP growth released by the US Commerce Department. The new estimate is up from the 2nd estimate, which pegged growth at 1.1%.
In the 1st quarter, real GDP edged up 0.8%.
Business investment was still soft in the April-to-June period, but the weakness was less pronounced, MarketWatch reported, noting this could be a good harbinger for the just-about-to-end 3rd quarter, whose rate of growth appears to have been much stronger. Economists polled by MarketWatch estimate growth will climb to a 3% pace in the 3rd quarter. The Atlanta Fed’s GDPNow forecast — which is based on a model tied to economic indicators — calls for 2.8% growth.
Jason Furman, chairman of the Council of Economic Advisers, also commented on the GDP number in a blog post. “Second-quarter economic growth was revised to 1.4% at an annual rate in the 3rd estimate, up 0.3 percentage point from the 2nd estimate,” Furman wrote. “Consumer spending grew strongly at 4.3% in the 2nd quarter — its second-fastest quarterly growth since 2006 — and, in contrast to recent quarters, net exports and business fixed investment also added to GDP growth. Some of this growth was offset by a large decline in inventory investment (one of the most volatile components of GDP), along with declines in residential investment and government spending. Overall, growth in the most stable and persistent components of output — consumption and fixed investment — was revised up to 3.2%.”
Recruiting to be just as challenging in 2017
Daily News, September 27, 2016
Recruiting will be just as challenging in 2017 as this year, or maybe even more so, according to 95% of respondents in a survey of more than 1,600 recruiting and HR professionals by Jobvite, a provider of recruitment software, including an applicant tracking system.
To get hires in place, recruiters are using incentives. The survey found 68% of HR professionals are raising salary offers, 64% are offering financial rewards for referrals, 44% allow for flexible work hours and 44% are OK with a casual dress code.
“Job creation has been steadily increasing ever since the recession, forcing recruiters to double up their efforts to fill positions with quality candidates,” Jobvite CEO Dan Finnigan said. “But there simply aren’t enough educated, talented and qualified candidates to keep up with the demand. As a result, recruiters must now go above and beyond by creating a compelling employer brand and an exceptional candidate experience to keep their companies growing.”
Other findings in the report:
*33% of recruiters anticipate filling 100 or more positions in 2017, up from 26% last year.
*Only 86% believe their companies will have layoffs.
*Robots? Only 10% believe their firms will replace jobs with tech in the next two to three years.
*43% say diversity is either somewhat or very important when making a hiring decision.
*23% of male recruiters and 44% of female recruiters believe that female candidates earn less than men.
*Only 45% of recruiters say their company’s career site supports mobile.
Workers stay at firms for median 4.2 years
Daily News, September 22, 2016
The median number of years that wage and salary workers had been with their current employers was 4.2 as of January, the US. Bureau of Labor Statistics reported today. The employee tenure measure is released every 2 years and was last recorded at 4.6 years in 2014.
Median employee tenure was generally higher among older workers than younger ones, according to the report. Workers ages 55 to 64 had a median tenure of 10.1 years while workers ages 25 to 34 had a median tenure of 2.8 years.
Wage and salary workers in the public sector had more than double the median tenure of private-sector employees in January, 7.7 years and 3.7 years, respectively. One factor behind this difference is age. About three in four of government workers were age 35 and over, compared with about 3 in 5 private wage and salary workers.
Within the private sector, workers in manufacturing had the highest tenure among major industries at 5.3 years; workers in leisure and hospitality had the lowest median tenure at 2.2 years. The varying age distributions across industries also factored into play, with workers in manufacturing tending to be older than those in leisure and hospitality.
Half of US Doctors changing their Practice Patterns
Daily News, September 22, 2016
Half of US doctors plan to retire, cut back, or seek non-clinical roles, according to a survey released by The Physicians Foundation and Merritt Hawkins, the physician search division of AMN Healthcare Services Inc.
According to the research, titled “2016 Survey of America’s Physicians: Practice Patterns and Perspectives,” 48% of physicians plan to cut back on hours, retire, take a non-clinical job, switch to “concierge” medicine, or take other steps limiting patient access to their practices. These practice pattern changes will reduce the physician workforce by tens of thousands of full-time-equivalents at the same time that a growing, aging and more widely insured population is increasing demand for doctors, according to the survey report.
“Many physicians are dissatisfied with the current state of the medical practice environment and they are opting out of traditional patient care roles,” said Walker Ray, M.D., president of The Physicians Foundation. “The implications of evolving physician practice patterns for both patient access and the implementation of healthcare reform are profound.”
US physicians are changing their practice patterns in ways that will inhibit patient access to care, and they are largely disengaged from the mechanisms of healthcare reform such as value-based payments, accountable care organizations, and electronic health records. The majority of physicians surveyed, 54%, describe their morale as somewhat or very negative, 63% are pessimistic about the future of the medical profession, 49% always or often experience feelings of burn-out, and 49% would not recommend medicine as a career to their children, according to the survey.
In response to regulatory burdens and other concerns, physicians are seeking alternatives to traditional, full-time private practice. The survey indicates that only 33% of physicians now identify as private practice owners, down from 49% in 2012, while 58% identify as employees, up from 44% in 2012.
The survey also asked physicians what they plan to do in the next 3 years. Responses compared to 2012 responses include:
*Continue as I am: 52.2%, up from 49.8% in 2012
*Cut back on hours: 21.4%, down from 22.0%
*Retire: 14.4%, up from 13.4%
*Switch to a cash/concierge practice: 8.8%, up from 6.8%
*Work locum tenens: 11.5% (2012 results not available)
*Cut back on patients seen: 7.5%, down from 9.6%
*Seek a non-clinical job within healthcare: 13.5%, up from 9.9%
*Seek employment with a hospital: 6.3%, up from 5.6%
*Work part time: 9.8%, up from 6.5%
“It’s not how many physicians there are that determines patient access to care, it’s how physicians choose to practice,” said Mark Smith, president of Merritt Hawkins. “By retiring, taking non-clinical roles, or cutting back in various ways, physicians are essentially voting with their feet and leaving the clinical workforce, to the detriment of patient access.”
Merritt Hawkins conducted the online survey for The Physicians Foundation from early April through mid-June 2016. It included responses from 17,236 physicians.
Bachelor’s Degree with Highest Pay is Mechatronics
Daily News, September 16, 2016
Technical degrees dominated the highest-paid majors lists for class of 2015 bachelor’s and master’s degree graduates, according to a report from the National Association of Colleges and Employers. Mechatronics engineering ranked as the highest-paid college major for this year’s bachelor’s degree grads.
Overall, the top salaries were loftier for class of 2015 bachelor’s degree graduates than they were for the previous college class. 7 class of 2015 majors had an average starting salary that topped $70,000, while the class of 2014 had just 1.
The top salaries for Class of 2015 bachelor’s degree majors:
- Mechatronics engineering: $80,859
- Computer science: $75,191
- Petroleum engineering: $74,996
- Operations research: $73,339
- Environmental control technology: $71,443
- Applied mathematics: $70,868
- Homeland security: $70,278
- Computer engineering: $68,820
- Aerospace engineering: $67,658
- Electrical engineering: $67,593
Among Class of 2015 master’s degree graduates, medical informatics and illustration majors were the top earners. The top salaries for Class of 2015 master’s degree majors:
- Medical informatics and illustration: $125,769
- Bioethics: $117,199
- Applied mathematics: $113,001
- Computational science: $112,905
- Biomathematics: $109,060
- Computer systems networking and telecommunications: $106,088
- Systems engineering: $102,840
- Telecommunications management: $97,700
- Health administration: $93,333
- Materials engineering: $91,863
A total of 279 colleges and universities nationwide, representing nearly half a million graduates, provided data for class of 2015 associate, bachelor’s, master’s, and doctoral degree graduates. Overall, data were reported for nearly 244,000 bachelor’s degree graduates in 34 broad disciplines and 185 majors.
Economists lower GDP projections, but still expect economy to grow 2 more years
Daily News, September 12, 2016
Economists surveyed by the National Association for Business Economics lowered their growth projections for the US economy in 2016, the association announced today. However, they expect the economy to grow 2 more years.
“Four-fifths of panelists participating in NABE’s September Outlook Survey expect the next US business cycle peak to occur in 2018 or later,” according to NABE President-elect Stuart Mackintosh, executive director, Group of Thirty. “NABE forecasters expect the Fed to raise its interest-rate target by another quarter of 1% later in 2016 and one-half of 1% in 2017.”
NABE is a professional association for business economists and others who use economics in the workplace. The survey included 46 forecasters and was conducted between Aug. 8 and Aug. 25.
The forecaster’s median forecast in the new survey is for inflation-adjusted US real gross domestic product to grow at an annualized rate of 1.5% in 2016, down from 1.8% forecasted in a June survey. The median forecast for 2017, remained at 2.3% real GDP growth.
Real GDP grew 2.4% in 2015.
The September NABE Outlook Survey marks the 4th consecutive markdown of 2016 real GDP growth by respondents, according to Gregory Daco, head of US economics, Oxford Economics. “Lower expectations for business investment are the main contributor to the reduced GDP outlook,” he said.
Panelists forecast nonfarm payroll growth to average 185,000 jobs per month in 2016 — down from 201,000 forecast in the June survey — and then slow to 168,000 per month in 2017 as the labor market approaches full employment. The projected job creation figure for 2017 reflects a decrease from the 192,000 jobs per month anticipated in the June survey.
The unemployment rate is now expected to average 4.8% in 2016 and then decline to 4.6% by the fourth quarter of 2017—unchanged from projections in the June survey.
1/3rd would offer a 10-15% salary increase to attract tech talent, survey finds
Daily News, September 6, 2016
In today’s candidate-focused market, 1/3rd of tech employers, 32%, would offer a 10-15% salary increase in order to attract top talent, according to a new report, “Tech Trends: IT Leaders and the Employment Market,” released today by Modis, an information technology staffing division of Adecco SA.
The survey of 500 IT professionals responsible for key decisions including hiring within their organizations found that 35% would also rehire talent who had previously left the company 3 months before, and 33% would re-hire no matter how long ago the talent left.
“With the tech sector unemployment rate at 2.6%, the pool of available and skilled talent is smaller than ever,” said Modis President Jack Cullen. “Nearly 2/3rds of tech employers are open to offering currently employed candidates a 6-15% increase to their current salary to attract the cream of the crop. Today’s employers need to be open to negotiation and today’s candidates need to be prepared to negotiate.”
Key insights from the report include:
*26.4% of respondents said salary is the most important benefit for attracting talent, while 42.8% said a flat corporate structure is the least important benefit.
*63% of respondents agreed that tech workers are more concerned about salary and total compensation than the stability and longevity of the company.
*Regarding salary, most respondents felt tech workers expected a market average (49%) or above average (42%) salary.
*Team work and interpersonal skills was ranked as the most difficult soft skill to find in tech candidates (31%), while security and infrastructure ranked as the hardest to find hard skill (22%).
*When hiring candidates who are employed, most respondents offer an average salary increase between 6-9% (33%) and 10-15% (32%).
*41% of respondents said age is the biggest challenge to diversity in tech industry; 28% said gender, and 21% said ethnicity.
*A majority of respondents are open to rehiring top performers who have left, with only 12% saying they would not rehire.
*Respondents were more concerned with the quality of a schooling institution than its online/offline nature (27%) and viewed online and offline degrees equally (20%).
*Chicago is the top-ranked future tech hotspot (51%); Omaha is the lowest (10%).
*46% of respondents said artificial intelligence has the potential to make the biggest impact, and only 12% said AR/augmented reality does.
*40% of respondents said external threats were the biggest threats to their company.
Allison+Partners Research + Insights team surveyed 500 individuals who identified as IT decision makers, responsible for key decision including hiring within their organizations. The survey was conducted between Aug. 1-9, 2016.
How to recruit hard-to-find Tech Talent
Tess Taylor, September 1, 2016
Technical talent recruitment has been a struggle for as long as anyone can remember. With multiple ongoing shortages of tech-related skills in the job market, recruiters in this industry are brave souls who have their work cut out for them.
Want tech talent? Better grab them fast
Based on her research, Jacquillia Hooper, Strategic Account Director for Yoh, a workforce solutions provider to the top technical companies in the United States, estimates that the best technical candidates are generally off the market in 10 days or less. This creates a great deal of competition among firms vying for top technical talent. Hooper says that the 2 factors that are contributing to this shortage include, “the explosion of the technology market in areas like mobile development and e-commerce, combined with the need for specialized skills in tech pros.”
Recent workforce data suggests that the shortages in tech talent have been ongoing because candidates are flocking to the 4 major cities for technical jobs — San Francisco, San Jose, Seattle and Austin. This leaves other regions facing shortages, while primary tech hubs have an abundance of candidates coming in all the time.
Hardest tech jobs to fill
Hooper tapped into real-time candidate data supplied by CareerBuilder to uncover what were the Top 3 most difficult tech jobs to fill. She says that the best recruitment strategy doesn’t involve posting on job boards and hanging out on social networks, but rather creating a strong network and using data to forecast recruitment needs.
DevOps Candidates are the #1 most difficult to recruit for. CareerBuilder data shows that there were 30,355 job postings for DevOps jobs in 2016, but only 2,375 candidates in their database matching the required skills. These candidates typically represent the best of both development and operations worlds. They work to facilitate collaboration between software engineers and other IT pros in organizations, including infrastructure updates and product delivery.
Big Data Developers are also difficult to find, accounting for only 4,521 active candidates in a sea of more than 22,400 advertised jobs. These are skilled tech professionals who understand the complexities of managing large data sets and have the chops to develop software that can break down data into meaningful reports that traditional processing alone cannot do. They are a unique mix of analytical mindsets and coding, so they are rare to find.
The #3 most challenging tech professional to find, according to Hooper’s research, are Java Developers. While the ratio of jobs to candidates is more promising, there were only 27,869 active candidates showing up on CareerBuilder to fill around 103,330 with the world’s biggest companies. These programmers must know Java language inside and out and have up-to-date skills because of constant market changes.
Best practices for recruiting in the tech market
While companies are doing all they can to connect with technical talent — and some have made it a practice to outsource to other countries where talent is more readily available — recruitment methods must adapt in a growing competitive market. It’s no longer good enough to simply advertise jobs and hope that some good candidates will come along. Recruiting in the technical field is a lot more involved than that.
For one, technical talent is generally either already working or in the process of training in work-ready programs. Many regions have turned to independent technical training firms to prepare job changers and grads to take on technical careers. For example, the New York Post featured multiple technical training centers to bring more technical talent to the rapidly growing startup base there. Companies like Microsoft and Google have even started their own training portals to prepare the next generation of technical professionals with industry certifications.
As Hooper advises, recruiting in the tech market is about developing stronger relationships with the best talent out there, and then seeking referrals from this network. Placing great candidates with equally great companies is the stuff of dreams for tech recruiters. By understanding what drives technical talent to seek out new opportunities, and then connecting them with the job offers that include these factors, a tech recruiter can achieve greater success.
The new ADP/Moody’s National Employment Report: Over 58% of all new job growth in September, 2016 came from Small and Mid-size Companies!
October 5, 2016
Private sector employment increased by 154,000 jobs from August to September (a 23,000 job decrease from July’s 177,000 additions), 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 17,000
20-49 employees 17,000
Medium businesses: 56,000
50-499 employees 56,000
Large businesses: 64,000
500-999 employees 8,000
1,000+ employees 56,000
Goods producing 3,000
Service providing 151,000
Financial activities 11,000
Professional/business services 45,000
Franchise Jobs 26,000
Payrolls for businesses with 49 or fewer employees increased by 34,000 jobs in September, down from 68,000 in August. Employment at companies with 50-499 employees increased by 56,000 jobs, up from last month’s 40,000. Employment at large companies – those with 500 or more employees – increased by 64,000, down from 67,000 in the prior month. Companies with 500-999 employees added 8,000 and companies with more than 1,000 employees added 56,000 in September.
Goods-producing employment was up by 3,000 jobs in September, following August losses of 9,000. The construction industry added 11,000 jobs, following August losses of 2,000 jobs. Meanwhile, manufacturing jobs were down 6,000 in September, after losing 4,000 in the previous month.
Service-providing employment rose by 151,000 jobs in September. The report indicates that professional/business services contributed 45,000 jobs, down from 53,000 in August. Trade/transportation/utilities increased by 15,000 jobs in September, down from 26,000 jobs added the previous month. Financial activities added 11,000 jobs, down from last month’s gain of 15,000 jobs.
“Job gains in September eased a bit when compared to the past 12-month average,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “We also observed softening this month in trade/transportation/utilities, possibly due to the continued tightening U.S. labor market and lackluster consumer spending.”
Mark Zandi, chief economist of Moody’s Analytics, said, “The current record of consecutive monthly job gains continued in September. With job openings at all-time highs and layoffs near all-time lows, the job market remains in full-swing. Job growth has moderated in recent months, but only because the economy is finally returning to full-employment.”
(The October 2016 ADP National Employment Report will be released at 8:15 a.m. ET on November 2, 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.
September 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 – July 2016
On September 7th, the U.S. Bureau of Labor Statistics (BLS) reported that the number of job openings increased to 5,900,000 (up from last month’s 5,600,000) on the last business day of July, the U.S. Bureau of Labor Statistics reported today. Hires and separations were little changed at 5,200,000 and 4,900,000, 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 July, there were 5,900,000 job openings, an increase of 228,000 from June. The job openings rate was 3.9% in July. The number of job openings increased over the month for total private (+243,000) and was little changed for government. Job openings increased in professional and business services (+166,000) and durable goods manufacturing (+27,000) but decreased in health care and social assistance (-63,000). The number of job openings was little changed in all 4 regions.
The number of hires was 5,200,000 in July, little changed from June. The hires rate was 3.6% in July. The number of hires was little changed for total private and for government. Hires increased in professional and business services (+137,000) but decreased in other services (-77,000). The number of hires increased in the South region.
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 4,900,000 total separations in July, little changed from June. The total separations rate in July was 3.4%. The number of total separations was essentially unchanged for total private and edged down for government (-25,000) over the month. Total separations decreased in state and local government education (-29,000). The number of total separations was little changed in all 4 regions.
The number of quits was essentially unchanged in July at 3,000,000. The quits rate was 2.1%. Over the month, the number of quits was little changed for total private and decreased for government (-21,000). Quits decreased in state and local government education (-25,000). The number of quits was little changed in all 4 regions.
There were 1,600,000 layoffs and discharges in July, little changed from June. The layoffs and discharges rate was 1.1%. The number of layoffs and discharges was essentially unchanged over the month for total private and for government. The layoffs and discharges level was also essentially unchanged in all industries and in all 4 regions.
The number of other separations was little changed for total nonfarm, total private, and government in July. Other separations decreased in other services (-12,000), educational services (-6,000), and state and local government education (-5,000). The number of other separations was little changed over the month in all four regions.
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 July, hires totaled 62,500,000 and separations totaled 60,000,000, yielding a net employment gain of 2,500,000. 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 August 2016 are scheduled to be released on Wednesday, October 12, 2016.
As we recruiters know, that 5,900,000 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 5,900,000 published job openings now become a total of 29,500,000 published AND hidden job orders.
In September there were 7,939,000 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 7,939,000 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
*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 September, 2016 the regular unemployment number rose to 5.0%, and the broader U-6 measure remained at 9.7%, .3% less than twice as high as the regular unemployment figure.
The above 9.7% 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 September U-6 numbers for the past 13 years:
September 2015 10.0%
September 2014 11.7%
September 2013 13.6%
September 2012 14.7%
September 2011 16.4%
September 2010 17.1%
September 2009 17.0%
September 2008 11.2%
September 2007 8.4%
September 2006 8.0%
September 2005 9.0%
September 2004 9.4%
September 2003 10.4%
The September 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 October 7th, 2016, the BLS published the most recent unemployment rate for September 2016 of 5.0% (actually it is 4.965%, up by .043% from 4.922% in August, 2016.
The unemployment rate was determined by dividing the unemployed of 7,939,000 (—up from the month before by 90,000—since September, 2015 this number has increased by 14,000) by the total civilian labor force of 159,907,000 (up by 444,000 from August, 2016). Since September 2015, our total civilian labor force has increased by 3,040,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 254,091,000. This is an increase of 237,000 from last month’s increase of 234,000. In one year’s time, this population has increased by 2,766,000. The Civilian Noninstitutional Population has increased each month by…)
|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 increased the Civilian Labor Force to 159,907,000 (up from August by 444,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 94,184,000 ‘Not in Labor Force’—down by 207,000 from last month’s 94,391,000. 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—rose .1% to 62.9%. This is .5% above the historically low rate of 62.4% recorded in September and October—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 September was 2.7% (this rate was .4% below last month’s 3.1%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in September was 2.5% (this rate was .2% lower last month’s 2.7%).
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 September 29th, 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 upwardly revised annual rate of 1.4% in the second quarter of 2016 according to the “third” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8%.
The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 1.1%. With the “third” estimate for the second quarter, the general picture of economic growth remains the same. The most notable change from the second to third estimate is that nonresidential fixed investment increased in the second quarter; in the previous estimate, nonresidential fixed investment decreased The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment. These were partly offset by negative contributions from private inventory investment, 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 in the second quarter primarily reflected an acceleration in PCE and upturns in nonresidential fixed investment and in exports. These were partly offset by a larger decrease in private inventory investment, downturns in state and local government spending and in residential fixed investment, and an upturn in imports.
*The economy needs to expand at about +3% to keep the unemployment rate from rising.
(The “advance” estimate for the 3rd Quarter 2016 GDP will be released on October 28th, 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 September “management, professional and related” types of worker category, you will find the following rates:
September 2015 2.4%
September 2014 2.8%
September 2013 3.5%
September 2012 3.9%
September 2011 4.4%
September 2010 4.4%
September 2009 5.2%
September 2008 2.8%
September 2007 2.1%
September 2006 2.1%
September 2005 2.3%
September 2004 2.5%
September 2003 3.2%
September 2002 3.3%
Here are the rates, during those same time periods, for “college-degreed” workers:
September 2015 2.5%
September 2014 2.9%
September 2013 3.7%
September 2012 4.0%
September 2011 4.2%
September 2010 4.5%
September 2009 4.8%
September 2008 2.6%
September 2007 2.0%
September 2006 2.0%
September 2005 2.3%
September 2004 2.6%
September 2003 3.2%
September 2002 2.9%
The September 2016 rates for these two categories, 2.7% and 2.5%, respectively, are trending negatively this month, but are still close to the halcyon numbers we attained in the 2004, 2005, 2006, 2007 and part of 2008, 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