Outlook brightens for job market
Planned layoffs in May decrease 53 percent to a 30-month low, a survey finds.
AirPrism, a California startup, plans to hire software engineers in the next few months. Starting salary: $80,000 to $110,000 a year, plus stock options.
In Bethlehem, Pa., Graphic Management Associates is looking for 40 to 50 new assembly-line workers, engineers, and sales people to help turn out equipment that is used to produce newspaper-advertising inserts.
In Philadelphia, computer firm Mindbridge, with 100 employees, expects to add new workers at the rate of 25 percent per quarter through the end of the year.
These are not typographical errors. Instead, they're examples of companies that have positions to fill - and they may foretell of hiring booms in surprising areas.
For months, the job market has frustrated everyone from President Bush to millions of Americans out of work. Now evidence is building that some businesses are finally starting to hire - and the era of downsizing may be ending. Indeed, a new report indicates planned job cuts in May plunged 53 percent to a 30-month low.
If these findings reported Tuesday by Challenger, Gray & Christmas Inc., a Chicago outplacement firm, come to pass, it could set the stage for a more robust recovery next year.
"At some point, business can't keep its expansion plans on hold," says Reesa Staten, director of research at Robert Half International, a Menlo Park, Calif., recruiting and temporary agency. "As they anticipate a recovery, they don't want to be caught by surprise with increased workloads and demands."
The anticipation of a recovery was heightened even more Tuesday when Fed Chairman Alan Greenspan told a conference of central bankers that he sees indications of a "fairly marked turnaround" in the US economy. Yet he also cautioned, "We are stabilizing and there is some indication of return, but it's not at this stage by any means clear."
If a turnaround is happening, it's probably still too early to make an impact on the unemployment numbers due out on Friday. Economists expect this rate will pop up to 6.1 percent from 6 percent in April. Economists also point out, though, that jobs usually lag in an economic recovery.
"Business usually wants to see several months or quarters of better sales before they commit to add a person, so jobs usually lag about six to 12 months behind economic activity," says Dan Meckstroth of the Manufacturers Alliance/MAPI in Arlington, Va.
Before companies start hiring, they have to slow the firing - and that appears to be the case according to the Challenger report. In May, the number of announced layoffs fell to 68,623, down from 146,399 in April. This brought the total cuts for the first five months of the year to 570,817, which is 11 percent lower than the first five months of 2002.
By the end of the year, there could be some real growth in the jobs market, says Mark Zandi of Economy.com. Initially, he expects hiring will take place in wholesale distribution, trucking, and warehousing. As more products get made, the packaging industry will improve as well. Both business and consumers, feeling better about the economy, will start to travel again, helping the airline and hotel businesses.
The jobs market will also get something of a kick start from the tax-cut legislation that Mr. Bush signed last week. Mr. Zandi estimates the tax bill will add about 130,000 jobs by the end of the year, 350,000 jobs next year, and 400,000 jobs by 2005.
One of the first areas that normally sees some improvement in jobs is the temp market. Ms. Staten says her company, in a survey, found that businesses intend to increase their hiring in the third quarter. The most optimistic areas: finance, insurance, real estate, and manufacturing.
Some of those hiring stories can be found at AirPrism, Graphic Management, and Mindbridge. AirPrism is starting to ride one of the next technology waves: offices going wireless.
AirPrism provides some of the software needed for management of that technology. And it expects to add eight to 10 new software designers and developers by the end of the year to its staff of 25. "We are looking for people who can design and develop software," says Steve Sommer, president of the Redwood Shores, Calif., firm.
Mindbridge, which produces scheduling software for companies to coordinate projects and meetings, is finding the job downturn a good time to hire. In fact, their business for companies in the mortgage and financial services area is "exploding," says Scott Testa, chief operating officer. He figures the company is paying 20 percent less for talent than only a few years ago.
"The quality of the candidates and the price they are willing to work at is very good," he says.
The drive for improved productivity is what is helping Graphic Management Associates, whose work in advertising inserts is a fast growing business. The company is opening up a third production line.
"We are planning to hire across the board - engineers, software developers, assembly-line workers, managers," says Rich Remetta, the controller.