When it comes to the economy

Employers are no exception. They’ve weathered the economic storm, and many want to know if it’s ever going to turn around. You may be asking yourself if it’s time to spend some of the cash you’re holding on to, or if it’s time to hire again. Or you may just want to know if you can exhale yet!

We can’t tell you the answer to Questions 1 & 3, but here are some tips for question #2: How do you know if it’s time to hire?

1. You and your employees are stressed out. You might have cut positions, combined workloads, or just kept piling tasks on yourself and your staff. If your people are starting to show signs of discontent, are leaving things undone, or are threatening to walk out—you know you have a problem. It just might be solved with a new employee.

2. You are profitable. Profitability is a very good sign. But only when it happens for several months in a row. Much of this depends on your business, but if you’ve been turning a profit for 18 months, and your current staff is overworked, it might be time to hire. If you’re not steadily seeing profits, see #3.

3. The new hire will produce profit. If you’ve crunched the numbers and a new hire will pay for him or herself and then some, what are you waiting for?

4. You’re paying for temps or independent contractors. If there are services you need enough to pay higher temp and contractor fees, can you afford to turn that expense into an employee? Consider hiring a good-fit contractor or temp. If they have skills you need, then find a way to create a sustainable solution.

When you make the decision to hire, be sure to properly screen employment applicants. Pre-employment screening is an easy way to mitigate the risk of hiring staff with questionable backgrounds, criminal histories, or unacceptable credit problems.

With employment from January 2010 to February 2010 increasing by 3,000, April’s numbers seal three straight months of increases. And this Friday, the U.S. Bureau of Labor Statistics will release its jobs report for April; analysts predict total job growth (pubic and private sectors) will be between 180,000 and 189,000. (March’s increase was reported at 162,000, which will be adjusted on Friday’s report.)

April’s expected increase will include the temporary jobs added by the U.S. Census Bureau. Still, the manufacturing sector is expected to add about 29,000, and service sector about 50,000 in Friday’s report.

Another bit of good news is that the Consumer Confidence Index increased to 57.9, 18 points higher than April 2009, and 5 points higher than just a week prior. The Conference Boar Consumer Research Center, which issues the Index, reports the reading is higher than it’s been since September of 2008 because consumers’ concerns about business and job markets are easing. The Conference Board also reports that online job openings advertised in April jumped to 4.15 million, an increase of 222,700 over March.

So hiring freezes may be starting to thaw. What about the employees who managed to keep their jobs throughout the economic downturn? How are they faring?

There are indications that wage freezes are starting to hit the road, too. The Wall Street Journal reports that large employers like BASF, the chemical company, and Rockwell Collins, an aviation electronics firm, are distributing raises to their employees. Retaining key employees, rather than cutting staff, has become the priority.

BASF was scheduled to pay out raises in April, but decided to do it a month earlier—and employee morale was instantly improved. Even the buzz surrounding the early raise announcement helped loyalty and allowed employees to recommit to the company.

And employers might soon need that commitment from their people. A January survey by Towers Watson showed that 15% of respondents were having difficulty keeping their best talent. Employers are seeing more poaching and defections of key employees. One way to keep them from going is to increase salary—and that’s what is happening. AT&T gave 100,000 managers significant raises in November of 2009—four months ahead of the rest of their employees.

We will report on Friday’s job numbers as soon as they are announced, so check back!

ADP, a payroll processing company for US employers, issued a report that 22,000 private sector jobs were lost in January, 2010. Goods-producing sector jobs fell 60,000 while the service sector lost 38,000 jobs to arrive at the total. Within the two main categories, small business employment fell by 12,000, and manufacturing lost 25,000 jobs.

Unemployment has tracked high for the manufacturing and construction sectors for over two years now, with 1.9 million construction jobs lost since December 2007. The ripple effect of 15 million Americans out of work is continued lower consumer spending, which means employers don’t need more workers.

There are a few good-news items in the ADP figures: first, the service sector’s 38,000 jobs gain is the second straight monthly increase. Second, the overall drop of 22,000 month-to-month is the lowest decline since employment started falling in February 2008. Third, medium-sized businesses actually grew employment by 9,000.

Kelly Services, Inc., a temporary staffing firm, reported a loss in revenue and profit for the 4^th quarter 2009 over the same period in 2008; however, revenue was up from the third quarter 2009. This could be a positive indicator; temp staffing services often see increases in business prior to full time job boosts.

The construction industry is still being hit hard. According to the United States Labor Department, construction saw 75,000 jobs lost in January. A bright spot in the Federal report is manufacturing, with an 11,000 job loss—much smaller than the drops seen in 2009. Motor vehicles and plastics/rubber were two areas that increased jobs, by nearly 30,000 total.

While unemployment figures for January were better than expected, hiring will likely not occur on a large scale until consumer spending bounces back—and that’s not likely until employers start hiring again in a big way. Stay tuned for updates as they come.

Employment

Unemployment is expected to peak sometime next year, and remain around 10% through 2010 and into 2011. However, the huge losses suffered at the beginning of 2009, when 700,000 jobs were lost per month appear to be behind us.

In addition, temp jobs increased in November, and unemployment fell by 0.2% to 10%. Economists had expected an unchanged rate, so the drop is a good sign. The Labor Department also revised job losses for September and October, form 190,000 to 111,000 in October, and from 219,000 to 139,000 in September.

Other indicators are strengthening as well. The stock market is up and business investment in equipment and software increased in the third quarter.  According to economists, meaningful job growth is expected by the end of 2010, spurred both by federal government investment and private employer hiring. Additional indicators: consumer spending was up in November by .5%, while personal incomes were up .4%.

The average number of hours worked each week has fallen throughout the recession. But in November, the average workweek increased by .2 hour to 33.2 hours. The manufacturing workweek increased .3 hour to 40.4 hours. Still, there are 15.4 million unemployed persons in the U.S. and the number of folks working part-time due to cut hours or inability to find full-time work was little changed at 9.2%.

Americans are working hard; productivity is growing. Output rose by 4% while number of hours fell by 5%. This indicates that employers are doing more with less—and may not need to add workers just yet.

But in the long run, increasing productivity is expected to increase demand for workers, as well. What is your company’s employment plan for 2010?

Jobs fell farther than the 350,000 economists were predicting, and June marked the end of a declining trend that began after January’s peak job loss figure. Since then, the number of jobs lost each month had declined—until June’s number increased over May by 145,000. (May’s job decline had been reported at 345,000, but has been adjusted to 322,000.)

Since the recession began in December, 2007, the number of jobless Americans has increased by 7.2 million; the unemployment rate has increased by 4.6%. Blacks, Hispanics, and teenagers have higher rates of unemployment than the general population, at 14.7 percent, 12.2 percent, and 24 percent, respectively. These numbers show little change from May’s figures.

The number of long-term unemployed, who are classified as jobless for 27 weeks or more, increased by 433,000 in June, to 4.4 million.

Construction and manufacturing jobs continue to take the biggest hit in the sliding U.S. economy. Manufacturing dropped over 136,000 workers, and construction employment declined by 79,000 in June—a smaller decline than the rest of the year. Since the start of the recession, manufacturing employment has decreased by 1.9 million, and construction by 1.3 million.

The professional and business services sector lost 116,000 jobs, and federal government jobs were cut by 49,000 in June—mostly workers hired to prepare for the 2010 Census. Even temporary help services are on the decline: by 38,000 in June and 848,000 since the start of the recession. Automobile dealership closures affected June’s numbers: 9,000 jobs were lost in this category. And overall retail jobs declined by 21,000. Losses in retail jobs have leveled out over the past three months.

Financial services continue to shed jobs: 27,000 in June, to bring the total lost in financial services to 489,000 since the recession’s beginning in December, 2007. The information industry lost 21,000 jobs in June, and is down by 187,000 since the recession began. Publishing has accounted for about half the total job losses in this category.

The only real increase was seen in education and health care, which added 34,000 jobs in June. Health care job increases have averaged 21,000 per month, which is down from 2008’s average of 30,000 per month.

A broader indicator of the state of unemployment is the number of Americans who have given up looking for a job, or who are working part-time when they want full-time work: this number rose to 16.5% in June.

June’s unemployment figure tempered signs of progress in the US economy, and reiterate the fact that the job market remains weak—something 14.7 million Americans know only too well.

Source: United States Dept. of Labor, Bureau of Labor Statistics