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Despite two months of lagging job growth, outsized third-quarter layoffs and a projected slowdown in temporary-worker demand, employers foresee more hiring during the final quarter of the year.
CareerBuilder is projecting the most robust hiring since 2006, reinforcing the findings of the recently released Jobs Outlook Survey from the Society for Human Resource Management (SHRM), which showed that nearly 70 percent of HR professionals are optimistic about hiring through year’s end.
Thirty-four percent of U.S. employers plan to hire regular full-time staff in the fourth quarter of 2015, and nearly the same percentage (33 percent) expect to add seasonal staff, according to CareerBuilder. More than half (53 percent) of retailers plan to hire seasonal workers in the fourth quarter, up 10 percentage points over last year. Manufacturers, however, are slowing down on their staffing efforts.
“When we surveyed HR professionals in July, they were fairly optimistic about hiring for the second half of the year,” said Jennifer Schramm, SHRM-SCP, manager of workforce trends at SHRM. “However, recent monthly employment expectations data from our LINE Report suggest that manufacturing firms are not hiring at the same pace they were earlier in the year. This is likely due at least in part to the strong U.S. dollar’s drag on exports.”
Schramm added that optimistic seasonal hiring forecasts probably stem from expectations that consumer spending will be strong at the start of the holiday season.
The CareerBuilder survey was conducted online by Harris Poll from Aug. 12 to Sept. 2, 2015, and included a representative sample of 2,326 hiring managers and human resource professionals across industries and company sizes.
Employers Staff Up for the Holidays
Some employers have already announced robust hiring plans for seasonal employees, including:
The National Retail Federation announced that it expects sales in November and December 2015 to increase 3.7 percent—higher than the 10-year average of 2.5 percent, but lower than last year’s 4.1 percent growth over the previous year.
Paychecks, too, are getting bigger as the year goes on.
“Employer confidence is widespread,” said Matt Ferguson, CEO of CareerBuilder, in a news statement. “Hiring will continue on an upward trajectory for both permanent and seasonal positions, with pay expected to improve over last year as companies keep pace with minimum wage hikes and compete more aggressively for elusive talent.”
SHRM’s Leading Indicators of National Employment (LINE) Report for September 2015 shows that wages are rising, however slowly. Seventeen percent of employers in the manufacturing sector and 20 percent of employers in the service sector increased pay for new hires, representing four-year highs for the month of August for both sectors.
Employers’ hiring projections for the fourth quarter of 2015 show year-over-year gains of 29 percent vs. 2014 and 25 percent vs. 2013, according to the CareerBuilder findings. Ten percent of employers expect to reduce staff, about equal to the 9 percent expected last year, while 52 percent anticipate no change and 4 percent are unsure.
Expected seasonal hiring over the next three months shows an increase of 26 percent above the final quarter of 2014. Fifty-seven percent of employers expect to transition some seasonal staff into regular full-time roles, up from 42 percent last year.
Temp Agency Hiring to Slow Down
In contrast with general hiring, temporary-worker hiring is forecast to slow down in the last quarter of 2015, after trending up since 2010, according to the Palmer Forecast, which measures the number of new temporary workers hired by staffing agencies.
Demand for temporary workers in the United States for the fourth quarter of 2015 is expected to increase 2.9 percent over the same period in 2014, the slowest quarterly increase in more than five years.
“The data shows that temp help as a percentage of new job growth is tapering off, which indicates the likelihood of increases in pricing, margins, direct hire and conversion fees in the staffing industry,” said Greg Palmer, founder and managing director of G. Palmer & Associates, which produces the forecast.
Jobless Claims Fall Despite Record Layoffs
The unemployment rate is at 5.1 percent, near where the federal government defines full employment. But when discouraged workers who are out of the labor force and not currently looking for work and part-time workers who want to work full time are included in the calculation, the rate is at 10 percent. That’s above its 8 percent low in 2007 but far below its recession peak of 17 percent.
In fact, the number of Americans filing new applications for jobless benefits dropped to near a 42-year low for the week ending Oct. 3, 2015, according to the U.S. Labor Department, further pointing to a tightening labor market.
That positive metric is offset by the largest number of quarterly job cuts since the third quarter of 2009. U.S.-based employers announced 205,759 layoffs in the third quarter of 2015, according to global outplacement consultancy Challenger, Gray & Christmas.
Nearly half a million layoffs (493,431) have been announced so far this year. That’s 36 percent more than the 363,408 job cuts from January through September 2014. The year-to-date total is actually 2 percent higher than the 2014 year-end total of 483,171.
“Job cuts have already surpassed last year’s total and are on track to end the year as the highest annual total since 2009, when nearly 1.3 million layoffs were announced at the tail end of the recession,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
But experts don’t take the layoffs as a marker of a troubled economy.
“These job cuts are more evidence of churn in the labor market rather than a sign of weakness,” said Tara Sinclair, chief economist for job site Indeed and a professor at George Washington University in Washington, D.C. She pointed out that job openings are at a record high and job postings on Indeed have been very strong, showing growth across all sectors.
“Overall the economy is still adding jobs, though recently not at the rate we’d like it to be and well under the numbers that economists have been predicting ahead of the monthly jobs reports,” Schramm said. “Part of the problem right now is uncertainty, but we’ve also seen some evidence in our research that organizations may be shifting toward more informal employment models. So some may be reducing their regular workforce but then planning to add back in contingent workers if demand for their products and services ramps up.”
Roy Maurer is an online editor/manager for SHRM.
Follow him @SHRMRoy
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