2012 Job Market Perspectives

2012 Job market perspectives

2011 was a year that was marked by job growth, albeit not at a pace many had hoped for.

3


Growing gradually

Looking back, we can now see that each month in 2011 was indeed marked by job growth and the nation is not facing a double-dip recession. While August data initially suggested zero new jobs, it was quickly revised the following month to show the addition of 104,000 jobs; as of November 2011, job growth has occurred during every month of 2011.

More significant growth is needed in 2012.

Although the economy averaged an addition of 132,000 jobs a month in 2011, there is still a long way to go to account for the seven million jobs lost since December 2007 — job growth will need to be in the hundreds of thousands each month in 2012.

This can be accomplished, but the government and private sector will both need to work towards this goal. In the upcoming election year, more elected officials will be called upon by their constituents to put political partisanship aside and get America working, while ensuring that the public sector does not continue to lose more jobs; a pattern seen throughout 2011.

In the private sector, employers who have employees at maximum productivity will need to consider flexible ways to augment their workforce to allow for growth;

something consistently seen throughout 2011, as evidenced by temporary sector growth of 126,000, from January to November 2011. This method has been favored as a way for employers to shape their workforce based on demand and need in a quick and responsive manner while taking an uneven recovery pattern into account.

We believe that other service providing industries will thrive in the coming year, including business and professional services, IT and healthcare. We are also optimistic that manufacturing will continue its rebound from the recession and jobs will be added.

Adecco’s 2012 Job market perspectives report explores both the current and future labor market while looking into the key elements that will continue to impact both the U.S. economy and job market in the next year and beyond. We hope this report will serve as a valuable resource to assist you in the optimization of your organization in a year that will most assuredly be one of transition and growth in the right direction.

In the first part of the year, high non-farm payroll growth took place in

February, March and April leading many to believe that the job market was

back on the path to robust growth with job additions in the hundreds of

thousands each month. However, by May, the numbers dropped a bit as

concerns began to arise that the United States economy was preparing

for a double-dip recession.

4

Key moments in time: 2011

Gain of 68,000 jobs

January

April

Gain of 217,000 jobs

February

Winter storms lash out from Midwest to Northeast affecting American’s ability to work, or find jobs

College graduate hiring is expected to be higher in 2011 than in recent years

May

Japan hit by mas-sive earthquake and tsunami with ripple effects felt globally

March

June

Riots break out in Greece over austerity measures, economic troubles, and high unemployment rates

5


Gain of 127,000 jobs

July

August

BLS reports a job gain of 0 for the month; later revised to 104,000

President Obama introduces American Jobs Act to aid in get-ting America back to work and providing tax cuts; estimated cost of Act is $447 billion

Government narrowly avoids shutdown amidst spending debate in Congress

September

October

Occupy Wall Street Movement gains momentum

One year away from 2012 presidential election

NovemberDecember

Seasonal job growth paints picture for 2012

6

It’s a global economy — for better and worse.

Globally, the earthquake and subsequent tsunami that jolted Japan early in 2011 sent a ripple effect through a number of economies as production and manufacturing came to a slow crawl for a number of months. On the policy side, European countries like Spain and Greece continued to face record high unemployment rates and political unrest over financial policies.

While European financial woes and Japanese natural disasters may not have affected the U.S. economy 20 years ago, the globalization of the world we live in has led to a magnification of all issues. Just as the United States is impacted by other countries, other countries are equally — if not more — impacted by dips in the U.S. economy.

Slowly growing the U.S. job market.

While 2011 started with robust hiring, normalization in new hiring was seen in a number of sectors by the middle of the year. For the most part, growth was still happening, just at a much slower rate than expected or needed for job recovery.

One of the terms used frequently in the past year was “jobless recovery;” the concept that economic output would grow, but it would not immediately generate job growth. While some suggest this is taking place, a number of months showcasing strong job growth could change this belief.

As President Obama and many economists have mentioned throughout the year, the possibility for an im-mediate rebound in jobs is something that isn’t possible based on the trends seen in the current recession and subsequent recovery time frame — this one will be more drawn out, which is a newer trend occurring in modern recessions.

The McKinsey Global Institute, the business and economics research arm of the consulting company, estimates that for jobs to return to a pre-recession level with unemployment of 5%, the United States will need to create 21 million net new jobs to account for jobs that have been lost, as well as new entrants into the labor force.

To accomplish this, there are three scenarios that could occur: low, medium, or high job growth. Based on this model, net new job growth would look like:

The economy and job market

Source: McKinsey Global Institute “An economy that works: Job creation and America’s Future”

As of November 2011, the United States was aver-aging a monthly net new job creation of 132,000 throughout the year, largely in part of sizeable month-over-month government job losses.

For these much needed gains to take place in 2012, the private sector must add more job seekers to payrolls. By doing so, the unemployment rate will decrease, and consumer confidence will increase — two of the most important elements to rebuilding the economy at a faster pace.

An additional way to spawn growth is through the creation of new businesses. To help this occur President Obama has a number of tax incentives currently in place as well as a number in Act.

Job growth

Jobs created by 2020

Low 77,000 9.3 million

Medium 145,000 17.4 million

High 187,000 22.5 million

Number of jobs added a month

7


In the last year, the job market experienced quite a few ups and downs, both globally and nationally.

The U.S. political climate

Looking back, 2011 will likely be

remembered as a year where the

job situation was top of mind for both

elected officials and their constituents.

As the cries from home districts became louder and louder throughout the year, those in Congress as well as President Obama faced greater demands than ever to revitalize the job market and get Americans back to work.

These challenges were underscored by the fact that the 112th Congress was one clearly marked by political partisanship over all forms of legislation, and particu-larly ones relating to budgets and funding. This was evidenced in September 2011 when last minute nego-tiations and agreements between the Republican and Democratic parties put a temporary end to months of political jockeying to prevent an imminent government shutdown.

While job growth continued throughout the year, the slow pace forced President Obama to take a more visible role in much needed job creation. As a result, in early September, he introduced the American Jobs Act.

8

9


The Act focuses on key areas including tax cuts and credits to aid and fuel growth in small businesses; getting Americans back to work while rebuilding and modernizing the nation; training and education oppor-tunities; and payroll tax cuts for middle class America. However, it received mixed reviews, largely in part of the $447 billion price tag that accompanied it. The president has gone on the record making it increasingly clear that the act is one of his top priorities and he will work to get it approved piece by piece if needed. As a result, the Republican party is expected to create a piece of rebut-tal legislation to encourage job growth.

In 2012, the fever pitch around the impending presidential election will only continue to grow, with the high unem-ployment rate and need for jobs being the number one issue on the campaign trail. Government officials will need to keep in mind that, outside of Washington, D.C., the focus should be on getting Main Street back to work without political partisanship.

Where the job market is growing

Throughout the recession and the continuing recovery, job growth has continued to vary greatly from sector to sector.

When reviewing net new jobs, a pattern became appar-ent: the jobs were returning in skilled areas, professional and business services (which includes legal, accounting, temporary and consulting jobs), and healthcare. In fact, healthcare is the one sector that has consistently added jobs throughout even the toughest of times. The industry added 3.7 million jobs in the 2000-2010 decade even with two recessions.

The leisure and hospitality, construction and retail sectors account for the largest percent of jobs today, and will only continue to grow in size within the next decade or so.

The McKinsey Global Institute predicts that, based on its low-, medium- and high-growth situations, health-care could add between 2.8-5.2 million jobs, business services 2.4-5.7 million and leisure and hospitality 2.1-3.3 million jobs — numbers that are certainly necessary for getting the economy back on track.

If we are to see a higher pace of job growth in 2012, these areas will need to continue to grow to fuel private sector growth, compensate for government sector losses, and encourage a rebound in consumer confidence.

“ We’re starting to see business grow in professional skills. Engineering has picked up dramatically. IT is seeing growth. Mortgage-related finance and accounting jobs have been strong too, because interest rates are so low and people are refinancing.”

Tig Gilliam, Adecco Group North America CEO, Wall Street Journal, January 2011

Throughout the recession — and even more so in the recovery —

there has been a constant dialogue around the need for

American workers to have more education. Each month, when

looking at the Bureau of Labor Statistics’ monthly employment

situation, the numbers speak for themselves; in November 2011,

the unemployment rate for someone without a high school

diploma is 13.2%, while a college graduate faces a much lower

rate at 4.4%.

The increased need for education

10

11


While it seems fairly easy to understand that a college degree or technical training can boost one’s career prospects and income, it may be more than most think. According to the Georgetown University Center on Education and the Workforce, the range in lifetime earnings is greatest between high school dropouts and those with graduate degrees or higher — a range of $1,198,000 to $4,650,000; a difference of $3,452,000.

In 2012 and beyond, higher education will become a larger component in the employment story. While highly educated Americans will see job prospects return, the McKinsey Global Institute predicts that only in high job growth circumstances will employment grow significantly for those with less than a college education.

Additionally, while one could argue that the United States is producing more college graduates than ever, McKinsey also predicts that, in a high job growth situation, the workforce of 2020 will be short 1.5 million college degrees.

Based on this information, it is more essential than ever for colleges and universities to partner with the private sector and truly gauge what students should be learn-ing. It is expected that colleges will produce a signifi-cantly higher amount of graduates in social sciences, liberal arts and business than in math, engineering and science — some of the sectors that will truly be facing a deficit in talent.

This trend will most certainly lead to a mismatch between what the overall workforce needs and what skills employees have. However, if higher education institutions get involved in the process now, more students can be exposed to the skills that will be all but mandatory in 10 years.

For those in the workforce, now is the time to supple-ment existing skills. An example of this is the manufac-turing sector — gone are the days of simply maintaining a spot on the line; today’s manufacturing jobs require technical knowledge in a wide range of areas.

As we look to the future, the workforce and educational systems must prepare current and future workers for the changes in the job market for America to stay competitive with other countries who are adjusting for this shift already.

12

2010-2011 change in workforce:

+169,000 jobs Number of American workers:

2.3 millionRegions in demand:

All

Situation overview.

Throughout 2011, the temporary sector continued to grow. While the extremely high monthly job additions in the sector have slowed a bit, the growth kept up throughout the year and, as of November, 126,000 jobs were added.

Temporary jobs have become such an integral part of the recovery as hiring managers turned to the sector as a quick and easy way to modify their workforces as needed. This trend will continue into 2012 as hiring managers may continue to be cautious around full time permanent hires.

Areas in demand.

Temporary jobs transcend all sectors, but high demand areas include finance, administrative support, healthcare, engineering, and information technology.

Source: BLS

Where the jobs are:

Temporary services

13



-10,000 jobs Unemployment rate:

6.1 percent Number of American workers:

7.6 million Regions in demand:

Northeast, West

Where the jobs are:

Situation overview.

On the whole, the financial services field is expect-ed to continue growing after a few troublesome years during the recession. While positions and skills can vary, all organizations depend on finan-cial professionals in some way, shape, or form.

The growth expected for financial analysts in the decade of 2008-2018 is higher than average at 20 percent, and anticipated growth for financial manager positions will be average in growth at 8 percent in the same time frame

Areas in demand.

The movement towards compliance, financial policies, risk mitigation and financial performance/optimization will lead the sector in new job growth.

Positions in the sector will be competitive on two fronts: analysts, which tend to have lucrative sala-ries, will face competition from a larger applicant pool, while managers will face competition based on a smaller number of positions available in the next decade.

Source: BLS

Financial services

Anticipated sector growth by 2018

3,400,000

3,200,000

3,000,000

2,800,000

05 06 07 08 09 10 11 12 13 14 15 16 17 18

14

Unemployment rate based on occupation:

Less than 4.0%-8.0% based on occupation 2010-2011 change in workforce:



West, South

Where the jobs are:

EngineeringSituation overview.

Talent will continue to be needed in the engineer-ing sector. While demand will vary based on specialty, green jobs seem to be on the rise. More and more, the line between traditional and green jobs will fade away as organizations look for ways of making projects more eco-friendly

Areas in demand.

While demand does vary by region based on needs, the sector as a whole is expected to continue to see an increase in job demands. The specialties seeing the largest increase in the 2008-2018 decade are biomedical engineering (72 percent increase), environmental engineering (31 percent increase) and civil engineering (24 percent increase).

Source: BLS and NACE

“For a lot of our clients, particularly those in the Pacific Northwest, it’s becoming increasingly difficult to separate ‘green’ jobs from mainstream jobs. As more states and businesses turn to green power generation and sustainable practices, we anticipate that the need and demand for profession-als with these skills will only continue to increase.” Anticipated Sector Growth by 2018

(source Georgetown University Center on education

and the Workforce)

Engineers and engineering technician occupations (2005-2018)

2,300,000

2,100,000

1,900,000

Source: Georgetown University Center on education and the Workforce

05 06 07 08 09 10 11 12 13 14 15 16 17 18

15



-3,100 jobs Number of American workers:


Northeast, West

Where the jobs are:

Legal services Situation overview.

From 2008-2018, numerous jobs within the legal sector are expected to grow, with the demand for paralegals expected to increase by 28 percent, lawyers by 13 percent and legal secretaries by 13 percent.

Areas in demand.

The increase in jobs within the sector will most likely come from a variety of sources as more legal transactions, civil disputes and criminal cases are expected to occur. Within the sector, those with healthcare, intellectual property, bankruptcy, corporate, antitrust security litigation and environ-mental law will be in highest demand.

Source: BLS

Unemployment rate:

7.7 percent2010-2011 change in workforce:


11.8 millionRegions in demand:

Midwest, West, South

ManufacturingSituation overview.

This sector continues to rebound — data reflective of August 2011 showed that 61 of the nation’s biggest 100 metropolitan areas gained manufacturing jobs in the last year. Detroit, a city hit hard by past sector job losses, emerged as the metropolitan area that created the most new manufacturing jobs with Western and Midwestern cities also adding a large amount of new positions.

Areas in demand.

Gone are the days of employees knowing only one role — today’s manufacturing organizations are looking for highly skilled job candidates who know multiple components to a process. Those individuals with well-rounded skills and techno-logical know-how will be in highest demand.

Source: BLS

16

Unemployment rate:

7.4 percent 2010-2011 change in workforce:

-54,000 jobs Number of American workers:


West, Northeast

Unemployment rate:

5.2 percent 2010-2011 change in workforce:



Midwest, West, South

Where the jobs are:

Situation overview.

As this sector continues to grow rapidly, all positions are expected to grow faster than average with computer software programmers being one of the fastest growing occupations in the 2008-2018 decade.

Areas in demand.

IT is an integral part of both personal and profes-sional life and the opportunities for growth in this sector are limitless and wide-ranging. While training and education may vary by position, those with a background in computer or technical skills will lead the pack.

The BLS predicts that, in the 2008-2018 decade, computer and information systems managers will see a 17 percent increase in employment, computer software engineers will see a 34 percent increase and computer network, systems, and database ad-ministrators will see a rate of growth of 30 percent.

Sources: BLS, InformationWeek.com

Information technology

HealthcareSituation overview.

As a result of an aging population and all the legis-lative changes associated with healthcare reform, healthcare is one of the hottest professions — and we expect growth to continue for years to come.

Areas in demand.

According to the BLS, about 26 percent of all new jobs created in the U.S. economy from now until 2018 will be in the healthcare and social assis-tance industry. This industry — which includes pub-lic and private hospitals, nursing and residential care facilities, and individual and family services — is expected to grow by 24 percent, or 4 million new jobs. Employment growth will be driven by an aging population and longer life expectancies.

Of the 20 fastest growing occupations in the economy, half are related to healthcare including home health aides, physician assistants, physical therapist aides and medical assistants.Source: BLS

17




937,000 Regions in demand:

Northeast, West, Midwest

Situation overview.

The BLS is predicting a 16 percent increase in job openings for accountants by 2016, which is largely attached to the move towards increasing financial oversight requirements such as Sarbanes-Oxley (SOX).

Demand will also continue to increase in tax and healthcare areas for accountants.

Areas in demand.

After the majority of states instituted the 150-hour rule for Certified Public Accountants, the enroll-ment in many accounting programs declined, boosting the need for CPAs in all areas of accoun-tancy. According to the American Institute for CPAs, nearly 90 percent of accounting firms reported an increased hiring of new graduates, indicating that the need for the public accounting background will continue into the foreseeable future.

Source: BLS, American Institute of CPAs

Where the jobs are:

Accounting

18

Regional insights

WestUnemployment rate: 10.3 percent as of October 2011

Hot sectors: Technology, professional services, retail

Strongest metropolitan areas: San Francisco, San Jose, Seattle, Boise, Boulder, San Diego

MidwestUnemployment rate: 8.5 percent as of October 2011

Hot sectors: Manufacturing, particularly in auto-producing manufacturing

Strongest metropolitan areas: Detroit, Cleveland, Grand Rapids, Omaha, Lansing

NortheastUnemployment rate: 8.1 percent as of October 2011

Hot sectors: Technology, export trade, education, healthcare, professional services

Strongest metropolitan areas: Boston, rochester, pittsburgh

SouthUnemployment rate: 9.0 percent as of October 2011

Hot sectors: Transportation, manufacturing

Strongest metropolitan areas: All of Texas’s major cities, Oklahoma City, New Orleans, Florida (particularly Miami and Tampa)


Sources: Moody’s Analytics, BLS

19


Moving forwardWhile 2011 will be remembered as a year of recovery and cautious optimism in the economy, we predict that 2012 will be one of transition and upward growth.

As we look to the future, American business leaders and employees are hopeful that policy makers can put aside partisanship to promote job growth and consumer confidence — not only for a stronger economy, but for a stronger nation as well.

About Adecco Staffing US

Adecco Staffing US is the nation’s leading provider of recruitment and workforce solutions. We are the pre-eminent workforce management partner for Fortune 500 companies and career advisement expert for American workers, serving all of the key industries and professions that drive our economy forward. Adecco has over 500 career centers and, on any given day, connects 70,000 talented workers to the best job opportunities across the country, making us one of America’s largest employers. Please visit us at adeccousa.com.

About the Adecco Group

The Adecco Group, based in Zurich, Switzerland, is the world’s leading provider of HR solutions. With approximately 33,000 FTE employees and over 5,500 branches, in over 60 countries and territories around the world, Adecco Group offers a wide variety of services, connecting over 750,000 associates with well over 100,000 clients every day. The services offered fall into the broad categories of temporary staffing, permanent placement, outsourcing, consulting and outplacement. The Adecco Group is a Fortune Global 500 company.

Adecco S.A. is registered in Switzerland (ISIN: CH0012138605) and listed on the SIX Swiss Exchange (ADEN).

877.8.adeccoadeccousa.com

©2011 Adecco. AMK2012

2012 Job Market Perspectives

Business

Transcript of 2012 Job Market Perspectives