The Hiring Resource

Unemployment Dropped Slightly...Really?

2009-08-11T12:18:00.000-07:00

So, the Fed says the national unemployment rate dropped from 9.5% to 9.4% from June to July. Really? Is this a blip or is it a 1-month trend?

Several experts watching the unemployment rate immediately discounted the slight drop as nothing permanent, and as a data point that isn't real anyway. So what's the real unemployment rate you ask? As always, it depends on who you believe, but several 'experts' say it's more like 16% or more because of the number of unemployed people that aren't getting counted because they aren't filing for unemployment claims anymore. Unemployment insurance only pays out for a certain period, although it would be foolish to tell you how long since the Fed keeps extending it. However, once you have exhausted the period (and eventually you will if you don't get re-employed), you don't get counted in this national statistic anymore.

So what you may be asking yourself right about now! Who cares how they count it! Well, start caring. Why? In July, job losses continued in many of the major industry sectors (BLS). Also, 1 in 3 unemployed persons were jobless for 27 weeks or more (that's 6 months people). On top of that, most experts conclude that the unemployment rate will continue to rise in the months to come. We will wait to see if this is true, but suffice to say, this is far from over yet. Getting back into the work force once you've been laid off can be very hard (which indicates there's not a lot of hiring going on still), and although the economy has a few positive pointers, my opinion is that things will get worse or at best bump along the bottom through the end of the year. Let's hope I'm wrong.

Punitive Tax Structure Hurts Small Businesses During Economic Downturns

2009-07-29T15:53:00.000-07:00

As most of you know, small businesses (less than 500 employees) are vital for job creation in the U.S. The figures vary depending on who's data you pull, but range from 51% to over 90%. The SBA (U.S. Small Business Administration) reports that since the mid-1990's, small businesses have created 60-80% of all new net jobs., and in 2005, that figure was 78.9%. Half the business start ups that employ people are still operating five years after they open. (Business Week).

But unless you own or have owned a small business, you may not realize how the government makes economic downturns significantly worse through their tax policies. If a small business makes profits, their tax advisor/CPA is likely to advise them to bonus it out, purchase equipment, or face the nasty consequences of losing a huge chunk of it to taxes when you file your annual tax return.

So, what does this lead to? Based on these short-sided tax regulations, do you think small businesses have a stash of cash saved up for the rainy days? NO! They spend it to avoid paying more in taxes. So what happens when a small biz hits a recession? They fail. 64.2% fail within the first 10 years (Business Week). Small businesses are told NOT to save that cash and get stuck with the taxes, so when times are tough, they have no nest egg to fall back on.

Since small businesses create the bulk of the jobs in the U.S., and over half fail within 10 years, imagine the negative impact on net job growth, especially in a recession. And our government wonders why layoffs are still going up and job creation is down, when we need job growth desperately now.

Small businesses need lower taxes, incentives to save for the rainy day, and less regulation. Let the horses run...

Feb Beige Book Shows Recession Easing

2009-07-29T12:11:00.000-07:00

As reported today in the WSJ, the Fed's latest beige book report shows that the recession is easing, basically saying things are "stablizing", but "real estate markets remain weak and credit conditions are still tight...".

Unfortunately for staffing providers, unemployment continues to rise, and is expected to continue to rise over the next few months. So what does that mean for the staffing industry and those poor people in the worst job market in recent history?

It boils down to continued layoffs and fewer opportunities for those looking to re-engage in the work force. Durable goods fell in June, with much of that attributed to fewer cars, planes, and boats being manufactured. Lower levels of durable goods is linked to lower levels of discretionary spending by the consumer and increased savings (the highest in the last 15-20 years). People are still holding on to their money.

Until the government can actually get some of the stimulus money flowing into the hands of the small businesses that make up 90% of all job creation in the U.S., you can forget a substantial recovery.

Staffing providers will continue to take it on the chin until the government realizes their failure to make the $$ trickle all the way down the chute.

Using Recruiting and Staffing Services

2009-06-22T14:03:00.000-07:00

July 9, 2009

Why use a recruiter or a staffing service? As with anything, there are pros and cons, but in my opinion, more pros than cons.

First, you must know what YOU want! What type or types of positions are you willing to take, are you willing to relocate for the right job, what is your bottom salary that you will take? The list goes on, and there are tons of ideas, questions, and other help you can tap into on the internet. Just go to Google and type in "looking for a job" or a similar phrase and you will have hours to reading, and lots of good ideas and help to get you squared away for the "what you want" question.

Once you've determined what you want, using a recruiting firm or recruiter or headhunter (slang for recruiter) is a good option. Most services are free. I wouldn't use one that charges unless you KNOW you are going to get a return on that investment, and that can be tough to really determine. A good recruiter can be like a good talent agent...they represent you to their clients...they sell you in the door, instead of you emailing your resume to the HR department along with 100's of others. This gets you put at the head of the line hopefully. A good recruiter will dig into your work history, what you are looking for, and then go to work on your behalf, trying to match you with his clients open positions. If he has no positions matching you, he should tell you (and you should ask). Call him/her once a week to touch base. It is ok to have several recruiters working with you or on your behalf, as each recruiting company may have different clients, therefore different opportunities.

Bottom line...work all the angles when you are looking for a job, but definitely don't leave out the recruiter option!

Happy hunting!

Unemployment Continues to Rise

2009-06-07T06:40:00.000-07:00

As most of you know by now, the unemployment figures were released on Friday, June 5, 2009, and the news was not good. The unemployment rate is now 9.4% according to the DOL (http://www.dol.gov/) as another 345,000 jobs were lost in May, bringing the recession's total job loss tally to over 6 million jobs (mid 07 to now). Some of the media tried to spin this news in a positive light, saying the job losses are slowing, and I guess that's true. Even still, companies continue to cut jobs. How should one view this trend? No doubt, everyone has their own take. Consider at least two things: unemployment is a lagging indicator in our economy, and as long as layoffs are still occurring, have we really hit "bottom" as some talking heads claim? Let's take the first consideration...if unemployment lags other economic indicators, one might ask..."by how much?" Could we be at 'bottom' already and just don't know it? A good example of this lag is how unemployment went from 5.6% in 2002 to 6% in 2003, even though the recession ended in 2002. The more optimistic companies are, the more unemployment typically falls. Since the number of new jobless claims has dropped for 3 months in a row now, one could assume there is an optimistic shift out there. Depending on how far the lag, we could be at 'bottom'. If you're interested in reading more about lagging indicators, see About.com's story by Ken Little(http://stocks.about.com/od/glossary/g/laggingindic.htm).

So, we've discussed the lag...but why are layoffs still occurring? There are more factors than time to discuss them all, but a few worth mentioning are...1) companies are still held accountable by their stakeholders to maintain and improve the value of their company, so layoffs could continue as management tries to prop up their sagging profits by cutting cost (people) in a period where revenue generation is much weaker than a year ago. 2) Market shifts can ripple very fast in some industries, especially those with JIT inventories, and much slower in other industries. The auto shake-out is not over yet, and may drive more layoffs as the effects of bankruptcies ripple through various tier suppliers. Some experts say the automotive sector makes up roughly 10% of all U.S. GDP, so as the current changes propagate, more layoffs will likely come as some of these tier suppliers will shut down or be greatly diminished.

So, what does all this mean to you? It depends on where you are in life, in your career, where you live, etc. There are some positive signs...things to be optimistic about (stock market, housing starts, etc), but as they say, "pray for the best, but prepare for the worst". Its hard to believe that we are completely out of the woods yet. We may drag along the bottom with pockets of improvements here and there, a good news/bad news kind of thing for the rest of this year. Beyond that timeframe, I believe we will be facing another version of trouble...inflation. But as we are in a deflationary period, most people are choosing not to worry about that one yet... one problem at a time, right?

One last thought...it was reported last week that personal savings rate is the highest it's been since 2-1-1995 (http://research.stlouisfed.org/fred2/data/PSAVERT.txt). What does this mean? One answer could be that people are still scared and are holding on to their money. Until that fear can be mitigated and spending returns to normal as a result, the economy cannot fully recover. With so much of the media being all about the negative story line, I think that fear will continue to drive consumers towards holding tight.

Unemployment will continue to rise probably through the end of the year, although at a decreasing rate, so those out there in the job market will continue to struggle to find much to chose from. Staffing companies have really taken it on the chin over the last 8-9 months, as their job orders have fallen in concert with the shrinking economy. While you may or may not believe in Reagan's politics, the one thing he did for the economy and for most Americans after he took office amid a horrible economy was to accentuate the positive, uplift the ideals that have made this country great, and turned the pessimism to optimism. We need someone to be the positive voice out there right now...