LHH 2011 Job Market Perspectives Report

2011 Job market
perspectives

2011 Job market perspectives

Moving (slowly)
in the right direction.
Following one of the most challenging time periods for the U.S. economy and job market —
what is now referred to as the “Great Recession” — this past year introduced a level of stability
which helped to nudge the economic pendulum in a new direction. In an economic downturn
employees are less likely to abandon ship. Many workers are simply waiting for the job
market to improve to take advantage of new opportunities. With the economy predicted
to pick up, it is imperative for organizations to focus on engaging, retaining and developing
their most critical asset — their talent. If employees are not engaged now, organizations
risk losing a portion of their workforce as the economy improves.

While the country is getting closer to a place of Despite these positive developments, employers
economic recovery, it doesn’t mean that the road continued to move forward with hiring strategies that
traveled thus far has been easy, nor does it mean were centered around cautious optimism, leaving
that the road ahead will be fully straight, paved millions of Americans out of work. Cautious bits of
or short. good news — the private sector adding jobs, increased
home sales, improved manufacturing and retail sector
As the National Bureau of Economic Research
growth — were beginning to shine, but a nearly 10
announced that the recession was officially over,
percent unemployment rate, amongst other trends,
millions of Americans had a hard time believing this
made it hard be fully optimistic on where the economy
assertion as the connection between signs of success
was and is headed. Additionally, with a number
on Wall Street lagged Main Street realities. On the
of political changes for both healthcare and financial
positive side, the majority of financial institutions
reforms being passed, as well as a reshuffling of the
that needed assistance from the government began
House of Representatives, new economic and workforce
to turn profits, as well as the Big 3 automakers that
dynamics have been created that will have an impact
were in peril the year before. GDP started to grow,
on the future of the financial and job market situation.
consumer confidence began to show signs of life
and the temporary sector, a leading market indicator, LHH’s 2011 Job market perspectives report explores
experienced tremendous month over month job both the current and future labor market while looking
growth — something we saw first hand and helped beyond the headlines to provide a well-rounded
to power right here at Lee Hecht Harrison. analysis of the constantly evolving labor market.

We hope this guide will help you realign your
organization or your career for an upcoming year
of growth and recovery.

3

Key moments in time: 2010
• resident Obama
P
announces that Big 3
automakers are now
declaring profits

• odd-Frank Wall Street
D
Reform and Consumer
Protection Act passed

• il spill in the Gulf of
O
• atient Protection
P Mexico capped
and Affordable Care
• nemployment benefits
U
Act passed
extension passed by
• ob gain
J • arch/April 2010
M • il spill in the
O • ob gain of
J Congress and signed into
of 14,000 jobs Census hiring starts Gulf of Mexico 432,000 jobs effect by President Obama

January March April May July

4


• ob gain of 151,000 jobs
J

• idterm elections take
M
• ob loss of 95,000 jobs
J place — Republican Party
gains hold of House
• resident Obama
P
of Representatives and
proposes infrastructure
chips away at Democrat • ncreased consumer
I
plan to boost jobs
controlled Senate confidence and spending
and economy
around holiday shopping
• s of the November BLS
A
• s of September, over
A
• ast majority of over
V data, the private sector • Job gain of 103,000;
245,000 temporary jobs
500,000 U.S. Census jobs has added 1.17 million unemployment rate
have been added since
have come to an end private sector jobs in 2010 lowers to 9.4 percent
the start of the year

September October November December

5

The global economy and job market.

The global economy.
2010 was a year of economic transition. In North Amer-
ica, and in particular, the United States, it was marked
In the United States, the
by stronger than expected early growth, a slight decline economist forecast from
mid-year, and increasing optimism and positive news
in late 2010. In Europe, historically high unemployment The Wall Street Journal predicts
rates continued throughout the year with countries like that the unemployment rate
Greece and Ireland facing financial crises.
will be 8.9 percent by the
By fall of 2010, advanced global economies and more
emerging markets were at different points in the end of 2011 with non-farm
economic cycle with most Asian and Latin American payrolls adding an average
countries having nearly recovered from the recession.
In more advanced economies, the recovery, as noted of 152,000 jobs a month
above, has been a bit more transitional, with the world equaling just over 1.8 million
economy following the patterns of important countries
like the United States and Western Europe. jobs for the year.
2011 should fare better than the past two years with small
levels of growth taking place in Europe as well as the Additionally, salary budgets
United States. Economists estimate that GDP growth in for 2011 are projected to
the U.S. for the year will be just under 3.0 percent, which
is a half percent increase over 2010 and the inflation continue rising after hitting
rate holding below 2 percent for the year, which should historic lows in 2009,
allow business and consumer confidence to grow.
according to results from
The global job market. the 2010-2011 Culpepper
The job market and employment situation is expected
to pick up in 2011, continuing the momentum that began Salary Budget & Planning
in late 2010. In Europe, most economists feel that the Survey which contains data
unemployment rate will vary between 10.0 and 10.6
percent for the EU as a whole as some countries face from 933 organizations
much higher unemployment rates than others as seen in 90 countries.
with the Netherlands unemployment rate hovering
around 4.4 percent, and Spain still at a level above
20 percent.

From a sector perspective, global salary increases will
be most evident in technology, life sciences, healthcare
and alternative energies reinforcing the job demand
in these categories.

6


Salary freezes will be all but obsolete and the global
average base salary is expected to increase by 3.14 percent
— the highest boost since 2008.

7

The country’s political climate.

Top of mind in the political arena was the nation’s
economy and the employment situation which weighed
on the over 14 million jobless Americans facing a
reduction or an end to their unemployment benefits
as well as a lack of job options.

This sentiment was made clear as the Republican Party
won control of the House of Representatives, decreasing
the margin of Democrats in the Senate in November’s
mid-term elections. Evidently, Americans were not com-
pletely pleased with the status quo of their government
and its policies. The election also marked the gaining
2010 was a year of large scale changes clout of the Tea Party movement with a small number
of the party’s candidates being elected to Congress.
to the United States government
The 112th Congress will be one of varying ideals and
and its legislation. Two of the highest strategies around how to fix the United States’ ailments
profile pieces passed were the — particularly as some feel the economic recovery is
not going as it should. Although many members of
healthcare reform bill signed in March Congress are hoping to overturn the healthcare reform
as well as the financial reform bill bill passed in 2010, political experts note that ultimately,
there may not be enough votes to do so.
which was signed into effect in July.
Other pieces of legislation that will be top of mind in
2011 will be tax breaks for higher income earners, and
a dialogue around how to diminish the unemployment
rate and return it to pre-recession levels as quickly
as possible.

Collaboration is essential.
With many political analysts seeing a breakdown
of communication and political gridlock as virtually
inevitable, this will certainly prevent issues from
being resolved.

As both political parties start looking towards the larger
2012 presidential election, 2011 cannot be a year of
political maneuvering, and it must focus on collaboration
between President Obama and Congress in order
for the country to grow stronger and move forward.

8


Impact of the healthcare reform law Impact of financial reform law
on the U.S. workforce. on the U.S. workforce.

• A
s many as 32 million U.S. residents gained • B
ill is single largest overhaul on the U.S. financial
coverage, mainly through expanding Medicaid regulatory system since the Great Depression.
and extended federally subsidized health
insurance premiums for the uninsured. • H
eightened market regulations, the Consumer
Financial Protection Bureau, Volcker Rule and
• E
mployers were required to modify plans to Federal Insurance Office put into effect.
comply with a wide range of new requirements,
such as continuing coverage for employees’ • B
ased on an expanded need for compliance
adult children. and transparency, businesses will need to
modify staffing plans, and in many cases, create
• E
ffective in 2014, employers with at least 50 positions to adhere to new laws.
employees will face an annual penalty of $2,000
for each employee they do not offer affordable
coverage to.

• B
ased on increased coverage for workers,
millions of new healthcare jobs will be needed
to meet expanded coverage.

9

Looking behind the numbers.

When reviewing the monthly employment situation What is the U-6 unemployment rate?
report produced by the U.S. Department of Labor’s The U-6 unemployment rate includes both people
Bureau of Labor Statistics (BLS), a general unemploy- looking for full-time jobs as well as “marginally attached
ment number is produced that is widely used not only workers and those working part-time for economic
as a job marker, but as a broad economic indicator. reasons.” The “marginally attached workers” include
This number, which was 9.4 percent as of December those who have gotten discouraged and stopped
2010, and will most likely remain in the 9 percent looking, but still want to work. The age considered
range for at least a part of 2011, counts individuals that for this calculation is 16 years and over — comprising
are without work and seeking full-time employment. a much larger number of people.
The 9.4 percent unemployment rate is calculated based When factoring in this number, the broader unemploy-
on people who are without jobs, who are available ment rate then rises to 16.7 percent as of December 2010,
to work and who have actively sought work in the prior marking a much higher number than the commonly
four weeks. The “actively looking for work” definition referenced one. Another factor that plays a large part
can be fairly broad, including people who contacted into unemployment is the level of education an individual
an employer, employment agency or job center, sent has. In 2009, the average unemployment rate across
out resumes or filled out applications, or answered all ethnicities for an individual with a bachelor’s degree
ads. The rate is calculated by dividing that number by or higher was 4.6 percent — significantly lower than
the total number of people in the labor force. Although the general and U-6 unemployment rate.
the number is the general one used, a number we
believe that more people will look at in 2011 is the U-6 We anticipate that the unemployment rate may
unemployment rate. potentially rise in the beginning of 2011, but this should
be seen as a positive indicator. While this may seem
In addition, LHH’s monthly Workplace Economy report counterintuitive, the increasing unemployment rate
offers you an in-depth look at the latest jobs report means that Americans who had previously given
from the Bureau of Labor Statistics (“BLS”) and features up on the job search are now re-entering it as active
advice for organizations in this changing economy. job seekers.
Be sure to add lhhworkplaceeconomy.com to your
favorites and check back frequently for continuous up-
dates from the BLS — this is a great resource for getting
all the latest workplace news and employment trends.

10


This trend means that we will see a larger number of Americans
rejoin the labor force, which will increase the number of
unemployed, active job seekers who are no longer discouraged
in their job search. As these individuals are placed, we will begin
to see those unemployment numbers normalize and decrease.

With the stabilization of the economy, employees who are critical
to an organizations current and future performance will become
more sought after making it imperative to focus attention on
engaging, retaining and developing these critical members
of the workforce.

For our latest research study on Leadership Development
produced in partnership with Human Capital
Institute, visit LHH.com.

11

Higher education
equals lower unemployment.

As the economy continues to The White House Summit on Community Colleges
recover, one trend becoming took place in the fall of 2010, with President Obama
increasingly clear is the providing $2 billion to fund the Community College
return and augmentation and Career Training initiative in the Health Care
of the number of skilled job and Education Reconciliation Act that he signed on
opportunities available. This March 30, 2010. The current administration has set
marks a different pattern than seen in past recessions two national goals: by 2020, America will once again
where goods-producing jobs led economic recovery. have the highest proportion of college graduates
in the world, and community colleges will produce
In addition, increased global competition and the
an additional 5 million graduates.
continuing trend of outsourcing jobs are making it
more critical than ever for job seekers and the employed The Recovery Act will also play a large part moving
to be educated and seek further professional training. forward, as community colleges will also be the
beneficiaries of $1 billion for training programs in
As discussed earlier, unemployment rates vary greatly
clean energy industries, health information technology
— in some cases as much as 10 percent — by levels of
and retraining programs.
education. In the near future, jobs in fields which require
at least an associate degree are projected to grow To complement this program, the White House
twice as fast as those requiring no college experience, also launched an additional program called Skills
and 8 of 10 jobs will require college or other specialized for America’s Future which will build job training
training, according to a White House report. partnerships between community colleges, industry,
and labor unions in all 50 states. The partnership
A bachelor’s degree isn’t the only solution. will also include a number of prominent American
While a bachelor’s degree or higher is an ideal situation, companies who are committing to training their
there are other options available for American workers. staff in a number of areas including leadership
The Obama administration feels that education will and technology skills.
be a huge component to economic recovery and With funds reaching state level to directly impact
progress and has initiated two programs through the workforce, these two programs will change the
the White House as a way to bring this to the forefront. future of adult education and training, which, as
mentioned, will be extremely important in a number
of sectors including green-energy, healthcare and
professional services.

12


8 out of 10 jobs will require college or other specialized training,
according to a White House report.

13

Where the jobs are:

Temporary services

2009-2010 change in workforce:

+308,400
Number of American workers:

2.2 million
Regions in demand:

All

Situation overview. “Temporary employment today,
Temporary jobs have been one of the leading sectors coming more than ever before, is likely
out of the recession with the creation of over 495,000 jobs
to lead to permanent employment
since a low in September 2009. This sector will continue
to generate new jobs and growth will be led by businesses
tomorrow.”
in need of employees to manage temporary and seasonal Peter Alcide
increases in workloads, demand for specialized workers President and COO, LeeHecht Harrison.

and businesses looking to expand without bringing on Source: BLS
permanent staff.

Temporary hiring is a method that a large amount of
employers have opted for as they emerge from the recession.
It allows for a workforce model that contracts or expands
rapidly according to business needs, making it an ideal
way to begin bringing staff on. Additionally, more and more
workers are searching for job opportunities that offer flexibility.
Based on this, there will be a large amount of jobs added
to the temporary sector in the foreseeable future.

Areas in demand.
While all sectors need temporary staff members, some
of the most high demand sectors are healthcare, office and
administrative support, production, transportation, finance,
information technology and engineering.
14


Where the jobs are:

Manufacturing

Unemployment rate:

10.0 percent (not seasonally adjusted)

+136,000

11.67 million
Regions in demand:

Midwest, South

Situation overview. “Manufacturing is very robust for us
Although 2009 was a rough year for the sector, manufacturing right now. Skilled machinists and
is recovering and was seen as one of the bright spots in 2010
machine operators in some places
with a 1.6 percent gain in jobs — about twice the pace of growth
in other private sector jobs. Additionally, the industry had one
are getting tougher to come by.”
of its biggest percentage gains in jobs since 1994. Donna Carroll, Vice President, Adecco Staffing U.S.,
CNN Money, September 2010

Areas in demand. Source: BLS, Fortune.com
With the Big 3 auto manufacturers declaring profits in 2010,
things are looking significantly better for the auto industry,
as well as for skilled workers. As consumer confidence
continues to grow, there will be a greater demand for goods
and employees to create them.

15

Where the jobs are:

Financial services

Unemployment rate:


-42,900

7.6 million
Regions in demand:

Northeast, West

Situation overview.
While finance was one of the first sectors heavily impacted by
the recession and the financial crisis, jobs are returning bit by bit,
month over month. While jobs are still short of the level they were
at in 2009, the sector will rebound and is expected to return to
pre-recession levels in the next few years.

Areas in demand.
While roles in all financial sectors will re-emerge, a push towards
compliance, financial policies and risk mitigation will bring in
a new era of financial jobs. While being a trader or an analyst
was once seen as a highly desirable job, these new positions
will be much more in demand in the future reflecting the changes
in financial reform.

Source: BLS

16


Where the jobs are:

Legal services


+1,200

1.1 million
Regions in demand:

Northeast, West, Midwest

Situation overview.
Within the next eight years, the employment of lawyers and
other legal jobs is expected to grow around 13 percent. Experts
believe this will be a result of an increased number of legal
transactions, civil disputes, and criminal cases. Additionally,
while the country was in recession, a number of people chose
to return to school for advanced or graduate degrees. As a result,
the number of entrants in law school increased significantly
with more Americans choosing to either change their career
or further their skill sets.

Areas in demand.
Jobs in the sector will also result from an increasing demand
for services in areas such as healthcare, intellectual property,
bankruptcy, corporate and security litigation, antitrust law, and
environmental law. In addition, the popularity of legal clinics may
result in an increased use of legal services by the middle class.

Source: BLS, Fortune.com

17

Where the jobs are:

Healthcare

Unemployment rate:


+266,000

13.9 million
Regions in demand:

All

Situation overview.
As a result of an aging population and all the legislative
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 assistance industry. This industry — which includes
public 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

18


Where the jobs are:

Engineering

Unemployment rate based on occupation:

4-6 percent

-17,000

1.27 million
Regions in demand:

Midwest, South

Situation overview.
Services providing jobs will continue to be in demand —
particularly in highly technical professions like engineering.
Through the stimulus and White House grants, a number
of infrastructure projects will fuel portions of the sector.

Areas in demand.
Engineering degrees account for four of the five most highly
paid majors among the college Class of 2010, according
to the National Association of Colleges and Employers (NACE).
The highest starting salary offers include:

Petroleum Engineering ..................................................$74,799
Chemical Engineering .................................................. $65,628
Computer Engineering .................................................. $59,917
Electrical/Electronics Engineering ................................. $59,391

Additionally, in subsectors like utilities and energy, the demand
for professionals will continue to rise as green technologies
emerge and the vast majority of employees in this sector reach
retirement age.

Source: BLS and NACE

19

Where the jobs are:

Information technology

Unemployment rate:

4.5 percent

+52,700

1.48 million
Regions in demand:

West, Northeast

Situation overview.
Nearly all organizations rely on computer and information
technology to aid in business.

The industry grew dramatically throughout the 1990s,
as employment more than doubled. While growth has been
decidedly slower in the last decade, this industry is still
projected to be one of the 10 fastest growing in the nation.

Areas in demand.
The industry will add about 656,400 jobs over the decade,
placing it among the five industries with the largest job growth,
particularly as we face an increasing reliance on information
technology.

Growth will also come from the need to maintain networks and
computer system security. Additionally, analysts and developers
will be needed to develop new antivirus software, programs,
and procedures.

Sources: BLS, InformationWeek.com

20


Where the jobs are:

Accounting


-53,300 jobs

863,000
Regions in demand:

Northeast, West, Midwest

Situation overview.
While most accountants work in private industry and
government, around a quarter of accountants and auditors
work for accounting, tax preparation, bookkeeping, and
payroll service firms.

Most accountants find work in urban areas, where accounting
firms and central or regional offices of businesses are
concentrated.

Areas in demand.
As the economy grows and businesses become globalized,
more accountants will be needed to set up books, prepare taxes,
and provide management advice.

Accountants will also be needed as financial reforms and an
emphasis on transparency and compliance grows. An increased
importance will be placed on watching company finances
and accounting procedures, thus creating opportunities for
accountants and auditors, particularly CPAs, to audit financial
records. Management accountants and internal auditors
will be needed to discover and eliminate fraud before audits,
and ensure that processes and procedures are documented
accurately and thoroughly.

Source: BLS
21


Regional and geographic insights:

West Northeast
Unemployment rate: Unemployment rate:
10.9 percent 8.5 percent

Hot sectors: Hot sectors:
Manufacturing, exports, Education, healthcare, professional and
professional and business services, mining, business services, ambulatory care, finance
information technology

Midwest South
Unemployment rate: Unemployment rate:
9.1 percent 9.2 percent

Hot sectors: Hot sectors:
Manufacturing, professional and Energy, healthcare, utilities, green jobs
business services, finance, transportation

*Unemployment rates reflective of November 2010 BLS data.

22

2010 will be a year remembered for cautious optimism
and glimmers of visible hope in the economy and job
market. Most economists have high hopes for 2011 — that it
Moving forward
will be remembered as a year of onward and upward growth,
moving the dialogue from “recovering” to “recovered.”

As the U.S. labor market continues to find its footing
following the economic crisis of the past few years, the
road to recovery is going to be a constantly evolving journey.
In order for unemployment to drop below its current
highs, a wide range of job seekers including the currently
unemployed, underemployed and discouraged will
need to find new opportunities. The consensus is that we
will get there, but not without some patience, resilience
and perseverance.

About Lee Hecht Harrison

With over 270 offices worldwide, Lee Hecht Harrison is the global talent development leader
in connecting people to jobs and helping individuals improve performance. LHH assists
organizations in supporting restructuring efforts, developing leaders at all levels, engaging
and retaining critical talent, and maintaining productivity through change.

Lee Hecht Harrison is part of Adecco Group, the world leader in workforce solutions with
over 6,000 offices in over 70 countries and territories around the world. For more information,
please visit LHH.com.

800.611.4LHH
LHH.com

©2011 LHH

LHH 2011 Job Market Perspectives Report

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LHH 2011 Job Market Perspectives Report