Recent Sales and Payroll Gains Could Portend Stronger Seasonal Hiring in 2010

The holiday hiring season is off to its strongest start since 2006, according to an analysis of Labor Department data by global outplacement firm Challenger, Gray & Christmas, Inc.

The latest employment situation report showed that retail payrolls experienced a net gain of 150,900 in October. That is three times greater than October 2009, when just 47,600 retail jobs were added. In 2008 — the worst holiday-hiring season in 22 years — retailers added only 38,600 seasonal workers.

To find a similar October kick-off to seasonal hiring, one would have to go back to 2006, when retail payrolls expanded by 150,600. Another 596,200 retail workers were added in November and December, bringing total seasonal hiring to 746,800 that year.

“This is a good sign that retailers feel more optimistic this year. Even if November and December hiring remains flat from a year ago, seasonal job growth will top 600,000 for the first time since 2007,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

In its annual holiday hiring forecast released in September, Challenger predicted that seasonal hiring would improve over 2008 and 2009, but would probably fall short of the job creation achieved in 2006 or 2007 when retail payrolls grew by 746,800 and 720,800, respectively.

“Increased hiring will not make it any easier to find a job for those seeking these types of seasonal positions. The competition remains stiff with so many people out of work. People who may have never considered working in retail previously, may now be willing to do so in light of long-term unemployment,” said Challenger.

“Job seekers who apply for positions online or blindly blanket retail outlets with completed applications will lose out to those who take more aggressive steps, such as visiting stores during slower hours and initiating face-to-face interactions with store managers.

“Additionally, while big holiday hiring plans have been announced by such stores as Toys R Us and Macy’s, job seekers should not overlook smaller mom-and-pop stores, as well as businesses outside of the retail sector that could see a holiday surge. Restaurants, shipping offices, event venues, caterers, etc., should also be on the target list for holiday job seekers,” Challenger advised.

Job Seeker Relocation Drops to Record Low as Home Values Prevent People from Moving

The percentage of unemployed managers and executives relocating for a new position fell to a record low in the third quarter of 2010, as a slightly improved job market and greatly depreciated home values combined to eliminate this option for most job seekers.

Just 6.9 percent of job seekers who found employment in the third quarter relocated for the new position. That was down from a relocation rate of 13.4 percent in the same quarter a year ago, according to the latest Challenger Job Market Index, a quarterly survey conducted by global outplacement consultancy Challenger, Gray & Christmas, Inc. among approximately 3,000 successful job seekers from a wide range of industries nationwide.
The relocation rate has been low for four consecutive quarters, averaging just 7.3 percent since the fourth quarter of 2009. The 6.9 percent figure in the quarter ending September 30 was the lowest ever recorded by the firm, which began its tracking in 1986.

“Continued weakness in the housing market is undoubtedly the biggest factor suppressing relocation. Job seekers who own a home – even if they are open to relocating for a new job – are basically stuck where they are if they are unable or unwilling to sell their homes without incurring a significant loss,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“In a strong job market, where talent is difficult to find, employers might be more willing to help offset some of the financial loss associated with relocation. However, at this early stage of the recovery, companies are still in cost-containment mode,” he added.

Job seekers may also be opting to eschew relocation due to increased confidence in their ability to find employment locally.

“Many areas have seen a slight improvement in the job market over the past year. While the gains have been small, for the most part, they may have been enough to lift job seekers from the sense of desperation that often compels people to relocate,” said Challenger.

According to state and local employment data from the Bureau of Labor Statistics, 167 metropolitan areas have seen their unemployment rates decline over the past 12 months, with 45 of those dropping by a percentage point or more. As of August, there were 232 metropolitan areas with unemployment rates below the national average of 9.6 percent. There were 91 cities with unemployment rates of 7.5 percent or below.

Furthermore, 27 states have experienced net gains in payroll levels over the 12-month period ending in August. Overall, a total of 500,600 new jobs have been added to payrolls in these states, or an average of 18,500 jobs added per state.

“The job market is expected to continue to improve in 2011. If it improves faster than the housing market, the inability of job seekers to relocate will become a major obstacle to sustained job creation,” warned Challenger.
“Right now, demand for new workers is not at a level that would force companies to bring in talent from outside their region. However, as the local talent pool starts to become depleted as the economy improves, companies will be compelled to cast a wider recruiting net. Unfortunately, the immobility of the workforce may mean that some employers will have to delay expansion plans, thus slowing the recovery,” he said.

“At that point, some large companies might have the financial ability to increase their relocation budgets and help offset the difference between the home value and selling price. However, small- and medium-size companies, where most of the new job growth is expected to occur, probably will be unable to cover the costs of relocation and make up for a candidate’s lost home value,” said Challenger.

Surprisingly, small companies currently appear more willing to cover relocation expenses. A 2010 Atlas Van Lines survey of companies found that 51 percent of companies with fewer than 500 employees offer full reimbursement of relocation expenses to new hires. Among companies with 500 to 4,999 employees, the percentage offering full reimbursement drops to 45 percent, while 47 percent of companies with 5,000 employees or more cover all moving expenses for new hires.

However, most companies draw the line when it comes to covering any losses on the sale of a home. Only 28 percent of all employers are willing to reimburse new hires for any loss on the sale of their home. The percentage of employers that reimburse for financial loss drops to 14 percent for companies with less than 500 employees.

“Even if business conditions improve to the point where more employers are willing and able reimburse new hires for relocation costs and for the financial losses experience by home sellers, there is no guarantee that candidates will be willing to move,” said Challenger.

Relocation has been on the decline since the early-1990s. In 1986, the quarterly relocation rate averaged 42 percent. In 1993, relocation averaged 35 percent over the year, but reached a record high of 49.2 percent in the second quarter. From 1994 through 2000, the quarterly average sank to 22 percent from 1994 through 2000. Since January 2001, the relocation rate has remained below 20 percent for 39 consecutive quarters.

“Several factors probably contributed to the decline in relocation. The country experienced a period of phenomenal growth, with many cities and states diversifying their economies. As a result, it was no longer necessary to relocate to Silicon Valley for a technology job, for example.” said Challenger.

“Furthermore, the same Internet technology that makes it easier to conduct an out-of-town job search also makes it easier for people to work from anywhere. Faster and cheaper Internet connections, coupled with relatively low air-travels costs, made it possible for job seekers to gain out-of-town employment without actually moving out of town,” he added.

Job Cuts Edge Up Slightly In October 37,986 planned cuts up 2.2% from September; pace of downsizing remains at decade low

Downsizing activity remained flat in October, as employers announced job cuts totaling 37,986 during the month. That was 2.2 percent more than the 37,151 planned layoffs in September, according to the latest job-cuts report released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.

October marks the sixth month in the last seven in which fewer than 40,000 job cuts were announced. It was the tenth consecutive month this year that saw fewer job cuts than the same period a year ago. Last month’s total was 32 percent lower than October 2009, when 55,679 job cuts were announced.

Overall, the pace of job cutting is down 62 percent from a year ago, with employers announcing 449,258 job cuts year to date, compared to 1,192,587 over the same period in 2009.

The heaviest downsizing in October was initiated by employers in the entertainment and leisure sector, where job cuts totaled 5,059. That was the largest number of job cuts in this sector since July 2008, when they reached 10,893. So far this year, entertainment and leisure companies announced 16,387.

The entertainment and leisure sector was followed closely by the government and non-profit sector, which has been the most prolific job cutter this year. These employers announced 4,749 in October. That is the lowest monthly job-cut total for the sector since January 2009 (2,298). Planned workforce reductions by government and non-profit to date total 128,218, which is down 20 percent from a 2009 ten-month total of 160,434.
“Job cuts are the lowest they have been in a decade, due in part to a slowly improving economy; if not the fact that many employers have basically cut their workforces to the bare minimum. Unfortunately, the lack of spending by consumers and businesses is stunting demand for new workers. The modest gains in business activity are currently being met by increasing hours of existing workers,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“The problem is that consumer spending will not increase until more people have jobs. But businesses won’t begin expanding production or hiring until there is more demand for their products and services. Increased government spending, while economically justified, has become politically unfeasible. So, right now, it is difficult to imagine what exactly will provide the spark for increased hiring and an accelerated recovery. Something has to provide that spark, though, or the economy will be stuck in mud for the foreseeable future,” noted Challenger.

On Job Action Day 2010, Focus on Your Competencies, Interests, and Values

Thanks to the good folks at QuintCareers.com, today is Job Action Day and that means that dozens of career bloggers are contributing content to help job seekers worldwide find their next great job.

I’ve known Randall and Kathy Hansen of QuintCareers.com for a decade and they’re two of the smartest, thoughtful, and caring leaders you’ll ever meet. The creation and promotion of this event is a perfect example. They could create the same content that the contributing bloggers do, but the Hansens know that they can make a bigger impact by getting more people involved as many and probably most users of CollegeRecruiter.com do not overlap with the users of QuintCareers.com and the same goes for the other Job Action Day contributors. So by galvanizing dozens, they reach tens of thousands and perhaps even hundreds of thousands of additional job seekers.

But enough hugs and kisses. What content am I contributing to Job Action Day 2010? I’m going to focus on what I believe to be the three primary factors that job seekers should use when deciding what type of job to go after. Many, many job seekers — especially less experienced ones like many of those using CollegeRecruiter.com — don’t fully appreciate that their choice of a career path or a job within that career path should not be determined by how much money they can make or even what they’re good at. Rather, their decision should be driven by three factors:

1. Competencies – What are you good at?
2. Interests – What do you like to do?
3. Values – What is important to you?

Too many job seekers look for work in an area that lines up well with one or perhaps even two of the above but not all three. When that happens, the result tends to be failure.

The job seeker may end up failing on the job because their skills don’t line up well with the work. In short, they just aren’t competent at what they’re trying to do. I’m taller than the average guy, but at a shade below six feet one inch and not terribly well coordinated, I’m in no danger of playing in the National Basketball Association. So even if I really love playing basketball and playing at the highest possible level is important to me, I’m not going to succeed if I were to try out for an NBA team.

Having a strong interest in your career path is equally as important. Someone who has immense talent (competencies) and values the contributions they can make on the basketball court may make an NBA team and perhaps even play well, but they’ll likely be frustrated and quickly disillusioned by their chosen career path if they don’t like the game.

Similarly, it is also important to value your career path. You may be highly competent and interested in playing in the NBA but if you don’t value the contributions that you make to the game or that the game makes to you then you’re going to be bored and quickly looking for the next best thing. You sometimes see this in young athletes that quit their game far too early. Many fans scratch their heads and wonder how someone with so much talent and who performs at such a high level can just walk away from all that fame and money. The reason is they don’t value that fame or money. Other things in life are more important to them and they should be given credit for recognizing that life is too short to spend years working at something that just doesn’t matter.

So when you’re looking at a job opportunity or even a career path, don’t just focus on your skills or what you like or what you care about. Focus on all three. It is often said that three’s a crowd but when you’re talking about competencies, interests, and values, three is a necessity.

Please check out these blog posts that are joining mine in supporting Job Action Day 2010: