July, 2007

Ah! Summer! Warm weather. Lazy moods.

In the northeast where I live and work from, the job market has remained strong BUT the placement of July 4th was confusing for many.

Do you take off before the 4th? After the 4th? Kiss off the entire week?

Firms have remained in hiring mode and the popular press is starting to catch up with what I've been writing about for a while--labor shortages in the US for skilled labor.

According to the US BLS, the US economy reported 132000 new jobs in June, 2007. ADP, which I consider far more reliable, reported 150000 new jobs created (It's more reliable because it actually counts new jobs at companies they provide payroll services to). The April and may numbers were revised higher by the BLS (to 190000 for May and 122000 in April).

At 4.5% unemployment is extremely low (if you have a college degree, unemployment is under 2%).

MSNBC offers the analysis that with the economy continuing to grow, there are "inflation worries" caused by firms that may face the new realities of the labor market by raising salaries--something I was telling you to expect in the second half of this year since the end of last year.

Our firm has been filling positions of all sorts yet the refrain from my colleagues is pretty similar--offers are being turned down because people now have choices where as a few years ago, they had one offer and needed to take it.

With rare exceptions, salaries are pushing higher (a colleague told me about a salary lateral that was offered to someone making $110000; she told the client to inceresae the offer by $10000 because that is where the appplicant's other offers were at).

MSNBC writes, "After rapid gains in productivity of the American workforce during the 1990s, for example, a slowdown in those gains could raise labor cost pressure. On the other hand, globalization and the outsourcing of production to cheaper labor markets continue to cut labor costs for some employers."

Only one problem--outsourcing employers are starting to find their labor costs rising, too so some are starting to recruit in the USA for positions abroad (There are two stories on this blog about that trend).

So, if you are an employer, this is the time you start planning for your 2008 budget. Start to look at increasing your labor costs.

Why?

Otherwise, you will not attract the kind of talent you want to accomplish your strategic objectives and, secondly, because your employees will start joining your competitors to help them meet their objectives.

Jeff Altman
The Big Game Hunter
Concepts in Staffing
thebiggamehunter@cisny.com

© 2007 all rights reserved.

Jeff Altman, The Big Game Hunter, is Managing Director with Concepts in Staffing, a New York search firm, He has successfully assisted many corporations identify management leaders and staff in many disciplines since 1971. He is a certified leader of the ManKind Project, a not for profit organization that assists men with life issues, and a practicing psychotherapist.

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