As the economy recovers, are businesses hiring?

Job losses are slowing. Corporate earnings have been rising. Signs of real economic recovery are finally beginning to show. But what about hiring? If out-of-work employees can’t return to the workforce, they can’t return to their normal patterns of consumption. Hence, any economic recovery is hampered by high unemployment.

Many industries have experienced heavy layoffs

Although layoffs have slowed in most industries, we still have not seen much recovery in hiring. A recent survey of over 2,300 HR professionals found that many industries have endured extremely deep staffing cuts¹:

Percent of Companies who have Reduced Staff by 10-50%
Manufacturing – 54%
Construction – 49%
Services – 37%
High Tech – 37%
Finance -26%

Only 42% of HR professionals felt their company was experiencing a significant, or even mild, recovery compared to other companies in the recession. Is that enough to stimulate hiring decisions?

How Chief Financial Officers view the recovery

When asked to predict near term business conditions, CFOs believe that corporate earnings will rise sharply in 2010 – up as much as 12 to 14 percent. They also plan to increase capital spending by 9%, indicating that for now at least, we could see a robust recovery in business spending². But the outlook of CFOs is still decidedly cautious; they believe full-time employment in the U.S. will only increase by 0.2%, with a 0.5% improvement in temporary hiring. Further, U.S. CFOs believe that employment will not return to pre-recession levels in their organizations until 2012 or later.

Signs of hiring

Nevertheless, workers today are starting to find some opportunities in the job market. According to the SHRM survey, 62% of HR professionals surveyed were starting to hire at least some full time positions. Most hiring is taking place in a few key industries, including: the federal government, healthcare, high tech, and finance.

The good news for corporate recruiters? With high unemployment levels, HR professionals in every industry report that it is easy to find qualified candidates. If your firm is in a position to hire this year, you may have a once in a lifetime opportunity to build a team of highly qualified overachievers!