WASHINGTON – Companies planning to ramp up hiring this year will have an added luxury: their choice from a flood of applicants, without having to pay a premium for top talent.
Unemployment remains near double digits, and there are nearly five unemployed workers competing for each available job. That is giving employers more confidence, while at the same time enabling them to keep wages low.
The lack of opportunities over the past three years means it's risky for jobseekers to be choosy, particularly for those who have been out of work for more than six months. All that makes for a buyers' market, leaving hiring managers with little incentive to negotiate.
"They don't have to pay higher wages to get who they want," Heidi Shierholz, an economist at the liberal Economic Policy Institute.
Employers advertised 3.25 million jobs in November, the Labor Department said Tuesday. That's 39 percent higher than the number of jobs advertised in July 2009, a month after the recession ended. But it's still far below the 4.4 million openings posted in December 2007, when the downturn began.
Perhaps more important is the number of people competing for those jobs. With 15 million unemployed in November, the ratio was 4.6 unemployed workers for every open job. The ratio reached 6.3 in November 2009, the highest since the department began tracking job openings in December 2000. Still, in a healthy economy, it would fall to between 1.5 and 2, economists say.
Those figures don't factor in under-employed workers or people with jobs who may test the hiring waters.
While openings are up 39 percent from the low point during the recession, monthly hiring has risen only 4 percent to 4.2 million in the same period.
"It is disappointing that 17 months into the recovery, the hires rate still remained at depressed levels," said Henry Mo, an economist at Credit Suisse.
Economists don't agree on the reasons for the gap. Some say the unemployed lack the right skills for the available jobs. Others cite the housing slump, which makes it harder for those out of work to sell their homes and relocate to take a job.
Shierholz said the sheer number of applications from the vast pool of unemployed, and a more demanding attitude from employers could partly explain the delays.
Companies "think they should be able to get perfect, super-qualified workers for very cheap," she said.
Wages and salaries rose only 1.5 percent in the 12 months ending last September, according to the latest government figures. That's barely ahead of the 1.1 percent rise in inflation over the same period.
The good news for jobseekers is that economists expect a lot more openings in the months ahead. Some are projecting more than double the 1.1 million jobs added in 2010.
Ford Motor Co. said Monday that it will add more than 7,000 workers in the next two years, including 750 engineers to work on hybrid and electric vehicles. Discount-store operator Dollar General Corp. said last week that it will open 625 stores and hire more than 6,000 workers in 2011.
And Union Pacific, the nation's largest railroad, plans to hire as many as 4,000 people this year.
The company is seeking diesel mechanics, track workers, conductors and engineers. Most of the new hires will replace workers who are retiring or leaving, but about 1,000 will be new positions.
Already, the company is seeing plenty of interest.
"Many applicants not only meet but exceed the qualifications needed," said Tom Lange, a spokesman. "Overall, it's a very strong applicant pool."
Spirit AeroSystems, an aircraft parts manufacturer, plans to hire about 200 people in the first three months of this year, for its plants in Wichita, Kans. and Tulsa, Okla. The company is ramping up its operations in preparation for stronger orders from Boeing, one of its main customers, according to Ken Evans, a spokesman.
The company is seeing a lot of qualified applicants, Evans said. Other aircraft manufacturers, such as Cessna and Lear Jet, have gone bankrupt in recent years.
"We don't anticipate any problems filling these positions," he said.
The department's report, known as the Job Openings and Labor Turnover survey, or JOLTS, counts the number of jobs advertised on the last business day of the month. While the figures are for November, economists say the report provides an early indication of hiring patterns because it can take up to three months to fill many jobs.
The figures come after the department issued a disappointing employment report Friday stating that employers added only 103,000 jobs in December. Some economists had forecast that twice that number would be added. The unemployment rate fell to 9.4 percent from 9.8 percent, though about half that drop was due to people giving up on job searches.
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