MNI:REALITY CHECK PART 1: Nov Hiring Less Fiery Than Prior Mos

--Hiring Needs/Placements Differ By Industry, Region, Staffing Level

--Nov/Dec Seen As 'Pause,' Most Upbeat About 2018 Prospects

By Vicki Schmelzer

     NEW YORK (MNI) - Job demand and placements were solid again in November but

differed by industry, region, and staffing levels and were generally less fiery

than in prior months, according to recruiters interviewed for Market News

International's latest REALITY CHECK on U.S. employment trends.

     There was widespread agreement that any slowdown in postings and hires in

November and December should not be construed as the start of a new downtrend.

Indeed, recruiters and their clients remained upbeat about 2018 prospects. 

     "November was another strong month," albeit not "quite as strong as

October" and early December is showing modest signs of stalling also, said John

Calabrese, owner of the Mohawk Valley Express Employment Professionals office in

Utica, NY.

     After frenetic hiring earlier in 2017, the mild retreat in placements and

postings is more likely "businesses catching their breath and getting organized

for the new year," he said. 

     Looking ahead, "the feedback from our clients for 2018 is a lot of

optimism. They feel the hiring will continue at a really good pace," at least in

the first half of next year, Calabrese said. 

     Even though U.S. tax reform looks more believable than earlier in the year,

local businesses are not counting on anything just yet. 

     The thinking is that a lower U.S. corporate tax rate could create more

"breathing room for businesses, but I don't think they're adjusting their plans

yet due to any changes," he said. 

     "The good thing is, at least in our region, that there's expansion plans

that have been underway and continuing, so it doesn't temper those at all - they

are continuing and if this happens, I think it could be another boost for

additional expansion," Calabrese said.

     Given the ever-shrinking talent pool, recruiters have been forced to become

creative in their search for candidates and in their selling of the position at

hand. 

     "Companies have more orders and more opportunities than they've had before,

but what the challenge is - is where are you going to put 'em - where are you

going to find 'em?" said Eugene Lupario, chief executive at SVS Group in

Oakland, CA. 

     In areas such as San Francisco, where the cost of living is high, some

firms struggle to attract candidates, and in northern California, the top

contenders for positions are already working, he said. 

     In data released Nov. 17, the State of California put the state

unemployment rate at 4.3% in October (preliminary), but Alameda County, which

includes Oakland and Berkley, had a 3.4% unemployment rate and San Francisco

(both a city and a county) had a 2.7% unemployment rate. 

     With the local unemployment rate "being what it is - you are kind of moving

chess pieces around," Lupario said. 

     In order to attract and retain talent and get business done, employers need

to be "more creative" in their workforce, which could mean allowing employees

more flexible schedules and the ability to work remotely, he said.   

     These firms "are going to have to do something a little bit different if

they're going to increase productivity," Lupario said. 

     SVS Staffing has taken its own advice and in the last six months has

created a whole division to focus solely on vendor management system (VMS)

placements. (A VMS is a platform used by public and private companies for

workforce management.)

     By having everything on one platform, companies pay not only for the

ability to find and hire desirable candidates more quickly and seamlessly, but

also for the platform's objectivity in hiring, which keeps it "vender neutral,"

Lupario said. 

     "We have really started to develop this line of our business and we'll look

to that division as a real opportunity of growth for the company in 2018," he

said. 

     While the VMS division is going gangbusters, other divisions, especially

manufacturing and logistics, have seen more of the typical sluggishness usually

seen at year-end,

     "We just have to slog through the next four weeks," Lupario said. 

     On November postings and placements, "overall, we feel it's more of the

same and all good," said Deb Gray, owner of an Express franchise in the

Pittsburgh area. 

     In terms of industries, demand for hotel workers has calmed down, which is

typical into year end, but retail hiring needs have been higher, she said.

     Her office's introduction of a team devoted solely to 'skilled trades' has

been a great success, with "multiple clients fighting" over candidates, as both

sides become more aware of top-talent's worth. 

     One new phenomenon has been that prospective candidates, at the "mid to

slightly upper level," are increasingly more willing to speak with recruiters,

she said. 

     "We're reaching a more educated candidate. They're just savvy about what

they want and where they want to go," Gray said.

     These higher-level candidates are "responding quicker right now and

especially, if they are in a job," she said. 

     The same goes for employers who don't want to lose out on hiring a plum

candidate, even if they don't have an available position currently. 

     "Most will return calls or when we call them with a candidate that we think

might be unique. And even though we may not have an order from them, if we call

proactively saying, 'we came across a candidate like those that you've hired

from us before,' they want to hear about those candidates," said Reid Bates,

owner of Express offices in Olympia, Centralia, and Aberdeen, Washington.

     November and early December job postings and placements have been overall

"good," with a few speed bumps, he said. 

     Trying to fill an order, Express recruited candidates to fill warehouse

positions. When the client overestimated seasonal worker need, the jobseekers

were embraced by auto sector firms, which had an unexpected demand for workers. 

     "So, we have moved people around from what had been warehouse work for the

holidays to automotive processing," he said. 

     On last month's employment trends, Preet Kuar, Executive Recruiter and

Business Development Manager at Pacific Staffing in Sacramento, CA, told MNI,

"November was very steady for us."  

     So far in December, companies continue to interview candidates, with

activity "going strong," and there is no "sign of a major slowdown as expected"

for the holiday season, she said. 

     "I have a feeling that we're going to have a very good, solid first

quarter," Kuar said of 2018 prospects.

     One new trend in the Sacramento area, "we are starting to see regional

offices pop up," she noted.

     Firms, with head offices in places like Seattle, LA and San Francisco, have

been expanding rather than have a growing number of employees work remotely. 

     So, instead of having workers "siloed and telecommuting in one day a week,

they would rather have a regional office," Kuar explained.

     Official U.S. non-farm payroll data for November will be released Friday

Dec. 8 at 8:30 a.m. ET. 

     MNI's median estimate looks for a rise of 200,000 for headline non-farm

payrolls in November, with a range of +165,000 to +250,000. The unemployment

rate is expected to hold steady at 4.1% and average hourly earnings are seen

rising 0.3%.

     On payrolls, "there is a tendency to miss to the low side for November

payrolls, so an upside surprise is possible," said Kevin Kastner, Director of

U.S. Economic Research at MNI.

     In the past 10 years of forecasts for November payrolls, "there were three

overestimates with an average of 115,330 and seven underestimates averaging

41,000, so there is a greater chance of miss to the low side," he said. 

     Editor's Note: Reality Check stories report on topics of interest in the

U.S. economy and are intended to complement and anticipate economic data. If you

are currently an MNI subscriber and want to be on the Reality Check

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--MNI New York Bureau; tel: +1 212-669-6438; email: vicki.schmelzer@marketnews.com

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