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Repeats Story Initially Transmitted at 15:48 GMT Jan 4/10:48 EST Jan 4
--Tax Reform Effects Downplayed
--Recruiters Hopeful About 2018 Prospects
By Vicki Schmelzer
     NEW YORK (MNI) - U.S. hiring remained robust in December, with little sign
of the usual end-of-year slowdown, according to recruiters interviewed for
Market News International's latest REALITY CHECK on U.S. employment trends ahead
of Friday's monthly employment report
--DECEMBER AS BUSY AS NOVEMBER
     "We had a great December, everything was still just as busy as it was the
previous month - there was not really a lot of fall-off," said Daniel Morgan,
owner of two Express Employment Professionals franchises in the Birmingham, AL
area.
     "Across the board," at all staffing levels, "people are expanding," he
said. 
     On the West Coast, "last year, December and then coming into January, it
was a bit slow," with election uncertainty stalling hiring. "This year, it
hasn't been slow," said Preet Kuar, Executive Recruiter and Business Development
Manager at Pacific Staffing in Sacramento, CA.
     In the last month, Kuar's clients have been quicker to hire workers and
have become increasingly competitive in their hiring, she said. 
     Contract-to-hire workers, who in the past needed to work for three to four
months before being hired directly, might now only work a month before being
offered a permanent position. 
     "There are a lot of companies converting and paying a fee to get the
employees on their payroll because they're afraid to lose them," Kuar said.
     For Anne Woods, franchise owner at the Express office in Covina/Santa Fe
Springs, CA, December was "good, in a weird kind of way," with businesses
"staying busier longer." But as the holidays neared, job candidates became "less
interested in talking to you."
     Now, at the start of 2018, "we're back open for business today and we're
slammed, we're absolutely slammed, " she said.
--TAX REFORM DOWNPLAYED
     Companies were in hiring mode in December because of the strength of the
U.S. economy and not because of expectations of a big boost from tax reform,
recruiters told MNI. 
     In the Sacramento area, "employers are feeling good" about the prospects of
paying lower taxes going forward, "but it is not as major as they were hoping
for," said Pacific Staffing's Kuar. 
     And now being unable to deduct local property taxes larger than $10,000 on
the federal return makes California real estate look less attractive to
candidates moving to the area. 
     "Employers know that because there's such talent shortage, if we don't have
affordable housing and proper tax breaks for employees, we are not going to be
able to sustain good business here," Kuar said. 
     U.S. hiring is up mainly because of solid U.S. growth, although the
corporate tax cuts are "seen as a positive," said Express's Morgan. 
     "I think it's gotten to the point where they think they will lose business
if they don't have the extra person. Now, it's easier to pay for that person
because if not, I am going to lose the business anyway, he said. 
     Express's Woods maintained that companies would likely use tax savings to
pay down debt before using remaining monies for new hires, if they hire at all
as a result of tax reform. 
     "The market is incredibly efficient. And companies who are trying to buy
market share, and there's always somebody trying to buy market share, will use
that extra cash flow to lower their prices," she said. 
     "Will it help in the long run? Yes, sure, maybe. But will they hire more? I
don't see that happening at all," Woods said.
--2018 PROSPECTS HOPEFUL
     On 2018 prospects, "it's hard to say for the whole year, but from my
conversations with my clients, it seems like it's still going to be strong,"
said Pacific Staffing's Kuar. 
     "It's still going to be a candidates' job market. A lot of companies are
running lean," she said.
     In the past three years, first quarter hiring has been sluggish in the
Birmingham area and Express's Morgan was watching to see if Q1 2018 will be
different.
     "If our sales, our business, starts to slide off, then we will know really
that there is no change from this year to next year. It might still be more, but
there's still a drop off," he said. 
     "Whereas maybe, because of the tax cuts, people go like 'let's go ahead and
get this person in here - I don't need to wait until March when business picks
up even more. I need to go ahead and get them in here and get them trained so
when March comes, they are ready to go,'" Morgan said.  
     Express's Woods observed that "all indicators are" that job postings and
placements will remain "robust" in the first half of this year, barring "some
big event."
     But, what will happen in the second half of 2018 "remains to be seen,", she
said. 
     "A seasoned person is pragmatically going to say - you just don't have
recovery forever," Woods said.
     Clients do not know what might cause the U.S. economy to slow down again,
only that the current expansion is overstretched and likely to correct at some
point in the not so distant future. 
     "We are due for a softening - not a great recession - but a softening,"
Woods 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
email-distribution list, contact sales@marketnews.com
--MNI New York Bureau; tel: +1 212-669-6438; email: vicki.schmelzer@marketnews.com