What's "HOT?"

Just the other day, a client asked us what are the "hot jobs" in today's labor market (which overall is turning out to be a very weak right now, and for the next few quarters at least). I figured I would share our list with you, and seek your feedback.

If the reader happens to have others that they are having troubles finding out there, please email be (doug@appliedHRstrategies.com) with your thoughts. We are always trying to stay on the cutting edge of what's happening out there in the world of pay and labor market conditions.


Here’s our list:

• Software and web developers, especially with .NET, ASP.net, JavaScript skill sets. Developers and experts in enterprise software and databases remain hot and very hard to find.

• High level technical professionals of most types – the tech market remains strong despite the overall labor market downturn.

• Engineers and related technical professionals – nearly all types.

• Accounting & finance professionals – especially higher level ones with compliance, tax and specialized technical skills.

• Health Care Professionals – continue to be in high demand and will likely remain so for the foreseeable future.

• Sales & Bus Development – for highly experienced professionals, demands remain high (target earnings are more important than base pay here, however).

So, in today's overall weak labor market, would you bump all jobs at the same rate. The quick answer is "no." Stay on top of your critical and hot skill jobs always, and adjust accordingly, regardless of what's happening around them.

If you haven't looked into pay rates for your critical/hot skills jobs for a year or more, it's time to start doing your homework. Don't just assume that because we're in a weak economic and labor market cycle that your just fine in these areas.

2008 Layoffs Worst in Several Years

The above headline probably isn't a big surprise given the spate of economic news out this year, but the pace of the deterioration might be. According to recruiting firm and long-time layoff tracker Challenger, Gray & Christmas, at the current pace of layoffs in 2008, we will exceed last year's total by mid-October of this year.

Through August, layoffs are up 29% year over year. The financial and auto industries are leading the pack in terms of layoffs announce so far this year. For more details, see www.msnbc.msn.com/id/26526521.

So, while the economists argue over whether or not we're in a "officially" in a recession, just look at what's happening and make a reasoned decision yourself:
- The worst housing market in decades
- Layoffs up 29% this year vs. last year
- Regional and U.S. unemployment at a several-year high
- Credit markets in worst shape since the 1980s S&L crisis
- Retail sales the worst in years
- Restaurants and restaurant stocks in the doldrums

Other that that, things are pretty darn good (assuming everyone in your family still has a job, you don't need to sell your house, get a loan, etc.)!

In my earlier posts we've predicted a drop in merit budgets, despite the surveys conducted earlier this year projecting flat to slightly up budgets. We're sticking to our guns on this one - there is no reason that trend is going to be up.

Worker Confidence Down to 2001 Recession Levels

I saw this feed from a news service I subscribe to and figured I'd pass it along.

American workers' confidence in the job market is now as low as it was during the 2001 recession, according to a new national survey conducted by Rutgers University's Center for Workforce Development.

When the survey asked whether this is a bad time to find a quality job, 65% said it was, equaling the level of the 2001 recession, according to the survey.

With unemployment at 5.7%, the highest level since 2004, and with weekly unemployment claims hitting a six-year high earlier this month, workers are worried about everything from their hours, to their total pay and job security. (Washington State's unemployment level also hit 5.7% last month, after a few years of being less than the national average).

The survey found one-third of workers said they often don't have enough money to make ends meet. About one-third of respondents say the amount they owe on credit cards exceeds their retirement savings, a somewhat shocking commentary on the state of some American workers' spending and savings and habits.

Inflation and Wages

In an earlier post I had mentioned "stagflation" and wage "dis-inflation" as the current state of the wage growth in the northwest and in general. A few days ago, the Wall Street Journal published a closely related article on the same general topic, including the following graphic, which displays what's happening better than I could ("A picture is worth a thousand words...").

2008, and likely a year or two ahead will not be a good period for workers making real (after inflation) wage gains.

Studies: Bulk Of Pay Raises To Go to Best Performers

Salary planning for 2009 is in full gear for many employers. Last month, Watson Wyatt Worldwide released salary projections suggesting employers would boost pay an average 3.5% in 2009. Later this month, Hewitt Associates will release its salary increase survey projecting an increase closer to 3.8%. And yesterday, Mercer released its report suggesting a 3.7% increase in 2009. In addition, the recently-released 2008-2009 WorldatWork Salary Budget Survey suggest very similar increases in the 3.7% to 4.0% range, depending on the employee group,

The Watson Wyatt study says that employers will reserve the bulk of their pay raises for higher performers. Low-performing employees won't see their paychecks rise much.

"Companies are trying to use their money more wisely," said Steve Gross, a global practice leader at Mercer LLC. The Mercer study suggests that employers are shifting what little they have to offer in the way of merit raises to their best performers. With inflation rising and business conditions deteriorating at the same time, employers are going to have to be more "discriminating" in how they spend their limited pay increase dollars to retain their top talent.

Another way that employers are rewarding top performers is through greater use of variable incentive pay (simply called "bonuses" at many companies). Both the WorldatWork and Mercer studies show at least 80% or more of companies offer such incentive pay, and their prevalence continues to slowly increase, as does the dollars that are budgeted for such programs.

Inflation and Unemployment Rise

According to a U.S. Labor Department report today, U.S. inflation soared to a 17 year high annual rate in July, up 5.6% from a year earlier, led by gains in food, energy, travel costs and other items. On the positive side though, with energy and commodity prices recently on the retreat and the U.S. dollar strengthening, the report is unlikely to move the Federal Reserve into raising rates anytime soon.

Also this week, the WA State Department of Employment Security reported that the state unemployment rate rose to 5.7% in July (up from 5.5% in June), equaling the overall U.S. rate. Most of the increase is attributable to weakness outside of the Puget Sound region, and to an increase in the number of persons seeking employment. Relative strong spots remain in technology, healthcare, education and aerospace.

This stagflationary mix of rising unemployment, a strained economy and rising inflation, creates a dilemma for employers. Generally speaking, higher inflation tends to lead to rising merit increase budgets, but with the economy at it weakest in years, and business conditions continuing to worsen, it seems unlikely that employers will be more likely to open their wallets further anytime soon.

Stay tuned...

Inflation in Seatte Among Nation's Highest

Despite withering economic performance and declining housing prices, the Seattle area has one of the highest, if not the highest rates of inflation among major metropolitan areas. The Bureau of Labor Statistics (BLS) reports that as of June, Seattle's 5.8% annualized inflation rate was tops among 10 major metro areas it looked at. A different study by Economy.com, utilized BLS and other economic data and reported that Seattle's inflation rate was the highest among the nation's 40 largest metro areas.

Some "blame" goes to our better than average job market performance (3.9% locally, vs. 5.5% for the whole state and 5.7% nationally). Probably the biggest factor though are rental rates that continue to rise, despite the weak housing market (which is still stronger that in most of the rest of the country) and gasoline costs that are also up more here than in most parts of the country.

So, because of our higher cost of living, does that mean that pay increases and wage rates will follow suit and increase more quickly? Probably not. Despite the higher inflation rates, poor and weakening business conditions, along with a weak overall labor market (except for tech, healthcare and a few other pockets) is not a recipe for higher merit budgets.

Let's call it "Seattle Stagflation." High inflation and poor economic growth is a bad combination for everyone; businesses, wage earners, renters, drivers, etc.