Feeds

US companies look to add jobs in 2010

Don't call it a comeback

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

The US economy stopped haemorrhaging jobs in November. The unemployment rate actually went down a smidgen and could do it again when the Department of Labor's Bureau of Labor Statistics puts out its jobs report for December later this week.

Let's start generally and work our way into the IT part of the jobs market. If you look at the latest quarterly economic survey from the Business Roundtable, which is comprised of 161 of America's largest companies (with a combined workforce of 12 million and $6 trillion in aggregate revenues), the recovery is under way among those large companies. The expectation is that capital spending will more or less follow revenues up in 2010, but it may take some time before big companies feel comfortable enough to actually hire more employees.

"The economy is in the throes of a long transition back to health; recovery will be long, extending beyond 2010," said Ivan Seidenberg, who is the current chairman of the Business Roundtable and who is also chairman and chief executive officer of telco giant Verizon. "The outlook of our CEOs reflects that reality: We see noticeable gains in sales and capital spending, but employment growth continues to lag."

According to the fourth quarter 2009 CEO Economic Outlook Survey, which you can see here and which is based on responses from 111 member companies, some 68 per cent of the CEOs polled among the peer group said they expect their revenues to increase in the next six months, with 15 per cent saying they would be flat and 17 per cent expecting a decrease. This is a lot better than the Q3 survey results, when only 51 per cent of members polled said they expected to see sales bump up in the next six months, and 26 expected a decline.

With revenue expectations on the rise, capital equipment spending is projected to rise among these large companies. In the Q4 survey, 40 per cent of those polled said they would boost their capital spending in the next six months - only 21 per cent had said this three months earlier. 44 per cent said there would be no change in spending and 16 per cent expected a decline.

In the September survey, 35 per cent of CEOs said they would be cutting spending in the following six-month period. That is a pretty big swing, even if the largest portion of the survey respondents (44 per cent) expect to hold capital investment steady.

As noted above, these CEOs may be getting more bullish about the economy - averaged across all CEO responses, the group expects real GDP in the United States will rise by 1.9 per cent in 2010 - but they are only slowly warming up to adding more employees. However, the CEOs of our country's largest companies seem less inclined to cut jobs, which is progress.

In the fourth quarter, only 31 per cent of the CEOs polled said they would be cutting jobs in the next six months, down from 40 per cent in the third quarter. 19 per cent said they would be adding jobs, compared to only 13 per cent when they were asked that question in Q3. About half of the companies expect no change in their payrolls looking ahead six months from December, up a smidgen from Q3.

The Business Roundtable does some black magic with stats and cooks up a CEO Economic Outlook Index, which ranges from -50 to 150. It takes into account projections for revenues, capital spending and employment levels among the peers. In the fourth quarter of 2008, the index stood at 16.5, and as the economic meltdown heated up in the first quarter, it went negative to -5. (An index of 50 or lower means we are in an economic contraction, and a negative number means a serious contraction.)

In Q2, the index recovered a bit to 18.5 and in Q3 it climbed to 44.9 - still a contraction, but a much less severe one. The good news is that in Q4, the CEO Economic Outlook index sat at 71.5, which means the economy is growing again as far as these 111 CEOs can see. By the way, as you can see from the Q1 report, the last time the index was under 50 was in the first quarter of 2003, when the economy was coming out of recession and the IT sector was still in recession.

Over at jobs site CareerBuilder, which has a much broader view of the U.S. economy than the Business Roundtable, the company has just finished up a survey of 2,720 human resources managers of companies of all sizes and industries in the United States. Caution is the word, as it is among the big boys.

"There have been many signs over the past few months that point to the healing of the U.S. economy, especially the continued decrease in the number of jobs lost per month, a trend that will hopefully carry over into the new year," explained Matt Ferguson, chief executive officer at CareerBuilder, in a statement accompanying its 2010 job forecast report. "Although 20 per cent of employers plan to add headcount in 2010, up from 14 per cent last year, they still remain cautious in regards to their hiring. We're headed in the right direction, but should not expect to see actual job growth until at least Q2 2010."

According to the CareerBuilder 2010 job forecast, which you can see here, some 9 per cent of those surveyed said they plan to cut full-time employee headcount in 2010, which is a lot better than the 16 per cent who said they would this time last year. However, 61 per cent of the companies polled said they expect to keep their payrolls the same, 20 per cent expect increases, and 10 per cent say they are not sure. This is not exactly what would be called a jobmore (as opposed to jobless) recovery in the making.

Part-time work is also only going to be a little easier to come by in 2010. Some 11 per cent of those polled expect to increase their part-time workforce (up from 9 per cent in the year-ago survey). 8 per cent expect to still make cuts in the part-time payroll, with 69 per cent holding steady and the remaining 13 per cent unsure what they will do. (There's some rounding in those numbers.)

The good news for IT workers is that among the IT companies polled, 32 per cent of those contacted by pollster Harris Interactive on behalf of CareerBuilder said they would be adding full-time employees - a level that was much higher than other industries, including healthcare. Across all industries, when asked where in their organizations they would be adding people, about a third said they would be adding technology experts. (Not all of these are IT people, of course, but a lot of them are.)

About 23 per cent of the HR managers surveyed said they would be adding sales people, 28 per cent said they needed customer service reps, 18 per cent needed researchers and developers, 17 per cent wanted to add to business development teams, 15 per cent needed people in accounting and finance, and 14 per cent needed marketeers.

In general, those talking to CareerBuilder said they were interested in shedding their lowest-performing employees and in rehiring whatever good employees they were forced into letting go by the economic meltdown. Some are even planning on offering increased compensation or other benefits to key employees who they don't want to lose to retirement. ®

Boost IT visibility and business value

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.