Is the job market better nowadays? It's getting there. Still, it's tough for job hunters as well as for small business that want to grow.
In this week's podcast:
- Jenny Grasz, vice president for CareerBuilder, tells Bankrate's Mark Hamrick what the hottest job fields are, and describes how to use (and not use) social media in the employment search.
- Sheyna Steiner, who writes for Bankrate about saving and investing, wonders whether your wallet will become a quaint relic of a bygone time.
- William Dunkelberg, chief economist for the National Federation of Independent Business, tells Hamrick that small-business owners feel a lot of uncertainty, making them wary of hiring.
- And Claes Bell, Bankrate's banking reporter, urges individual investors to take a look at the stock market.
New job-search tips. Hint: Avoid boozy Facebook posts.
The job market from two perspectives: where and how to look for work and what is keeping employers from hiring more workers.
LISTEN TO AUDIO
Mark Hamrick: From Bankrate.com this is "Your Money This Week." I'm Mark Hamrick reporting from Washington. The lack of more substantial improvement in the job market continues to be a stumbling block for the U.S. economy. It's not good for the unemployed or people who have jobs who suffer through largely stagnant wages. This week we fight back as our guests provide some great job search tips and some insightful observations on what's holding employers back. Bankrate's Claes Bell laments that average investors haven't been taking advantage of the stock market's recovery and our Sheyna Steiner has a prediction on something close to our money that's about to be obsolete. We have all of that and more for you on "Your Money This Week."
In our first segment, job searches and what are we missing? Whether a part of the workforce for decades, recently laid off or ready to start looking for work, it seems there's a great disconnect between the workforce and prospective workers. There's the skills mismatch and even a fair number of people who aren't ready for prime time when it comes to drawing a paycheck. And don't get us started on the folks who post shots holding beer cans or cocktails on social media easily within view of human resource departments. Our guest is Jennifer Grasz, a vice president for CareerBuilder. I asked her about where the job market stands right now.
Jennifer Grasz: Well, I think we can see that the market is getting better. There is light at the end of the tunnel. When you look at job listings on CareerBuilder, they've actually been up in double digits year over year each month. And we're not just seeing large companies in big cities hiring in some select industries or functions. We're seeing jobs added across industries, across company sizes and across geographies. It's very different than what you would have seen a few years ago, so it's headed in the right direction. At the same time I think employers are still cautious. When you look at this recovery it's been all about gradual improvement rather than leaps and bounds in hiring and I think you're going to see more of that going forward until the economy picks up.
Mark Hamrick: So as you know, as this recovery has continued, we've seen a real decline in layoffs and job cuts and the big question mark has been whether we see a push in hiring and it's your sense that indeed we are seeing that now.
Jennifer Grasz: We are seeing that and not just only activity on our site. CareerBuilder also ran a nationwide survey of more than 2,000 employers across industries and company sizes. We did this with Harris Interactive. What we found was 44 percent of employers plan to hire full-time permanent employees in the back half of the year. And that's on par with last year so I think you're seeing permanent hiring will remain steady. Thirty-one percent plan to hire temporary or contract workers. That's up from 21 percent last year, so a 10 percentage point increase for temporary hiring over 2012.
And I think that really tells us two things. One, companies are feeling more confident and they're adding more employees to keep pace with market demand. And I think two, we also see that companies want to maintain some flexibility in their workforce, especially in the wake of a recession that hit many employers and many economies very hard. So they're not rushing into a full-scale expansion of head count in light of those economics headwinds that still linger today, but I think the overall pace of hiring is getting better.
Mark Hamrick: A question that seems to be asked a lot, particularly over the last month or so about the quality of the jobs being added, you referenced there that some of these increases are reflected in part-time hires and the quality also might be measured by level of pay, of course. As we know the wage has generally been stagnant through this recovery. Anything positive to report on either of those two fronts there do you think?
Jennifer Grasz: Yeah, I mean I think we see a full range of positions. You see those entry-level roles that are going to be at the lower end of the scale and you see higher-paying jobs, whether that's in the permanent space or in the temporary space. When we look at the hottest areas for hiring today, we're looking at areas like information technology. Companies want to bring those innovations to market very quickly; they want to capitalize on mobile and social technologies. They want to leverage big data and so a lot of hiring happening in that sector. Health care, we've got an aging population; we've got more people that have access to medical benefits so all kinds of clinical and nonclinical positions opening up there.
Then you also see engineering, the energy sector, a lot of jobs there. So these are very skilled positions and I think from a functional standpoint sales is a hot area for hiring as companies look for those revenue generators. So I think you're seeing a mix of some of those lower-skill positions as well as those higher-skill jobs. And what we're seeing, too, which seems counterintuitive in a market where you've got so many people that are out of work today but there's a significant number of employers who are saying that they can't find skilled workers to fill their open positions.
Mark Hamrick: Yeah, we've been certainly hearing that for some time now. Let me delve a little closer then on some of these questions. For advice to people who are currently employed and then those that are perhaps unemployed or perhaps they're just now entering the workforce, would you have advice for people in either of those groups?
Jennifer Grasz: Yeah, I think you really want to do your homework on those industries and occupations that are not only growing today but are projected to expand over the next 10 years. And there are different sources for that. Economic Modeling Specialists has a great site that provides detailed labor market information around top sectors in specific metros and they provide great occupational information. We do a lot of job market trend reports in conjunction with them. The Bureau of Labor Statistics has lots of information though it can be a little bit difficult to navigate. But what you want to do is look at those areas that you've seen increases in in recent years and you're seeing indicators that those are going to grow going forward.
Those are the opportunities that you want to go after. When we look at some of the other functions that -- in addition to the ones that I had mentioned -- but some of the other functions that are really hot today are jobs tied to mobile technology, cloud technology, social media, big data, financial regulation, health informatics, cybersecurity, a lot of technical jobs in there, too. But you're seeing that's where there's a heavy emphasis and that's where those growth opportunities lie.
Mark Hamrick: And as the Internet and some of these technologies mature, obviously the process of either looking for work or firms looking for workers, those processes have been changing. And obviously you want to be in the right place for that there at CareerBuilder. Another site that seems to be doing well in that space or in a space is LinkedIn. What advice would you have for people either going out and trying to bring information to themselves to become a potential applicant or that they want to just represent themselves well online so that a potential employer might view their work more positively?
Jennifer Grasz: Yeah, it's interesting because when you look at how people search for jobs today, most employed job seekers will use up to 15 resources to find jobs and unemployed workers will use even more of that. And so there's a variety of areas that people look for jobs as well as where they can market themselves. So certainly posting your resume on a job board, applying for jobs on a job board are great ways to get in the door. When you're looking at the social space you want to make sure that your profile is something that you would be comfortable with a potential boss seeing. And you also want to use that as a way to convey your skills and experience, convey accolades, kudos that you may have had from professional experiences in the past and specific ways you have contributed to an organization. It's really important that you manage your personal brand online effectively.
Mark Hamrick: And that translates to and it sounds so basic but particularly frankly for younger people to not necessarily be tweeting pictures of yourself lording over a beer keg, right?
Jennifer Grasz: Yeah, and we've done a lot of studies around this. There are a significant number of employers that will research job candidates via social media. They'll look for information about that candidate online and we do hear there are a good number of them that had decided not to hire a candidate based on the information that they had found. So whether that was an inappropriate picture or maybe they were bad-mouthing a previous employer, you've got to make sure that the information that you're sharing online is something that you would be OK with a potential employer seeing. And if you're not comfortable with that, you shouldn't be posting it.
Mark Hamrick: And that really extends to anywhere that is let's say available digitally, correct?
Jennifer Grasz: That's right. Once it's out there it's out there and you want to make sure that the information that's being shared about you is always going to put you in a positive light whether it's something that's personal or professional.
Mark Hamrick: That's great advice from the macro to the micro, Jennifer Grasz, thanks so much for your time.
Jennifer Grasz: Absolutely, thanks for having me.
Mark Hamrick: Jennifer Grasz, vice president for CareerBuilder. She spoke with us from her office in Chicago. From the risks of social media to the march of time, Bankrate's Sheyna Steiner sees the inevitability of technology affecting our pocketbooks quite literally.
Sheyna Steiner: Like the pocket watch or stage coach, wallets are about to become a quaint relic of an older time. It may not be today, it may not be tomorrow but one day soon mobile wallets will take over. Hyperbole aside, mobile wallets could still fail to take off. Consumers still have concerns about privacy and security, though they may be overblown and many merchants simply have no way of accepting payment from mobile wallets just yet. But the idea does offer some benefits over the old brick in the back pocket.
For instance, loyalty and reward cards could be stored in one easy place and mobile wallets make using coupons easier. They can receive electronic coupons and automatically transmit the information to the merchant. Plus, using a mobile wallet lets customers order and pay electronically, which could let them skip standing in line in some stores. For "Your Money This Week," I'm Sheyna Steiner.
Mark Hamrick: Next up we continue our look at the job market but from a different seat, the employer's perspective. William Dunkelberg wears a couple of different hats in this regard. First he's chief economist for the National Federation of Independent Business, a trade group representing small business. He's also a professor of economics at Temple University in Philadelphia. Dunkelberg notes there's still work to do in getting people back to work.
William Dunkelberg: Well, if you look at total employment today, it is a couple of million below where we were at the beginning of 2008, which means that we have a long way to go just to get back to where we were. And of course in the meantime we've added 3 million new people to the economy every year in terms of population growth. So a lot of jobs are going unanswered, that is a lot of people want jobs and they can't find them. So that explains our unemployment rate and as many point out the unemployment rate would probably be a lot higher if we looked at the number of people who actually left the labor force because they gave up looking for a job. So overall the job picture is pretty weak. The thing that would improve it, of course, is a better outlook for the future and apparently small-business owners still don't have a very positive view about where we'll be in the year.
Mark Hamrick: And there are any number of different reasons that have been assigned to that concern. We hear about regulation as being a common complaint and under that heading goes Obamacare and the lack of transparency as it relates to anything that let's say the administration and Congress might possibly be able to accomplish together as unlikely as that seems. Is there anything that we're missing there?
William Dunkelberg: Well, we do a very in-depth study every four years and last year was one of those fourth-year studies where we asked the owners to rank 75 different problems from worst to least worst and of course no surprise rising health care costs is No. 1. It's been there for 25 years. If you go back before 25 years of course it was into the Reagan administration invoker and credit availability and costs. No. 2 was uncertainty about the economy, that is it's very hard to figure out where the economy is going to go. No. 3 was energy costs and they of course are a lot higher than they were a couple of years ago. No. 4 was uncertainty about economic policy and No. 5 was the cost of useless regulations and red tape.
Nos. 6, 7 and 8 all related to the federal tax code, frequent changes taking away the capital that they need to grow the business and complexity, the cost of doing the tax job. So those were the really top concerns and if those are the issues a year ago, nothing has really happened to change those a year later. And so as we ask our owners going forward what they see in the economy, very few think that the economy will be better six months from now than it is today. And in that kind of a context, they're not going to be hiring anybody.
Mark Hamrick: What advice would you have for workers these days?
William Dunkelberg: Well, of course you have to keep looking and keep trying. That is we count people as unemployed only if they say they want a job in the survey and have looked for a job. So you can't kind of be watching the TV and waiting for jobs to come. It takes a good effort to get out there and get it done. Obviously you have to worry about the skills match and so on but we were surprised to find that a lot of owners said that the main problem that they had hiring people, especially young people, was appearance, attitude, ability to work with other people, get to work on time. Of course drugs -- about 5 percent said drug issues were a problem and another 5 percent said immigration status was an issue. But there are a lot of things that these individuals could do that would make them more employable that wouldn't require going back to school or getting more training and of course that would be also a good idea if you're in a field where things are changing rapidly. You might have to retool yourself.
Mark Hamrick: I was just thinking that was a wonderful opportunity to take a broadside at younger generations but I guess we'll avoid that opportunity for the moment. But along those lines, I was just thinking when you enumerated those concerns, I wonder how much of an issue the tremendous amount of innovation that is occurring in the economy now that ultimately is a positive presents let's say a problem for existing businesses who either are not agile enough yet to, let's say, pivot or can't frankly anticipate what the technological landscape might be down the road. Because we do know that there are any number of businesses out there large and small that are seizing upon let's say technological or strategic opportunities that present a tremendous challenge for existing businesses.
William Dunkelberg: Well there are certainly some sectors of the economy where technology is very important and using the latest technology becomes a real important issue if you want to succeed, especially communication and of course the social media, how to use that to find customers and those kinds of things. But for most small businesses that's not really an issue. I mean technology in the barber shop I don't think is going to change at any time in the near future, or beauty salons. Maybe a little bit. But the real issue with unemployment I think is still primarily cyclical. What happened to us is housing started to drop from 2.2 million annual rate in '06 all the way to 500,000 and we're back to around 900,000 now but that's a very labor-intensive business.
It is improving. We will continue to improve to about 1.5 million starts or so, which is what we need demographically longer term. But a lot of the unemployment that we see really came from there. When I go to Florida and talk to people who pick you up at the airport, the drivers, virtually all of them were in the construction business in Florida and are now driving limos and of course many others found other jobs. So that's really one of the difficulties that we have was the sharp decline in housing. And if we could get back to a million, 5 million, 6 (million) starts, which we will, that will certainly help on the employment side.
Mark Hamrick: How much concern do you have that the housing market's recovery may be damaged by an increase in interest rates?
William Dunkelberg: Well, certainly if mortgage rates go up at the margin a few people might be disqualified that would otherwise have qualified for a mortgage but I think for the most part that's not really the issue. We have a lot of people who would like to sell their house and move and take a job in North Dakota. Well, okay, maybe not North Dakota but anyway, you can't move if you're underwater in your house and you can't sell it. So if we have a million of those why there's a million people who are locked up. And labor mobility is one of the key strengths of the U.S. economy so that would be one issue that we had.
And of course the other is just the economy has been weak partly because of deleveraging. Consumer spending has not been very responsive and so across the board but especially in services, which are labor-intensive demand has not grown very quickly. And the real motivating factor for a business owner to hire somebody is the customer. More customers mean you have to hire somebody to take care of things and that's really what we need to see. Consumers are still not very optimistic about the future. We saw consumer sentiment decline again on the Michigan survey and historically the numbers we see are pretty weak. So we really need to see an improvement in confidence. Only 11 percent of those consumers think government policy is good and that's not a very strong number. So we don't have confidence that we're going to get out of trouble in the future therefore we're careful now. We don't spend with any exuberance.
Mark Hamrick: A lot of the echoes of the Great Recession continuing to linger. Bill Dunkelberg, thanks so much for your time. Great to catch up with you again.
William Dunkelberg: Always a pleasure. Thanks a lot.
Mark Hamrick: Bill Dunkelberg, chief economist with the National Federation of Independent Business. He spoke with us from his home in the Philadelphia area. Much has been made of the fact the stock market has been on a pretty good run this summer with the key averages chalking up new record highs. But is this a bit like a great party that has only a few people attending? Bankrate's Claes Bell takes a look at the possible intersection of hockey and investing strategy.
Claes Bell: Wayne Gretzky once said, "You miss 100 percent of the shots you don't take." If that's true then many Americans are shooting close to zero these days when it comes to investing. Week-to-week fluctuations aside, American stocks have had an incredible ride over the last few years. Since the Dow Jones fell to less than 7,000 in 2009, the index has more than doubled in value, setting all-time highs several times this year. The big money being made in the market has probably been great for Ferrari dealers and plastic surgeons but it hasn't done much for the average Joe, mostly because they're sick of taking shots on an often fickle and sometimes even brutal stock market.
Back in 2007 when the market last peaked and began a steep downward slide, 65 percent of Americans said they owned stocks according to Gallup. Six years later that number had dropped to just 52 percent. Folks, there's no denying that investing is hard but in a world where interest rates are almost invisible, if you're trying to save for retirement or your children's education using cash or other supposedly safe assets, you're going to have a hard time winning the game. Instead of accepting defeat, it might be smart to sit down with a fee-only financial planner and put together a balanced portfolio for a late-game comeback, Gretzky style.
Mark Hamrick: Finally our look at this week in business history. On Sept. 4, 1957, began one of the biggest flops in American business history. Ford introduced with great fanfare a new car model line dubbed the Edsel. No, it wasn't just a single model; it was a line of cars and a new division in the company. Unfortunately for Ford, consumers didn't bite and Ford lost millions of dollars. By 1960, it was all over. The name Edsel was taken from the son of company founder Henry Ford, a name which is now infamous in the annals of marketing.
You've been listening to "Your Money This Week." Our thanks to guests Bill Dunkelberg and Jennifer Grasz. If you enjoyed this podcast, please rate and subscribe to our program. We're hoping you can help us to get the word out. For more on this and other personal finance issues, please visit Bankrate.com and you can follow us on Twitter @Bankrate. Our editor-in-chief is Julie Bandy; managing editor, Katie Doyle. Assistant managing editor Holden Lewis and thanks to producer Lucas Wysocki for his work as always in the studio. I'm Mark Hamrick. From all of us here at Bankrate, here's hoping you have a great week.