Articles
8 February 2012

On the Job

Employers to start hiring soon?

by Sarah Ryther Francom

08 February 2012—

Utah’s workforce has been hit hard by the economic storm. According to the Department of Workforce Services (DWS), Utah lost approximately 34,700 jobs since December 2008. And the state’s current unemployment rate is 6.7 percent. Ouch. But don’t panic—the state’s unemployment picture isn’t as dreary as the numbers suggest. 

 

A Lag Indicator

Kristen Cox, executive director of DWS, explains that though Utah’s unemployment numbers are steadily increasing, an increase in the unemployment rate is usually a sign the economy is beginning to rebound. “When the economy is bad, people stop looking for a job,” Cox says. “When the economy starts improving, those people reenter the labor market, so the unemployment number is a lag indicator—it’s the last to respond.” The fact that the unemployment rate has reached 6.7 percent indicates that the unemployed are hitting the pavement in search for their next position. 

According to DWS, the number you should really be paying attention to is the state’s employment change rate, which is compiled by the United States Bureau of Labor Statistics (BLS). According BLS’ most recent report, Utah’s employment rate was -2.8 percent during December 2009. In November 2009, the state’s employment change rate was -3.1 percent. As the number gets closer to zero, Utah’s employment situation is improving.  

“I put much more stock in the change in the employment levels than I do with the unemployment rate,” says Mark Knold, DWS senior economist. “For example, you happen to lose your job. That job would show up in the employment [rate], but if you don’t look for another job, you aren’t counted as unemployed … we hope to reach zero in the middle of 2010.”

Cox agrees that the -2.8 percent rate is a sign that Utah’s employment losses are moderating. “Job growth and job con-traction—those are getting better,” she says. 

 

From Temps to Employees

Another indicator that Utah’s employment scene is improving is the number of temporary workers employers are bringing on board to supplement their employment needs. 

“In bad times, employers don’t want to hire full-time workers because of the costs and benefits that they require,” says Cox. “If employers have a stronger business cycle, they’ll bring on temporary workers [before hiring full-time workers].”  

Cox says the third quarter of 2009 didn’t show a large increase in temporary workers. The fourth quarter of 2009 will likely show a significant increase, but much of the increase is due to seasonal holiday workers. 

As for 2010, a rise in temporary workers is expected, but not for long—employers are predicted to start hiring full-time permanent workers mid-2010. Cox explains that as businesses experience stronger cycles, employers gain confidence and begin filling full-time, permanent positions. She says this is especially true for many of Utah’s industries that require specialized employees.

“As businesses gain more confidence [in the economy], they’ll need to bring on experts,” she says. “As Utah becomes really focused on high growth clusters, you can’t keep around a temporary workforce—companies need permanent workers with expertise.” 

 

The Recession Generation

Workers who will likely be impacted most by today’s employment woes have been referred to as the Recession Generation or the Lost Generation. Upon graduating college, these relatively inexperienced, but educated workers have struggled securing employment opportunities. Unfortunately, once the economy rebounds many in this young workforce will be left with a glaring hole on their resumes.

“This is a serious problem for many young workers,” says Cox, adding that she believes Utah’s employers will look beyond those resume holes. “I tend to be optimistic about our employers. I think businesses are pretty savvy and understand that there’s a plethora of folks who are looking for jobs. I think employers will take the economy into consideration.”  

Cox adds that Utah’s young workforce has been integral to the state’s relatively strong economy. “Our young workforce has helped push the housing market and has brought different dynamics to the state,” she says. “The younger group of workers has a lot of benefits, so we hope that businesses take that into consideration and also consider the hiring freezes.”

Though times are tough, Cox sees today’s struggles as an opportunity for Utah’s employers to become stronger. 

“There’s always a silver lining,” she says. “We’re getting more productive and competitive. We anticipate that we’ve bottomed out and that things will get better if we continue to work hard. I think Utah will come out of this positioned much better off.”  

 

 


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