REALITY CHECK: US RECRUITERS SAY DEC JOBS BEAT EXPECTATIONS
--E-Commerce Further Sponges Up Available Workforce --Low-Wage Jobs Pick Up; Wage Increases Remain
Muted
By Gary Rosenberger
NEW YORK (MktNews) - U.S. recruiters say demand for labor grew substantially during December amid great
sales expectations for the holiday retail season, further tightening an already stretched workforce.
Recruiters say their biggest boost may have come from Internet retailers that beefed up far beyond their original
ambitions, and are holding on to those workers for a longer period than at first anticipated.
Demand for low-wage manual labor also picked up dramatically during the month, according to a major staffing firm
specializing in temporary manual labor.
Nevertheless, wage increases remained moderate -- although there were reports of stratospheric wage spikes for
jobs associated with Millennium celebrations.
The only apparent softness was in information/technology, albeit some reported strong demand building with the
new year.
The big jobs booster for the month was Internet retail, said Alan Purdy, senior vice president and CFO of Remedy
Intelligent Staffing, a national firm based in Aliso Viejo, California.
"Demand from e-retailers -- logistics, shipping, response centers -- was even stronger than we had been led to
believe, and as a result our growth rates were pretty substantial," Purdy said.
"We had expected business to fall flat in January, but because of returns they're keeping more staff on hand for a
longer period of time," he said.
As for light industrial and clerical, "things aren't too shabby at all. It's just that the biggest amount of growth came
from the Internet," he said.
Purdy described a labor market that continued "very tight."
"It's about as bad as it's ever been -- unfilled orders are higher than normal," he said.
At the same time, he said he hasn't "seen much change" in terms of wage pressures.
Other recruiters also reported robust conditions for the month.
"Our growth rate was about 14% to 15%, which was stronger than last December," said Tim Loncharich, president
and CEO of Dallas-based Snelling Personnel Services, with about 235 offices in 46 states.
Fred Morache, Snelling's director of marketing, noted that the strength of demand for retail-related jobs -- from
warehousing, distribution and customer service to manning counters, registers and phones -- was apparent as early as
November.
"Our big problem was that we had more orders than we could fill -- the markets were especially tight in New York,
Chicago, Dallas and Kansas City," he said.
Morache said he discerned no wage spikes among those tight labor markets, but "employers are becoming
susceptible to the idea that wages will bring people in."
On average, Morache sees wages rising at about 4% to 5% on an annualized basis.
Morache observed that the labor market, if anything, tightened in December because of the strong demand from
Internet retailers.
"There were a lot of workers being hired to fill orders, man the phones and pack boxes -- business was very strong
for that sort of thing," he said. "Retail pushed the supply and demand curve even tighter."
He added that the softening in IT that began in August continued through December as "many companies blew their
budget fixing Y2K."
"By the second half of the year many already used up their budgets for contract labor and consulting fees -- contract
work has definitely cooled in the IT area," he added.
However, another labor recruiter said there is good news on the horizon for IT workers.
"For us, December has been interesting from the standpoint that our IT customers have come back to life," said Eric
Lindberg, president and CEO of MSI International based in Atlanta.
"A lot of people have told me they'll be gearing up for the beginning of the year," he said.
Other than that, Lindberg observed December to be a "so-so" month because of seasonal factors, namely the
vacation and holiday downtime his clients typically enjoy during the period.
An official for the nation's largest provider of temporary manual labor described a spike in new orders during
December, with no particular problems filling them.
"We haven't seen a slowdown in demand at all," said Shannyn Roberts a spokeswoman for Labor Ready, with
about 650 offices nationwide, based in Tacoma, Washington.
Roberts said the company's customer count grew from 190,000 in 1998 to 250,000 in 1999, an increase of about
60,000 customers -- "and we were growing at a rate of about 3,000 to 4,000 new customers a week in December."
The company's worker count also grew by leaps in December, she said.
Labor Ready counted about 640,000 workers in 1999 versus 533,000 in the prior year, an increase of 107,000
workers, she said, adding "40,000 plus was in December."
In spite of that, "we had no problem filling those positions," she said. "We've even gone to the Census Bureau
because we feel we have the workers to help get the census job done," Roberts added.
Roberts noted there are no severe wage pressures at the lower rungs of the workforce, noting they've "remained
pretty consistent."
Finally, as had been reported in a previous Reality Check, wages for catering staff spiked sharply for Millennium
Eve affairs -- with event planners reporting wages of as much as $250 an hour, and many workers easily commanding
three to seven times the holiday norm.
The U.S. Labor Department is scheduled to release December jobs data on Friday at 8:30 a.m. EST. November
non-farm payrolls rose by 234,000 compared to a gain of 263,000 jobs in October.
The unemployment rate remained steady at 4.1% for both months.
Editor's Note: Reality Check stories survey sentiment among business people and their trade associations. They are
intended to complement and anticipate economic data and to provide a sounding into specific sectors of the U.S.
economy. |
