Kent Niederhofer can't find enough mechanical engineers to work for him in southeastern Michigan. You know, where Detroit is, with its 13.3% unemployment rate. Niederhofer is president of the American branch of Ricardo, an engineering consultancy that designs the power trains of some of the coolest stuff around: Bugatti sports cars, huge wind turbines and unmanned aerial vehicles. "We are doing rocket science every day," says Niederhofer. "It's just not on rockets." So Ricardo got a little desperate, renting a billboard to place a help-wanted ad that featured a picture of a sexy-looking sports car, the tagline "Why you became an engineer" and a Web address for job seekers. He calls it engineer porn.
General Electric is also trying to poach some Motown engineers to staff its expansion at Appliance Park, in Louisville, Ky., and three other locations where it is establishing "centers of excellence" in refrigeration technologies. The company is in the middle of a $1 billion investment in its appliance sector that will create 1,300 jobs at all levels over the next four years. GE has repatriated insourced, if you will a refrigerator-manufacturing line from South Korea (thanks in part to a new union deal and a weaker dollar that makes U.S. labor more competitive) even as it waits for the housing market to rebound enough to restore demand for fridges. "We think it's going to be a slow crawl back over the next several years, which, for us, is why we are investing now," says James Campbell, CEO of GE Appliances & Lighting.
At the white collar end of town, the auditing and consulting firm Deloitte is on a hiring mission. It recently became the world's largest professional-services firm, boasting 170,000 employees, and it has been scouring college campuses for fresh brains. The firm needs tax specialists, lawyers, auditors and other bright minds who can be taught to solve the problems of the planet's businesses problems that are changing in a world where Chinese, Brazilian and Indian companies are transforming markets. "The thing that I'm excited about and delighted with is that our hiring plans in the U.S. are now back to the precrisis levels," says CEO Jim Quigley. "We are hiring for all of our lines of business."
Why so bullish? By late last fall, Deloitte had discounted the likelihood of a double-dip recession, no small bet since a lack of confidence has been a big impediment to hiring for lots of companies. Deloitte sees the global economy accelerating, and like about a third of the Fortune 500, it now gets over half its revenue from fast-growing markets abroad, according to Capital IQ. Deloitte wants to be in a position to offer this growing client base the panoply of services it is going to need. It doesn't want to be caught short of talent.
A Turning Point, Maybe
Flexible, outwardly focused companies such as Ricardo, GE and Deloitte are the main force behind an optimistic and underplayed fact: last September, the U.S. economy finally stopped bleeding jobs. And now job creation may be at a crucial turning point. The ADP National Employment Report recorded a surprising 297,000-job jump in private-sector employment in December. Manufacturing activity is up, retail sales are strong, and overall GDP growth is on track to be a healthy 3% this year. Inflation is still muted, and stocks are on a roll. It all bodes well for the Obama Administration's efforts to mitigate the 9%-to-10% unemployment rate that has hung for 19 months like a deadweight around the neck of the economy, not to mention the national psyche.
The Great Recession didn't merely cause cyclical job losses. It created an unemployment chasm. More jobs were lost in the 2007-09 recession, which officially ended in June 2009, than in the previous four recessions combined, says Nariman Behravesh, chief economist for IHS Global Insight. "It's a very deep hole that we are climbing out of. We lost something close to 8 million jobs. That's why it's going to take a long time 2015 to get to [an unemployment rate of] 6%." Indeed, the rate could even rise again, as people who left the labor pool and thus don't count as unemployed start to look for work again.
That 6% figure refers to what economists call full employment, meaning that people who want to work can find it (give or take time lost to layoffs or telling the boss to shove it). Knocking any kind of dent in the current jobless rate is going to require the net addition of at least 135,000 jobs month after month.
That's not happening yet. But economists are revising their GDP growth projections upward, and if the conventional wisdom holds, that has to result in stronger job creation at some point quite soon. (Employment growth tends to follow GDP growth with a lag.) Companies are already sitting on mountains of cash because they increased productivity through layoffs and other efficiencies. They have the money to hire, but they need to see increasing sales to justify it. There's some evidence that consumers are finally opening their wallets. Christmas sales were strong. Given the stimulus coursing through the economy from the Federal Reserve's quantitative easing, the tax-cut extension and a 2-percentage-point reduction in the payroll tax, the retail therapy should continue into the new year.
Already, those on the front lines of the job search like college career officers are noticing a difference. For college graduates, 2011 figures to be a much better year than the two that preceded it. How could it not? The University of North Carolina at Chapel Hill's career-services office reports that 7% more interviews were scheduled by companies on campus this past fall than the year before. Still, that's 19% below the figure for fall 2007, so students shouldn't expect a welcoming party. Says career-development director Ray Angle: "I cannot tell you how many times I'm sitting across from a recruiter and they say they want to make sure we're getting the best 10% to 20%." That on-campus tete-a-tete has gotten much more competitive. "People want the best and the brightest," says Angle. "It used to be they said they wanted qualified candidates. But now they say they want people to hit the ground running."