Tuesday, May 31, 2011

How Is The Job Market?

With unemployment hovering around 8.5 - 9.0% nationally, we all understand that this is a jobless recovery. When the economy collapsed, officially in 2008, advertising went into a tail spin. But I started to see advertising jobs disappear far before the official start of the collapsing economy. In mid-2007 I saw the number of available jobs going down. My estimate was that by the end of 2008, advertising unemployment was somewhere around 15% - far greater than the economy as a whole. To date, there has only been a slight recovery in advertising.

As a recruiter, I have always been able to take the pulse of the economy very quickly. I can tell by who is hiring and how many jobs are opening. I mentioned that we started to see the number of jobs in ad agencies beginning to close down over a year before the economy collapsed. Conversely, recruiters see the recovery first. In 1992 I was able to predict the improving economy long before the economic pundits did. Ditto in 2002/3 after 9/11.

Unfortunately, I have yet to see a sustained current improvement in the advertising business. 2009 remained poor. 2010 started poorly, but last summer there was a significant positive bump which lasted right through September. Then in October through this March of this year, advertising hiring flattened out and business was fair. It picked up again in April this year coinciding with a .05% drop in national unemployment. Lest anyone think that advertising is different or immune to the national numbers, think again. Business is better, just like the economy is better, but it is not yet great – just like the economy as a whole.

There are a lot of reasons for this. We all know that companies are doing more with fewer people. I am sure that per person productivity is way up, even as agency incomes have declined. Every agency has been affected by clients cutting budgets and cutting fees.

The good news is that some clients are increasing budgets and there is some slight upward movement in fees. This has not happened in any great numbers, but it has happened. As the economy continues to improve we will see more expansion jobs (most jobs now are replacements).

My predictions are positive for now through the end of the year.

Even in the worst economy there is generally an increase in job openings to mark certain events: the New Year, the beginning of the summer, and right after Labor Day all mark times when there is a bump in hiring. This increase in hiring generally happens about two or three weeks after the event; for instance, about two to three weeks after Memorial Day we will get jobs orders from agencies who basically want to hire for the second half of the year. The bump after Labor Day is because companies need people to cover fourth quarter spending.

So, I have my fingers crossed about what happens in a week or two. I would like to see a sustained recovery that lasts more than a couple of months. We all would.

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