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Thursday, October 6, 2016 - 16:12


Repeats Story Initially Transmitted at 17:05 GMT Oct 6/13:05 EST Oct 6

-- Health Care, Construction, Manufacturing Seek More Workers
-- Talent Shortages Persist in Some Locations, Driving Up Wages

PHILADELPHIA (MNI) - Demand for employees grew strongly in many areas of the U.S. in September, driven by health care, construction, manufacturing and in some areas agriculture, recruitment companies said.

Talent shortages for a range of occupations persist in some parts of the west and northwest, driving up wage rates even for non-managerial employees, and creating an employee market.

As unemployment rates in some cities dropped to their lowest in years, some recruiters reported an increase in demand for permanent employees, suggesting growing business confidence, while all of those interviewed said they were optimistic for a strong end to the year.

Most staffing executives said demand for workers has not been dampened by any uncertainty over the outcome of the presidential election.

In the northeastern region of the recruiting chain Manpower, billing volume was 20% higher at the end of September than at the start of the month - the strongest monthly growth rate so far this year -- driven largely by demand for financial services employees, said Betty Gooding, regional vice president, who oversees the company's activities in New York and New England.

More financial firms are looking for positions like customer sales representatives and people to deal with growing credit-card fraud, Gooding said.

The surging demand also covers other types of positions such as drivers and people to staff distribution centers as the holiday sales season approaches, creating more pressure for placements across the board.

"We have more orders than we have people to fill them," she said.

The difficulty in finding the right people is heightened by the background checks, drug tests and, in the case of financial employees, credit checks that applicants are increasingly required to take, Gooding said.

In Sacramento, Calif., Pacific Staffing had an unexpectedly strong 25% increase in billing for September compared with August on good demand for placements from the construction, health care, agriculture and legal industries, said Preet Kuar, Executive Recruiter at the company.

The latest increase in revenue, the strongest monthly gain since February, was driven in part by an increase in "direct hiring" - full-time employment as opposed to contract work - which earns the company an average of $18,000 per placement for an executive position, Kuar said.

After a slowdown in June and July and some gains in August, hiring strengthened further in September, she said.

"September was a good month for hiring activity at all levels," she said. Most demand for recruitment assistance has come for mid-level positions such as staff accountants and human resources specialists. "There is definitely a candidate shortage here."

Demand for accountants, HR people and administrative staff has risen strongly within a booming local construction industry, as well as from property developers and construction-insurance companies, she said.

Kuar is also finding more business coming from companies that are moving to Sacramento from the San Francisco Bay Area where high rents and scarce employees are making it hard to do business.

Any business uncertainty generated by the presidential election doesn't seem to have dampened demand for employees, Kuar said. "It thought it would; I was pleasantly surprised," she said.

The outlook for October is also upbeat, with plenty of demand for attorneys and legal support people, accountants, and HR people, especially for expanding organic farms in California's Central Valley. Other in-demand skill sets include IT and engineering.

Demand for employees in many fields is also strong in the Pacific Northwest, and is leading to a shortage of people with technical skills that can be used in manufacturing, said Dale Sprague, regional director for Manpower Group.

Unemployment has dropped to such low level in areas such as Boise, Idaho - which has a current level of only 3.4% -- that the skills shortage is spreading to people without college degrees, and who can operate certain machines on a shop floor, he said.

Finding people to fill those positions is "more challenging than it has ever been," Sprague said, attributing the shortage to fewer young people getting technical qualifications, as opposed to college degrees.

Those who do have the qualifications and experience are increasingly able to name their price. He said that hourly rates for those employees have risen to $13.50-$15 from around $10 only 18 months ago.

"It's very much an employee market where there are so many companies needing quality people," Sprague said, adding that employers have been struggling to fill those positions for about the last 18 months.

Strong demand is coming from manufacturers including food producers; makers of electronic equipment and cabin interiors for aerospace companies; call centers for a variety of services, and makers of computer parts.

Throughout Manpower's northwest region, revenue rose 5-10% in September compared with a year earlier, Sprague said.

Across the West, Manpower's revenue was up about 10% in September compared with a year earlier, and as much as 20% higher than in August, said Frank Armendariz, regional vice president.

Especially strong demand has come from the logistics industry such as distribution centers and business services such as call centers, but there has also been vigorous growth from healthcare and construction, he said.

Employers have not abandoned their post-recession caution before taking on more people but are confronted with a tight labor market that has spread from a few occupations a year or two ago to many now, Armendariz said.

"Because of how tight the market is today in every skill set, whether that be for production lines, call centers, accountants or HR managers, it really goes across the board," he said.

The competition for employees is driving up wages by as much as 15% in some places, and has driven some employers to raise their prices to meet the increased wage bill, he said.

Nationally, a recent Manpower survey on hiring intentions by U.S. employers in the fourth quarter found that 22 percent of some 11,000 employers interviewed said they plan to increase hiring from October to December, little changed from 23% in the third quarter, and sharply outweighing the 6% that expect declining employment.

The net employment outlook, after adjustment for seasonal variations, rose to 18% from 15% in the third quarter, the survey found.

In Denver, concern about the presidential election has cut into demand for help in the legal industry, said Connie Rossi, owner of Rossi Staffing, which places attorneys, paralegals and legal assistants.

She said demand was strong until about six weeks ago but has since tailed off, and is not expected to recover until early 2017.

"Things have really slumped now," Rossi said. "I think a lot of it has to do with the upcoming election. A lot of the larger corporations are holding off to see what the change in administration is going to mean for their business."

In Madison, Wis., Shane Grady, managing senior recruiter for the recruitment company Drake & Co. said billings for temporary and "temp-to-hire" employees were 26% higher in September than in August.

"We're really busy," he said. "These are new positions, it's not like they are back-filling. It's probably just growth in general."

Grady said some of the strength is coming from the healthcare industry which has been seeking more help in support categories such as accounting, administration and executive assistants.

He said much of the healthcare demand is coming from the University of Wisconsin Hospital which he called a "big driver" of demand for staff. The company is also seeing strong demand from accounting and consulting firms, especially for employees to work in wealth-management functions, Grady said.

Another indication of a buoyant local employment market has been more demand for administrative support people from manufacturing firms for the first time in several years, Grady said.

"We're getting more of those openings than we did in the last three or four years so that's a good sign overall," he said. "Small- to medium-sized manufacturers seem to be doing well."

Grady said he had three new orders in recent days - from an accounting firm seeking human-resources support, and from a wealth-management company which needs an administrative person.

Such examples are encouraging an upbeat outlook for employment growth in the fourth quarter. "We're very pleased with the way things have gone in the last three to four weeks," he said. "We're pretty optimistic. Everything that we're seeing is pointing toward continued growth."

U.S. September non-farm payrolls are expected to grow by 170,000, according to the median forecast from a MNI survey of 17 economists and financial institutions.

The U.S. Labor Department is scheduled to release the Employment Report for September at 8:30 a.m. eastern time Oct. 7.

--MNI New York Bureau; +1 215-236-3436; email:

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