Hiring Hobbled Economy

Posted on Feb 1, 2009 :: Up Front
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Posted by , Insight on Business Staff Writer

Mary Wettstein, QTI Fox Valley

It’s not a pretty economic picture out there and area businesses are taking a cautious approach when it comes to employment matters for 2009, according to a recent employer survey.

In a survey of 53 Fox Valley companies by The QTI Group, which provides staffing/recruiting, human resources outsourcing and consulting, 47 percent of organizations predicted they would keep the size of their staffs the same while 34 percent said they may cut workers or institute a hiring freeze. Twenty-seven percent of organizations indicated they would freeze or downsize their temporary staffing levels.

The job picture really changes from industry to industry, says Mary Wettstein, vice president of QTI’s Fox Valley location. For example, some industries such as health care and professional services such as accounting firms are predicting stable employment levels for the year to come while financial institutions and manufacturers think layoffs are likely.

“We all have heard about the changes occurring to the national banks; but the regional and local banks are also looking at ways to cut costs,” she says. “In manufacturing, we are seeing some sectors in the area thinking about contracting their workforces, while others look to expand.”

QTI isn’t alone in predicting that employers are taking a wait-and-see approach when adding to their staffs. Manpower Inc., a Milwaukee-based employer services provider with offices around the world, conducts quarterly employment outlook surveys to also get a read on what employers are thinking. For the first three months of 2009, the survey indicated that 67 percent would stay the same while 13 percent plan a reduction. Sixteen percent indicated plans to add to their workforce.

This suggests a majority of employers are carefully monitoring the uncertain economic environment prior to making any additional employment decisions, says Jonas Prising, president of Manpower North America.

“The large number of employers that plan to sit on the sidelines in terms of hiring suggests that while they may not be adding large numbers of workers, they recognize that having available talent is critical to business success,” he says. “Employers who are smart are preparing now to be ready when the economy recovers.”

In addition to measuring hiring plans, the QTI survey also asked HR managers about their expected salary increases for 2009. Unfortunately for many workers, 32 percent indicated they adjusted their original salary increase budget downward due to the changes in the economy with the average increase in salary budget at only 2.8 percent.

Matt Shefchik, a human resources consultant for QTI, says businesses are looking at their human resource costs in a variety of ways and working to figure out what cost-saving efficiency measures will position them well for 2009 and the future.

“With the current economy, employers will also focus on sales force effectiveness and may modify sales force performance expectations,” he says.

The survey clearly reveals area businesses are feeling the pressures of the global economic crisis, Wettstein says.

“While competition is no stranger to businesses in Northeast Wisconsin, many companies we spoke with suggest this is a time of unprecedented uncertainty and are facing challenges never seen before,” she says. “The good news is new initiatives lead by the New North and others are fostering collaboration among firms to position companies to compete on a global level, not just locally.”

For employers looking to hire in 2009, the focus is definitely on positions requiring a specialty skill set, Shefchik says. Other employers are looking to hire temporary or part-time employees for positions that had previously been filled by full-time workers.