After years of being downsized, the white-collar workforce is now on the rise.
Companies are hiring engineers, lawyers, accountants, and computer whizzes. With a pickup in mergers and continued low interest rates, there is demand for finance specialists. And in an indication that this type of hiring is likely to continue, demand is growing for recruiters.
Hiring the shirt-sleeve crowd represents a shift in the economy toward higher- paying jobs and a more skilled workforce. It also indicates that some companies that squeezed their middle managements four years ago are starting to rebuild them.
"It's a sign that companies ... are not as worried that their fortunes will disappear at any moment," says John Challenger, an employment expert at the Chicago-based outplacement firm of Challenger, Gray & Christmas. "It means they are confident enough to take on more risks, more hiring of skilled people to grow their business."
Last week, the trend in hiring white-collar workers was apparent when the Labor Department reported that 157,000 new jobs were created last month, up from 137,000 in November. Almost 40 percent of the growth came in healthcare and business and professional services. This came at a time when manufacturing employment was flat and retailers actually cut staff.
"It was pretty much an average gain, which I think would continue into 2005," says David Wyss, chief economist at Standard & Poor's in New York.
The unemployment rate remained steady at 5.4 percent, but Mr. Wyss points out that the average duration of unemployment dropped sharply from 19.8 weeks to 19.3. "It's the lowest since August," he says.
The December employment numbers are the last that the Federal Reserve will see before their next meeting early in February. "These numbers say the economy is on trend," says Wyss, who expects the Fed will raise rates another quarter of a percentage point next month. This would move the Fed fund rate, a short-term interest rate, to 2-1/2 percent.
Although the jobs market is improving - in all 2.2 million jobs were created last year, the most since 1999 - employment specialists caution that business is not getting carried away with hiring as it did in the late 1990s.
"We're not going to see this insatiable demand for labor," says Jeffrey Joerres, chairman of Manpower in Milwaukee. "But I think there is a good side to this: As companies are acting in a more measured fashion, job growth is more likely to be sustainable as opposed to the traditional ebb and flow."
Yet Mr. Joerres says that many companies have started to realize they can no longer expect productivity gains out of their workforce as a way to keep projects moving. "You would be susceptible to higher turnover," he says.
In fact, according to a survey conducted last month by Monster.com, 93 percent of respondents said they would consider looking for a job in 2005. "It does not mean they will," says Jeff Taylor, founder of the online classifieds company. "But the idea is that we have a generally unsatisfied employee base out there. There are a lot of people who have not gotten a raise for three years."
At Monster, which says it gets 3 million visitors a day, the top five job postings are: sales, finance and accounting, healthcare, computer technology, and administrative and support jobs.
"It looks like the bigger companies are doing the hiring," says Mr. Taylor.
Within white-collar professions, Mr. Challenger says accounting is the "hottest" profession, especially for CPAs who are willing to travel.
The surge in this profession can be seen at Manpower, which owns the accounting firm Jefferson Wells. It added 1,600 CPAs to its workforce of 900 in 2004 and will be hiring more this year.
One of the major spurs to hiring more accountants is the Sarbanes-Oxley legislation, which requires CEOs to vouch for their earnings statements. Taylor says the new legislation means that accountants are double-checking everything, which takes 25 to 30 percent more time.
Businesses have also shown interest in hiring more upper-level executives. At Netshare, a Novato, Calif., company that helps executives earning $100,000 a year or more with their careers, job listings are up 25 percent over last December.
"Overall, we're seeing more jobs in sales and marketing than anything else, but we're also seeing a big increase in financial services and healthcare," says Kathy Simmons, chief operating officer. "Both search firms and companies are hiring recruiters, which is a leading indicator that executive jobs are up."