Job seekers in 2012 will continue to face a difficult job market, although a higher level of hiring may begin if the economy is stable. Many types of employers restructured and downsized thanks to the deep financial crisis of 2007-09. By 2011, most employers had pushed productivity about as far as they can, and future growth in business will require more employees. That brings up a big question: when, how and where will businesses begin to grow again? Meanwhile, job seekers who want good positions will be forced to be better prepared and to do better research than in the boom years that ended in 2007. They will also have to work harder to find good jobs. The fact remains that there are millions of Americans either out of work or underemployed. Competition for job openings will remain fierce. For example, Southwest Airlines reported that it received 143,143 resumes during 2010 while hiring only 2,188 new employees.
Job seekers in 2012 should be prepared for the fact that nearly all industry sectors suffered ill effects from economic and financial market problems that originated when the housing bubble finally popped in mid-2007 and the financial meltdown accelerated in 2008 and early 2009. America’s unemployment level will remain disturbingly high for some time to come.
The good news is that a select set of employers and growth companies will offer good job opportunities. In this period of challenges, a few companies will enjoy booming business. Sectors such as cloud computing and health care will continue to grow and hire. A few companies with exciting new technologies or cost-saving services will see terrific growth. Salesforce.com, a highly innovative provider of online business services, is a good example.
Solid companies that do a terrific job of providing the day-to-day needs of consumers and business will continue to hire—Costco, Amazon.com and Southwest Airlines are good examples. Other industry sectors that fall into this category include insurance firms such as USAA and GEICO along with electric and gas utilities.
Oil and gas exploration and production will continue to be a bright spot for hiring, even if oil prices decline somewhat. Oil field services firm Halliburton recently announced plans to hire 11,000 people, largely to work in America’s rapidly expanding shale oil and gas fields. The development of vast new shale oil and shale gas areas in dozens of states is opening up excellent job opportunities, fueling growth at providers of related services and supplies, and encouraging business investment of many kinds. At the same time, this new supply of oil and gas is holding down market prices, providing relief to consumers’ budgets.
Other firms will hire only limited numbers of employees, while some will downsize. Many companies that specialize in the manufacture or sale of luxury items have learned to adapt to two big changes. First, many companies have changed their strategies in order to offer a range of products with luxury features that include items with lower price points. Next, companies like Tiffany and Coach have successfully increased their sales of luxury items in emerging markets such as China.
Growing numbers of consumers will prefer to buy from firms that sell goods and services online, offering savings of time, money and car travel. This boosts companies like Amazon.com that offer low prices combined with deep selections and great customer service. Virtually all major retailers, including giants like Wal-Mart and Home Depot, are working hard to provide better online services and choices to their customers.
The travel industry has stabilized to a large degree. Airlines are in better financial shape than they were two and three years ago. Hotels are enjoying higher occupancy rates. Travel firms that do best will be those that have everyday low prices, like JetBlue, along with those that offer all-inclusive prices that seem like bargains, such as popular cruise lines such as Carnival. In fact, the cruise industry did quite well through the recession, and it is likely to create many jobs over the near future as a large number of new ships continue to enter the fleet. Meanwhile, travel has become the single most successful sector at selling products and services via the Internet.
The automobile sector has stabilized, but it now operates at much lower volume than it enjoyed during the boom. New cars have been selling relatively well in recent months, and hiring may be strong at car dealers and car manufacturers alike.
Residential real estate remains very depressed. Homeowners may make repairs or do light remodeling rather than move up to larger homes. The massive number of unsold homes on the market will continue to put a serious damper on the real estate and construction sectors in 2012.
Banking companies will continue to be challenged, and some, like Bank of America, will have lay offs.
Americans who find themselves in the market for a job will need to understand the changes surging through the economy in order to determine which companies to pursue and which to avoid. The U.S. employment market has evolved dramatically, and job seekers must be both knowledgeable and nimble in order to position themselves to find promising careers.
In order to create a robust job market, corporate investment, profits, productivity and revenues must align themselves correctly. These economic indicators were positive during the 2003 to mid-2007 period, and millions of new American jobs were created. As 2007 was winding down, the residential real estate crash, high levels of consumer debt and difficult credit markets were combining to restrain the economy. Millions of workers were laid off, and hiring slowed to a trickle. Unfortunately, 2008-2009 saw these problems spread throughout most U.S. business sectors. The banking, investment, retailing and automobile sectors were under extreme stress, and many major bankruptcies ensued.
One of the results of this tough recession was a new emphasis on increased productivity and cost-effectiveness at employers of most types. Direct results included reduced spending, investment and hiring, and in many cases layoffs.
In 2012, executives will be under the usual pressure to maintain profitability. If the economy begins to improve, they may also start to see some signs of potential growth in selected business sectors, which would encourage hiring. However, better economic conditions may not appear any time soon. Meanwhile, many major corporations are sitting on huge piles of cash. When CEOs become more confident about the future, that cash could fuel job-creating investments. The bottom line: new grads will find it difficult to land their dream jobs, and job seekers of many types will continue to be challenged to find appropriate positions. Nonetheless, there will still be job opportunities for those who are diligent in seeking good employers in stronger business sectors.
Economic Factors Affecting the Job Market
Business Productivity: Productivity has been rising in recent years. That is, business can be produced—whether it is goods or services—by utilizing fewer workers than before. This will be extremely beneficial to the U.S. economy in the long run, but it can hurt the job market over the short term. Productivity is boosted by new technologies, improved management methods and other factors, sometimes as simple as reorganizing the staff and redesigning the workflow to increase output. It can also receive a quick boost from restrained corporate hiring. If rising productivity occurs along with rapidly rising sales and profits, then the job market will improve.
Corporate Sales: A trend of rising sales encourages hiring. The rapid drop in sales at businesses of nearly all types in 2008-2009 caused employers to slash head count. During 2010-2011, the trend was toward somewhat higher sales in most sectors. Reasonable sales growth in 2012 could lead to slightly increased hiring. It remains to be seen whether this will occur.
Corporate Profits: When profits increase sharply, companies are inclined to increase both business investment and hiring. Profitability took a deep downturn in 2008. Many employers were able to post reasonable profits during 2009, but this was generally the result of deep cuts in spending and hiring. The job market suffered as a result. Growth in profits was exceptionally high during 2010 and much of 2011. However, this profitability was often the result of improved business overseas, restrained spending, or both. Hiring will rebound when corporate sales, and accompanying profits, show significant growth, encouraging executives to forecast an extended period of increased demand for their products and services.
In order to compete effectively in today’s job market, one of the most important things you can do is arm yourself with knowledge. It is vital for the job seeker to use the best reference tools possible in order to seek out employers that offer a reasonable balance of financial stability, opportunities for advancement and good pay. Excellent job opportunities always exist if you know where to look. Many of America’s most successful firms currently need large numbers of new employees.
Thousands of companies, in technical and non-technical sectors, will need large numbers of new hires. In particular, companies that offer products or services that save time and/or money will prosper—for example, many types of companies that offer services that help businesses operate more efficiently, will be hiring. Meanwhile, large companies that are not increasing their overall numbers of employees will be hiring on a regular basis due to normal attrition—that is, the loss of employees due to retirement, relocation or other personal circumstances. For example, massive companies like Walgreen’s or Kroger typically need to hire tens of thousands of workers yearly due to normal attrition.