What's on the Minds of Employers?

Employers and workers alike are on edge as the economic struggles that began in 2008 have extended into 2009 and will likely last into the upcoming second quarter. A new survey from CareerBuilder and USA Today and conducted by Harris Interactive examines how employers are viewing head count and how employees approach their careers.

During the previous four months, the United States lost 2.6 million jobs, but now employers are focused on retaining their talent. "The Q2 2009 Job Forecast" found retention is a higher priority than hiring.

Employers are taking a wait-and-see approach to hiring, but there are those who are still seeking new employees. In the second quarter, 64 percent of employers expect no change in their numbers of full-time employees. They are, however, focused on preserving top performers in order to control expenses and find new revenue streams.

Quarterly hiring

Although hiring isn't as strong as it has been in recent years, some employers are still looking for new talent. Thirteen percent of surveyed employers said they increased their number of full-time, permanent employees during the first quarter. Meanwhile, staff levels remained the same for 61 percent of employers. Another sign of the recession's impact can be seen in 26 percent of employers reducing headcount during the first quarter, while only 13 percent did so last year.

In the second quarter, however, 14 percent of employers expect a decrease in head count. An equal percentage intends to add full-time, permanent employees in the second quarter. A majority (64 percent) of employers won't lower or increase personnel at all.

Layoffs

Employers reduced their head count more in the first few months of 2009 than in the same period last year, but the second quarter looks more favorable for workers. Twenty-two percent of hiring managers reported layoffs at their locations in the first quarter, up from 11 percent in 2008. Twelve percent expect layoffs in the coming quarter and 64 percent expect none.

The forecast also finds that human-resources managers have a positive outlook for their companies, as nearly half believe the economic stimulus will improve their ability to get more business. Once business improves, 23 percent of these managers intend to rehire workers who have been laid off due to the economy.

Compensation in Q2 2009

As expected, tighter budgets have prevented employers from offering significant pay increases and resulted in pay reductions for some employees. Only 42 percent of employers expect salary increases for full-time, permanent employees in the second quarter, a decrease from 70 percent in 2008. However, 46 percent of employers expect no change in pay levels and 7 percent expect a decrease.

Of the employers who will offer a raise, 29 percent believe the amount will be between 1 and 3 percent. Twelve percent expect salary increases of 4 to 10 percent. Only 1 percent of employers think the amount will be 11 percent or higher.

6 employment trends for employers and job seekers

The Q2 survey not only revealed patterns about hiring and layoffs, but it also showed both employers and employees are reprioritizing their workplace plans. These six employment trends emerged from the survey:

1. Trimming perks and benefits

In an attempt to stay afloat until the economy calms, companies are looking for temporary opportunities to reduce costs. One solution is to cut some or all perks and benefits offered to employees, which 42 percent of employers did in the first quarter of this year. In the second quarter, 32 percent expect to do the same. Bonuses, 401(k) matching and health-care coverage are the three most affected areas.

2. Upgrading talent rosters

Slower hiring cycles have given employers an opportunity to replace lower-performing workers with top talent that wouldn't otherwise be available in a healthy economy. Job seekers in sales, accounting and finance, retail and customer service are the candidates benefiting most from these hiring practices.

3. Postponing retirement

Workers nearing retirement age have decided to adjust their plans in light of the economy's impact on their long-term finances. Of surveyed workers over 60 years, 60 percent said they will put off retirement. Seventy percent of these workers think they will need up to six years to recover their lost savings, while 10 percent fear they will never regain the financial security needed to retire.

4. Transferring skills

When workers are ready for a career switch, they can look for their transferable skills to help them make the move. Of workers who were laid off and have not found work, 73 percent said they are looking for jobs outside of their chosen profession, either due to a desire to change or a lack of available jobs. Fortunately, 69 percent of hiring managers said they are willing to hire a job seeker who doesn't have experience in a specific field but does have transferrable skills.

5. Relocation

Thirty-nine percent of workers who were laid off and have not found work would consider a new city or state for a job. Employers are also willing to expand their search for talent, as 25 percent of hiring managers are willing to pay for the right job candidate's relocation.

6. Returning to the classroom

Education continues to be a resource for workers looking to increase their marketability to employers. Twenty-one percent of all surveyed workers are going back to school for formal degrees, certifications and refresher courses.