While the overall economic outlook looks pretty good for 2012, with a few exceptions, employment continues to be a hang-up. Sure, productivity is up, but in some cases at the expense of current employee morale. Employers report they want to hire – but they are increasingly picky about who they bring on. They are worried about having the right people in place, as well as finding people who are able to move up into greater responsibility within the company.
As Julia Klein, CEO of CH Briggs, a specialty building materials distributor, notes in our annual trends article featured in this issue, it’s also possible that people are holding out for “the perfect candidate” given the sheer number of job-seekers out there, even if a person that fits all the qualifications they are looking for doesn’t exist. This challenging hiring environment will probably persist through 2012. In the December 2011 semiannual forecast from the Institute for Supply Management, purchasing managers expect overall employment in manufacturing to be up just 1.3 percent in 2012 over 2011. Non-manufacturing, which includes wholesale trade, is expected to grow employment just 1.1 percent.
Of course the weakest area for employment right now is in construction. According to MDM’s recent economic outlook webcast (mdm.com/2012outlook) unemployment rates in construction in November 2011 were 13.1 percent, higher than the overall industry unemployment rate, which sat at 8.2 percent. On the bright side (if you can call it that), construction employment has improved since November 2010, when it was at a staggering 18.8 percent.
On a broader scale, the Business Roundtable’s fourth-quarter CEO Economic Outlook Survey shows just a third of respondents expect to increase employment in the next six months. A quarter of respondents expect to decrease employment. Most just plan to hang onto the employees they already have – with no change.
Many companies are being more strategic about hiring right now and, already lean, they are more careful about who they keep on-board. Indeed, companies can no longer afford to hold onto employees that may be holding them back.
John Salveson, who writes a blog at mdm.com about human resources, said recently that a company needs to recognize the importance of having and implementing a strategic human resources plan. If they don’t, they put themselves at greater risk. It’s advice to take to heart.
As one industry veteran said recently, distributors need to be on their A game to take market share in a slow-growth economy, and that means finding the right employees to keep them there.