Caution and seasonality are influencing hiring expectations for the fourth quarter as employers assess ongoing barriers to economic growth and wrap up 2011. This is according to CareerBuilder’s latest nationwide survey of more than 2,600 hiring managers and human resource professionals conducted by Harris Interactive from August 16 to September 8, 2011.
Consistent with trends typically seen at the tail end of the calendar, employers anticipate a moderate slowdown in hiring. Twenty-one percent of hiring managers reported that they plan to hire full-time, permanent employees in Q4, down from Q3, but on par with 2010.
The tempered plans for Q4 follow a slightly softer recruitment picture in Q3. In terms of actual hiring, 26 percent of employers reported they added full-time, permanent headcount in Q3. While better than the same period in 2010, this is down three percentage points from Q2 2011 – reflecting a more hesitant hiring environment in the face of rising commodity prices, a volatile stock market, concerns over Europe’s sovereign debt crisis and other global issues.
“While hiring is historically slower in the fourth quarter, recent world events and a structurally impaired U.S. economy are causing employers to be a little more guarded,” said Matt Ferguson, CEO of CareerBuilder. “Job creation levels are not yet high enough to drive down the unemployment rate, but the hiring trends we’ve seen through our surveys and on our job site still indicate an overall positive sentiment among employers. For eight consecutive quarters, 20 percent or more of employers reported adding new jobs and the same is expected for Q4.”
Education and Skills Gap
When looking for talent, companies are still having a difficult time filling certain positions despite the stiff competition for jobs. Two-thirds of employers (67 percent) expressed concern over the education and skills gap in the U.S. and corresponding deficit in talent for specialized positions. The top areas employers identified as having a significant skills gap include engineering (37 percent) and information technology (33 percent).
Hiring in Q3
More than one-in-four hiring managers (26 percent) reported they hired full-time, permanent staff in the third quarter, up slightly from 25 percent last year, but down from 29 percent in Q2. While staff reductions slightly improved year-over-year – 11 percent reporting a decrease in headcount in Q3 2011 compared to 12 percent in 2010 – it was unchanged sequentially. Sixty-two percent of employers reported their staff levels stayed the same in Q3 while 1 percent were unsure.
Hiring in Q4
Looking forward, 21 percent of employers expect to increase their number of full-time, permanent employees in Q4. Ten percent expect to downsize staffs while 64 percent anticipate no change and 5 percent are undecided.
Temporary Hiring in Q3 and Q4
To supplement staffs, 32 percent of employers turned to temporary help in Q3. Twenty-seven percent plan to hire temporary or contract workers in Q4 with 17 percent of employers expecting to transition some of these employees into permanent staff.
Hiring By Region
Regional data presents a mixed picture. While the West leads the U.S. regions in the number of employers expecting to hire full-time, permanent employees in Q4 (23 percent), it also houses the highest number of companies planning to downsize by year end (12 percent) – showing a blend of both optimism and uncertainty seen across regions.
Twenty-one percent of employers in the Midwest and South and 19 percent in the Northeast plan to add staff in Q4. Ten percent of employers in the Northeast and 9 percent in the Midwest and South expect to decrease headcount.
Hiring By Company Size
Comparing company sizes, small businesses continue to lag larger organizations in hiring activity, but are also less likely to reduce staff levels.
Companies with 500 or fewer employees – 17 percent plan to increase full-time, permanent headcount in Q4; 8 percent expect to reduce staff levels. Of those with 50 or fewer employees, 12 percent plan to add new employees while 8 percent expect to reduce staff levels.
Companies with more than 500 employees – 27 percent plan to hire full-time, permanent staff in Q4; 11 percent plan to decrease headcount.
Forty-one percent of employers anticipate no change in salary levels in the fourth quarter compared to the same period last year. Thirty-eight percent expect there will be an increase of 3 percent or less. Twelve percent expect their average changes will be between 4 and 10 percent and 1 percent predict an increase of 11 percent or more. Four percent anticipate a decrease in salaries.
Totals may not equal 100 percent due to rounding.
This survey was conducted online within the U.S. by Harris Interactive© on behalf of CareerBuilder among 2,696 hiring managers and human resource professionals (employed full-time, not self-employed, non-government) between August 16 and September 8, 2011. CareerBuilder is the global leader in human capital solutions. CareerBuilder and its subsidiaries operate in the United States, Europe, Canada and Asia. For more information, visit http://www.careerbuilder.com.