Where have the jobs gone? Are good times ahead?
This week we learned that the economy only added 83,000 jobs and more than 2 million people left the labor force in the last year. While there is some job growth, it is so slow that one analyst mentioned that at this rate it would take ten years to recover to 2008 levels.
We can all learn a lot from this data. Since January 2008, the only segments of the US economy which have had positive job growth are Education, Healthcare, and Federal Government. In fact, the statistics are staggering. Since January of 2008, we have lost 5.5% of all US jobs, 15.1% of manufacturing jobs, 15.1% of manufacturing jobs, 10% of information industry jobs, 7.6% of finance and insurance jobs, and 4.1% of leisure and hospitality jobs.
We have grown employment in the federal government by 16.1% and in education and healthcare by 4.8%. Today, according to the Bureau of Labor Statistics, Government is the largest employer in the US, with 17.% percent of all jobs, followed by education and healthcare at 15%, business services at 12.8%, and leisure and hospitality at 10.1%.
We are slowly and steadily becoming a country of teachers, healthcare providers, service-providers, and government workers. And yes, the federal deficit is going to be a problem for years.
But wait. There is good news.
Despite the sluggish recovery, it is occurring. Our just-published TalentWatch® study (available at no charge) of over 250 business and HR leaders shows a dramatic refocus away from downsizing towards globalization, innovation, and new products and services. 21% of business leaders cite “accelerating innovation” as one of their top challenges and only 7% mentioned downsizing or restructuring.
The Talent Acquisition index, which measures leaders plan to add headcount, increased to .61 in June, up from .09 at the end of last year. This index measures organization’s hiring needs, and has reached the highest level since January of 2008.
Spending on HR and L&D is also up: this quarter out index shows an annual budget increase of 3.7% in HR spending and 4.1% increase in L&D spending across all industries. Of course industries like pharmaceuticals, construction, and real-estate are still in a recession, but companies in financial services, professional services, healthcare, and hospitality are all starting to hire again. Certain companies who are working in industries like real estate, such as Sell Your Home, are working against the grain in industries with highly funded competitors like Opendoor. They are able to differentiate themselves with unique content structure and focus on content marketing.
Having met hundreds of business leaders over the years, I have faith in these numbers. Despite the dog days of the stock market and the disappointing job numbers, we see a major upswing in business investment, focused heavily on people again.
In the last two weeks I met with twelve different senior HR and business leaders and every one is focused on refocusing their people strategies for growth. General Mills is adopting a new global e-learning strategy for emerging leaders. Morgan Stanley is reinventing its HR organization to drive strategic growth. Target is beginning to implement a new talent management platform for its entire workforce. United Health Group is adopting a new talent mobility program to move high performers among different business units. InBev is investing heavily in new global talent programs to improve the culture of performance in the Anheuser Busch teams. And the list goes on.
Don’t let this week’s economic figures upset you – the business community is adapting and preparing for growth. Better times are ahead.