Who's Hiring Right Now

A few weeks ago, I predicted that job growth won't come from one company rehiring 10,000 laid-off employees, as has happened in the past. Instead, I said to watch for 10,000 small businesses to hire one employee. Well, I was wrong...sort of.

Fortune magazine, in its annual Best Companies to Work For report, found that 22 of the winning companies have at least 500 openings, totaling more than 87,750 jobs. 

I erred in the fact that many of these businesses, while not small businesses, were hiring more than one employee each. That’s good news. Unlike rehiring trends after past recessions by large industrial companies like General Motors, Ford, US Steel and the like — when tens of thousands of employees returned to work in one fell swoop — it takes an announcement to rehire 500 employees to make news. 

And while any rehiring is good news, it’s not likely to dent high unemployment rates since lost jobs were in construction and manufacturing. For example, Cisco, with more than 60,000 employees, plans to hire 595 workers in 2010. But this isn’t just about head count. Cisco is looking for network and software analysts and electrical engineers. While the overall unemployment rate is 10%, the rate for skilled labor, mostly four-year college graduates, still hovers around 5%. That means some employees will be hired from the ranks of the unemployed while others will be “poached” from competitors.

The same goes for Genentech. Of the more than 9,500 Genentech employees, more than 80% have college degrees and more than 20% hold Ph.D.s and other advanced degrees. Genentech plans to hire 523 people — research scientists, clinical specialists, medical directors and IT specialists. The unemployment rate for highly skilled workers, while almost triple the rate from 2006, is still near full employment. Where will there new employees come from?

Confirming our shift from an industrial to a service and knowledge-based economy, firms like Accenture lead the way with plans to hire 45,000 workers this year. Financial services, accounting and consulting firms by far lead the pack in plans to hire: Deloitte, 11,000; PriceWaterhouseCoopers, 5,097; KPMG, 2,700; American Express, 1,300; Booz Allen Hamilton, 695; USAA, 650; Ernst and Young,  622; and Edward Jones, 631. The requirements to be hired by every one of these firms almost always requires a four-year or advanced degree.

If this group is any indication of things to come, more than 25% of new jobs created in this recovery will be in the financial and consulting sector. 

That said, there's hope for the competent service-oriented worker. The retail sector seems primed to reboot too. Nordstrom plans on hiring 4,766 workers while Wegmans Food Market expects to hire 1,500 employees. Publix Super Markets and Whole Foods Market are ready to add 1,300 and 1,160 staffers, respectively.

Amidst the doom-and-gloom news of persistent high unemployment, there are glimmers of hope. Fortunately, the jobs being created are high-income jobs…and high-income jobs stimulate spending which stimulates economic growth. Based on Fortune's report, it seems that an economic recovery with sustained high unemployment is likely.

This leads to a provocative question: are government-subsidized attempts to stimulate job growth and lower unemployment driven primarily by politics or sound economic policy? In order words, is it political suicide to allow unemployment to remain high even if many of the unemployed don’t have the skills required by employers? What do you think?