JULY JOB MARKET UPDATES: SHAKER’S TAKE
Every first Friday of the month we receive an important measurement for the employment marketplace in the BLS Jobs Report. As crucial as those stats measuring previous hiring activity are for evaluating future recruitment strategies, surveys projecting future activity can be just as valuable.
According to one such forward-looking survey, the quarterly Business & Industry Economic Outlook Survey released 9/1/16 by the American Institute of Certified Public Accountants (AICPA), a majority of companies appear to be forecasting extended expansion plans and projecting either hiring new workers or training existing ones in the fourth quarter of 2016.
The survey also indicates filling open positions in a number of categories with qualified workers will remain a serious challenge; one of the three biggest challenges listed by finance executives in the survey, up two spots from the beginning of 2016. The Journal Of Accountancy (http://www.journalofaccountancy.com) provided two examples in a recent article of companies with an increasing difficulties in recruiting candidates with the appropriate skills for their job openings.
Dennis Durkin, CPA, the CFO of Trend MLS, a real estate listing service near Philadelphia, has reported struggling in the past to find specialists such as software developers or engineers, but now the lack of qualified talent has extended to customer service (telephone call center) jobs in the company’s support center.
Melissa Ruby, CPA, the controller at Melton Truck Lines, a 1,200 truck line in Tulsa, Okla., reports hiring truck drivers continues to be difficult because job candidates are able to find work in other industries; including those industries which do not require regular overnight travel. Therefore, Melton Truck Lines is focusing on retaining current drivers in addition to attracting new ones. But with more older drivers than younger drivers available to recruit, Melton has taken the initiative to offer training and mentoring programs for newer drivers.
The CPA Outlook Index (CPAOI), a nine-component measure of economic sentiment, rose to 69 in the third quarter, up one point compared with the previous quarter. Although it is down slightly from 3Q/2015, the index has risen two consecutive quarters, buoyed by increased optimism about components such as profits, expansion, employment, and training. An index measure above 50 indicates a positive outlook.
The profits component of the CPAOI has risen nine points to 69 since the first quarter. Revenue, expansion, employment, and other capital spending have also risen in each of the previous two quarters.
21% of surveyed companies report having too few employees and expect to hire more employees in the upcoming quarter, up from 15% in the first quarter and 18% in the third quarter of 2015. However, 13% of survey respondents said their companies had too many employees, the same as in the first quarter of this year and the highest percentage in the survey since the first quarter of 2010.
The survey measured the sentiment of 452 high-ranking finance professionals in business and industry— mainly CEOs, CFOs, and controllers—in nine areas: U.S. economic optimism, organization optimism, expansion plans, revenue, profits, employment, IT spending, training and development, and other capital spending.
Each component of the CPAOI is calculated by taking the percentage of respondents who indicated that their opinion or expectation for the metric is positive or increasing and adding to that half of the percentage of respondents indicating a neutral or no-change response.
For example, if 60% of respondents indicate an optimistic or very optimistic view and 20% express a neutral view, the calculation of the component indicator would be 70 (60% + [0.5 × 20%]).
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