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CCH® HR MANAGEMENT - 02/24/09

Expect bigger trouble ahead for job market in first quarter 2009, SHRM says

Nearly 75 percent of HR professionals across the country expect deep job cuts to continue throughout the first quarter of 2009, with 73 percent pessimistic about overall job growth in the United States, according to the first Labor Market Outlook (LMO) survey by the Society for Human Resource Management (SHRM), the 250,000-member association of human resources professionals.

"This report debuts at a time when many organizations are asking themselves if they will be in business through tomorrow, next week, next month, or next year", said Laurence G. O'Neil, SHRM president and CEO. "When difficult decisions like layoffs must be implemented, how exiting employees are treated has a direct impact on those left behind, and on the employer's ability to attract and retain talent later on. More than any other time in recent history, organizations need smart and sophisticated people policies."

The current recession is proving that no job is immune from being eliminated, the LMO data show. Of the companies that will cut positions in the first quarter, more than half (56 percent) of the respondents said those jobs will be managerial and professional positions. Another 43 percent said they will lay off hourly service workers, and 12 percent plan to cut senior executives as part of their downsizing.

Among the survey's other findings:

• Three out of four respondents will either keep their payrolls flat (55 percent) or conduct layoffs (21 percent) in the first quarter.
• Slightly more than a third (34 percent) of large companies with 500 or more employees will make cuts during the first quarter.
• More than half (54 percent) of the respondents said they are somewhat pessimistic about job growth and anticipate more job losses, while 19 percent are very pessimistic.
• Only 11 percent are somewhat optimistic that the first quarter will experience an increase in job growth.
• Regionally, the Northeast, with its high concentration of financial sector jobs, is the most pessimistic, with 82 percent of HR managers based there expressing pessimism ranging from somewhat to very pessimistic.
• HR professionals in the West report the lowest levels of pessimism (66 percent), followed by the Southeast (69 percent), and the Midwest (75 percent).

Although the outlook is bleak, not everyone is planning to eliminate jobs, and some of the respondents said they are pursuing payroll expansions in early 2009. Twenty-three percent of the HR respondents plan to hire in the first quarter of 2009.

On average, large employers (more than 500 employees) who plan to increase their staff intend to add 56.2 employees. Medium-size companies with 100 to 499 employees who expect to increase payroll plan to do so by 17.8 employees on average, and small employers with fewer than 100 workers who plan to hire, expect to do so by an average of 4.2 employees.

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