Modest improvement in employment prospects to accelerate in Q3

The modest improvement in job prospects observed through the first six months of 2010 will accelerate in the third quarter according to projections from 221 employers responding to BNA's latest quarterly employment survey. However, while reports of current layoffs and planned reductions-in-force are down from levels reported a year ago, there has been little change in these figures over the past two quarters.

Hiring:

• Twenty-two percent of surveyed employers plan to add production and service positions in the third quarter of 2010, up from the second quarter of this year (15 percent) and the third quarter of last year (14 percent). This uptick in planned hires is broadly based across employment sectors, with substantial increases in manufacturing (up 8 percentage points), non-manufacturing (up 7 percentage points) and non-business (up 5 percentage points).
• The proportion of employers planning to add technical and professional staff has increased from 19 percent one year ago to 22 percent in the second quarter of 2010, and to 27 percent in the third quarter of this year.
• Employment prospects are improving more slowly for office and clerical staff. Eleven percent of surveyed companies anticipate hiring in this category in the third quarter, up a modest 2 percent since last quarter, and 3 points higher than projections last year (8 percent).

Reductions in Force:

• Fewer employers plan to reduce the size of their labor force. Eight percent of surveyed employers plan to cut production and service staff in the third quarter, down from 10 percent projecting cuts in the second quarter, and 12 percent planning reductions-in-force one year ago.
• Six percent of employers will cut professional and technical positions next quarter, little changed from the 5 percent anticipating cuts in the second quarter of this year, but down 8 percentage points from the 14 percent that expected to trim their workforce in the third quarter of 2009.
• Reductions in office and clerical positions are expected at 8 percent, unchanged since the previous quarter but down sharply from the 17 percent projecting cuts in the third quarter of 2009.

Layoffs:

• Twenty-two percent of employers report production and service workers on layoff in the second quarter of this year, down 5 percentage points since the same period one year ago (27 percent) and but only a marginal 2-pont increase since last quarter (20 percent).
• Reports of technical and professional staff on layoff have declined from 20 percent of employers in the second quarter of 2009 to 14 percent in the second quarter of this year. There has been no change from last quarter.
• There has been a 9 percentage-point decline (from 24 percent to 15 percent) of employers reporting layoffs of office and clerical personnel from April and May of 2009 to April and May of this year, but no significant change since last quarter (14 percent).

Job Vacancies:

• The sharp decline in vacancies across all three employment categories from the first quarter of 2008 to the second quarter of 2009 appears to have stabilized.
• Compared with the same period one year earlier, employers report somewhat more difficulty filling professional and technical positions. In the second quarter of 2009, 29 percent of employers reported unfilled technical/professional slots. In the second quarter of this year, that figure climbed to 34 percent.
• During this comparable period, there has been little change in reported vacancies for production and service (from 7 percent to 8 percent) or office and clerical positions (from 3 percent to 4 percent). There has also been no appreciable change from the first to the second quarter of this year in reported vacancies in production and service (8 percent), office and clerical (from 2 percent to 4 percent) or professional and technical positions (from 35 to 34 percent).

BNA's survey of the employment outlook has been conducted quarterly since 1974. This report is based on responses from 221 human resource and employee relations executives representing a cross-section of U.S. employers, both public and private.