By Matt Ferguson, CEO of CareerBuilder
The U.S. economy experienced its share of ups and downs in 2013. Yet as the year comes to a close, the economy is showing signs of improvement that should continue into 2014. The housing sector is rebounding, the stock market has hit new highs, consumer spending is up and unemployment is at its lowest in five years. Even with these positive indicators, the debt issues in Washington will continue to play a role in impeding a more accelerated jobs recovery.
Employers are cautiously optimistic that 2014 will bring a stronger job market, but they aren’t ready to commit to upping their staff until the outcomes of debt negotiations and other issues affecting economic expansion are clearer. While we’ll need to wait until these issues are resolved to know the full impact they’ll have on employers’ hiring plans in the New Year, job seekers should pay attention to the following seven trends shaping the 2014 job market, identified in CareerBuilder’s annual job forecast.
1. Full-time, permanent hiring stalled
The uncertainties surrounding the debt ceiling will cause employers to be more guarded in their plans to hire permanent staff in 2014. Twenty-four percent of employers expect to hire full-time, permanent workers – down from 26 percent last year – yet one in ten is still undecided about recruitment plans. Nearly one in four employers will hire at a slower rate or will hold off on headcount expansion until the debt ceiling is resolved in the first quarter.
Sales will lead the way in positions employers will most need to fill in the New Year, with 30 percent of hiring managers planning to recruit full-time, permanent employees for sales-related roles. Information technology is close behind, at 29 percent, followed by customer service (25 percent), production (24 percent), administrative (22 percent), engineering (17 percent), marketing (17 percent), business development (17 percent), accounting/finance (15 percent), research/development (13 percent) and human resources (10 percent).
2. Companies relying on temporary and contract hiring
A trend that has been growing post-recession is for companies to turn to contract and temporary help to meet their hiring needs. This allows them to have flexibility in their workforce, so that as market demands change, they can dial up or dial down staffing as needed. Forty-two percent of employers plan to hire temporary or contract workers in 2014, up from 40 percent last year. Of these employers, 43 percent plan to transition some temporary employees into full-time, permanent members of their staff.
3. Part-time hiring on the rise
Companies will also rely more on part-time employees in the New Year. Seventeen percent of employers expect to recruit part-time workers over the next 12 months, up three percentage points over last year. While various factors will influence this trend, 12 percent of all employers stated that they will likely hire more part-time workers in 2014 due to the Affordable Care Act.
4. STEM occupations continue to grow
As the U.S. continues on its path of economic recovery, there are certain occupations that will be a driving force behind the rebuilding and strengthening of our economy. The technological innovations, new products and discoveries that come from STEM (science, technology, engineering and math) occupations help fuel economic growth and keep the U.S. competitive in a global marketplace. These occupations, which have been a major focus in the past several years, will continue to remain center stage, with more than one in four employers (26 percent) planning to create jobs in these areas over the next 12 months.
5. Skills gap widening
While the growth of high-skill, specialized occupations is a positive sign for the economy, human resources managers are struggling to keep up with the demand to fill these jobs. Looking at a subset of HR managers, 51 percent said they currently have positions for which they can’t find qualified candidates. Forty-six percent said these positions go unfilled for three months or longer.
Companies have come to realize that if they wait for the perfect candidate, he or she may never come, so they’re putting more emphasis on training and development to help shrink the widening skills gap. Nearly half (49 percent) of employers plan to train people who don’t have experience in their industry or field and hire them in 2014, up 10 percentage points over last year. Twenty-six percent of employers are sending current employees back to school to get an advanced degree – and covering all or some of the expense.
6. More companies “onshoring” jobs
The U.S. government has strongly supported initiatives to bring jobs back to America as a way to spur U.S. growth. It looks as though the push for more “onshoring” is proving fruitful: 23 percent of companies who offshore jobs said they brought some of those jobs back to the U.S. in 2013. What’s more, 26 percent plan to do so in the next 12 months, indicating that this is not just a passing trend.
7. Compensation more competitive for specialized and in-demand positions
In order for companies to find and retain the best talent, they’ll need to offer competitive compensation, especially for in-demand or hard-to-fill positions. Sales and IT – the top two positions companies plan to hire for in the New Year – are also where employers expect to provide the biggest salary increases. When it comes to high-skill roles, 26 percent of employers plan to raise starting salaries for these specialized positions in 2014.
Looking across positions within an organization, 73 percent of employers expect to increase compensation for existing employees – on par with last year – while 49 percent will offer higher starting salaries for new employees – up from 47 percent last year.
Employers are continuing to proceed with caution with their hiring plans as they head into 2014. Yet, as the economic issues plaguing Washington play out over the next few months and employers find their footing, there is greater potential for the average monthly job creation in 2014 to exceed that of 2013.