As businesses are announcing layoffs and consumers are counting their dollars more closely, it is a sure bet that more central New Jerseyans are turning to staffing agencies to find jobs.
Nicole Magalhaes, area director of New Jersey-South for Adecco, has been with the company for 14 years and as is responsible for business development and service delivery in the central New Jersey marketplace. Adecco, which has seven offices in northern and central New Jersey, including ones on Rockingham Row and on Nottingham Way in Hamilton, is a full service staffing organization that places permanent, temporary-to-permanent, and temporary associates through three divisions: technical, which places engineers and scientists for hourly pay ranging from about $15 to $60 per hour; medical, which places doctors and nurses for hourly pay as high as $110; and general staffing, which places unskilled, light industry, administrative assistants, financial analysts, and low-level accountants, with hourly pay ranging from $9 to $30.
The good news. Magalhaes has observed a downward trend in usage from her financial customers, which the economic crisis has hit very directly. She also sees less business from consumer product companies, which are suffering from the 33-percent downturn in the retail market over the past year. By contrast, she has seen stability and even some growth in healthcare, biotech, and pharmaceuticals — although the growth in pharma depends largely on their pipelines and the timing of new product releases.
Adecco is also seeing blue collar workers affected, particularly among fulfillment workers in distribution centers that are sending out fewer packages to retail chains.
Magalhaes has seen some businesses moving out of New Jersey, mostly because of the costs of doing business. On the other hand, in Mercer County businesses are still moving in — both warehouses in the Cranbury and Monroe areas and healthcare and biotechs around Princeton. “Those are the industries we’re seeing growth in,” she says. She explains that as the baby boomers are aging, the population needing healthcare has grown: “Regardless of the recession, people always need their meds and always need care. Not every single company is growing, but if you look at it as an industry, it is an industry that is growing.”
The bad news. To temper any optimism she is expressing, however, Magalhaes says, “I think everyone will have cutbacks going into 2009,” citing in particular construction and housing and the financial sector.
As far as Adecco’s own regional business, says Magalhaes, it has been basically flat, not growing as it was one or two years ago. Magalhaes attributes its stability to a combination of upswings in some industries and downsizing that, while cutting permanent staff, is increasing temporary usage.
Magalhaes has not yet seen a large influx of applicants into Adecco’s branches, which she attributes to three factors: packages for laid-off employees that extend through year end; people getting unemployment squared away before seeking jobs; and the holiday season. But that will change. “We are forecasting an increase in the first quarter,” she says. “In January to March we expect to see an increase of applicants coming through the branches’ doors.”
The changing market. Although Magalhaes has not seen a change in the percentage of individuals seeking higher-level jobs, the raw numbers are increasing. This group is facing the fact that unemployment — which has been extended to a full year — will not be sufficient to maintain their standard of living. The maximum payout, which may be enough for unskilled, lower-level employees, and which she estimates at 70 percent of recipients, is not sufficient for people who have been earning over $50,000 per year.
These college graduates, some who have been with their companies for 10 years, may be collecting unemployment for the first time, in the face of their first job losses, she says. “We have positions, but we don’t have a hundred thousand jobs for these folks,” Magalhaes explains. Adecco is doing its best to help out this population, but they are in a situation “completely foreign to them” — “most have never temped, they are out of sorts, and the dollars are difficult to get to.”
One option is to sign on as a temp. “They are looking to get in, in hopes of working there full time,” she says, “and we expect to see more of that in the next 90 days.”
Companies may not hire permanent staff in the first and second quarters of 2009, she suggests, because they are waiting to see what happens after Barack Obama is inaugurated. This offers job seekers a step in the door. “Everyone is waiting, but projects still need to be done,” says Magalhaes, adding that 90 percent of temp companies allow temps to post for internal positions without any payment to the agency.
Insurance issues. Because Adecco offers medical and dental insurance from day one, with an option to add families, Magalhaes has been hearing from many temporary associates about spouses or partners who have lost their permanent jobs and the family cannot afford COBRA. “I have seen much more of that in the past 90 days,” says Magalhaes, “and I assume I will see a lot more.”
The college graduate problem. Another problem on the horizon, which has not yet hit is the new college graduates who will be flooding the market come May. They will be competing with experienced people who are willing to take the same money because they don’t have jobs, explains Magalhaes. “It will be more difficult for new college graduates to find positions because they are going to be going against people they wouldn’t have gone against in past years.”
Sean Malady is vice president of sales and marketing for the 36-year-old J&J Staffing, a family-owned, generalist agency with seven offices in central and southern Jersey, two in eastern Pennsylvania, and one in Delaware. The staffing industry, he explains, is usually 6 to 12 months ahead of the curve, and his company has been feeling the effects of the current economic downturn for two years.
The trends Malady has seen have mirrored the trends in national companies. His first observation, that the recession is affecting all business sectors, contradicts Magalhaes’s experience of growth in some industries. “In most other downturns, some segments have not been affected at all,” he says. “This one seems to be across the board, and I can’t think of any industry that is not tighter.”
Another difference he has seen in this downturn is that positions at all levels have been affected. Malady observes, “There have been downturns where we were seeing mid-level managers and down affected, but this one has been pretty much across the board. We have had people of all levels come to us, from business owners down to part time.”
More good news? J&J Staffing has begun to see some positive signs over the last two months. “Some companies are putting out feelers, and we are gaining some new clients,” he says. “We’re hoping that after the first of the year, if we can get some consistency in the market, we will see some positive hiring signs.”
What Malady has sensed in particular over the last couple of months is more urgency from clients. When he sends over resumes, he finds that the more lackadaisical approach of prior years has been replaced by quicker responses. Rather than slowing down the process by asking for extra resumes, he sees companies making offers more quickly. “When someone has a sense of urgency, you know they need that person and have to assume their business needs a person and needs them to fill a role somewhere,” he says. “A sense of urgency tells us that clients have real business needs that need to get done.”
One area to keep an eye on in the new year, suggests Malady, is temporary employment, because although temps are usually the first to be let go when things go bad, they are the first to be brought back once things bottom out.
More bad news? Despite these potentially positive signs, Malady sees most companies focusing right now on bills and collections, saving wherever they can. “Even J&J Staffing is looking for every single possible way we can save, whether it is $20 or $20,000,” he says, “and we think every company out there is doing the same thing.”
Malady is also seeing some restructuring of the positions being offered, as an increase in applicants and decrease in the number of positions has created an employer’s market. “They can afford to be more selective in this type of an economy,” says Malady. “Just as when you go to Walmart and buy a big screen TV and want to pay less for it, employers understand that they can pay less for higher quality.” Malady adds that paying less may not mean something as straightforward as lowering the salary, but instead adding additional responsibilities at the same pay.
Lights out? Not quite. But Malady emphasizes that even if there are more people than jobs, he has open positions and employers are searching for qualified applicants. “There is never a day that, even in today’s economy, we turn our lights out and shut the doors at 5 and have all the jobs filled,” he says. “It’s finding the right person, with the right mix of skills and business culture — the things that make a person fit well in a company.” From a business perspective, then, is it easier to find a qualified person? “Yes,” he says, “but it is still a challenge to find that good, perfect fit.”
“More and more companies are not drowning, but they are not going anywhere,” says Malady. “They are treading water, holding onto everything they have and not trying to make increases or major changes, just trying to get through now.”