Analysis of the BLS Employment Situation Report

Management and Professional unemployment falls from 4.6 down to 4.2% year over year. Or to look at it another way in these ranks employment has risen from 95.4% to 95.8%!

MRINetwork Analysis of the BLS Employment Situation Report December 2011 Employment The full report can be seen here: http://www.bls.gov/news.release/empsit.htm. Total U.S. employment grew by 200,000 positions in December, while the unemployment rate fell from an adjusted 8.7 to 8.5 percent. Government payrolls lost just 12,000 positions over the month, though the total is down 280,000 from a year ago. A falling unemployment rate can occasionally report false positives - which could have happened last month - when the number of unemployed people counted is reduced because discouraged workers having not looked for work in the preceding month. In December’s figures, however, the number of people who have searched for a job in the previous 12 months, but not in the last four weeks, actually declined both sequentially and year-over-year. Similarly, the workforce participation rate remained unchanged at 64 percent. All in all, what appear to be positive top line numbers don’t seem to have any significant underlying red flags observed in a number of reports throughout 2011. Transportation and warehousing positions rose by 50,000, with four-fifths of those coming from seasonally high employment in the courier and messenger industry. This would include the likes of FedEx and UPS, but not the U.S. Postal Service, which also added 2,600 positions. Retail trade added 28,000 positions led by general merchandise and clothing stores. They were countered, though, by a loss of 10,200 jobs by sporting goods, hobby, book, and music stores, likely the result of the continued closing of the Borders Books and Music chain. Other industries that saw gains included food service and drinking places, healthcare, manufacturing, and mining. Professional and business services, after adding an average of more than 40,000 jobs per month for most of the year, slowed during November and December, adding just 19,000 and 12,000 jobs respectively. While such employers do often complete critical hires during these months, total hiring will slow down due to holidays and vacations. Year-over-year, the management and professional and related occupation unemployment rate fell from 4.6 to 4.2 percent. The number of people employed in such positions rose by 1.1 million from a year ago, representing the lion’s share of the 1.5 million positions created in the workforce overall. A significant portion of the jobs created in December came from industries likely to be impacted by the holiday shopping season - jobs that are temporary by nature. However, the level at which this hiring took place indicates an increased confidence from these employers, likely because of what they were seeing in their business. Should this confidence carry over to the rest of the economy, other professional services and manufacturing businesses should, hypothetically, see similar boosts in the coming quarter. Stan Taylor, CSAM, 877-695-4688, ext 112, staylor@mrvancouver.com

Dec 2011 First Friday Preview

December 2011 • • • • • • • • • • • • • • • • • Featured ArticleReaching Top Talent as a Path to Growth Notable Global Events Spotlight on Latin America Region Proves Read for More Stable Growth Spotlight on WashingtonDiverse Industries Show Strength, Set Stage for Growth • • • • • • • • • • • • • • • • • • • • • • • • • • •   Featured Article Reaching Top Talent as a Path to Growth The recession and broader economic slowdown have given business leaders the cover they need to make sweeping changes to their business structures. For some, it has meant sending core processes overseas, for others, it has meant investing in technology that would automate tasks once carried out by humans.  It’s why in the depths of the recession, economic output per hour worked actually skyrocketed, growing at over 5 percent for more than a year. After a decade of lightning-speed technological advancements, the recession was a well-placed opportunity for businesses in almost every sector to look for ways to streamline their processes and improve efficiency. It allowed many companies to mitigate the impact of the recession on their bottom lines. Yet, the law of diminishing returns means these methods will only work for so long. Eventually, growth will need to come from growth. “You would be hard pressed to find a company that has managed long-term growth without investment. That investment normally needs to begin with human capital,” says Rob Romaine, president of MRINetwork. “After a deep recession that affects people at every level, trying to expand through increasing workloads can be counterproductive as employees are pushed past their tipping point, leading to increased turnover.” New hires intended for growth, however, can be some of the most difficult. As a company expands laterally, or even horizontally, new positions with unique qualifications become necessary. Existing in-house recruiting pipelines can often fall short of meeting the demand of new pools of candidates required. When an organization creates a new position, it calls for a very different type of candidate than if the position was already in existence. Finding the types of candidates ready to take on such a task frequently, if not exclusively, requires reaching deep into the workforce of current and would-be competitors to find people who can not only do the job, but define the job. “The type of top talent you want to recruit aren’t going to answer the phone when a competitor calls them - much less be actively applying to job openings - automatically screening out some of the best new staff you could bring aboard,” notes Romaine. “That exact same candidate though, will likely not only take a call from an industry recruiter; they may already be working with one.” Acting as a third party, an industry recruiter can work with hiring managers not only to create what the job description for a new role might look like, but also help them understand what types of candidates are already in the passive candidate market. They can map out a search strategy to identify, screen, and eventually recruit the correct person. “The most effective employees are almost by definition the most engaged. They are invested in their jobs and aren’t actively considering other employment. But it’s also not going to stop them from taking a look when an opportunity arises,” says Romaine. “In recessions and boom times, these passive candidates end up being the most consistently successful and effective hires a company can make.” For companies that have already made all the easy fixes to productivity, growth in a sluggish 2012 economy may only be found through investing in growing workforces and recruiting top passive candidates. Notable Global Events European unemployment rose rapidly in October, reaching 9.8 percent in the EU27 and 10.3 percent in the EA17, surpassing its previous highs early in 2010. The Japanese Statistics Bureau has begun again reporting employment figures for the entire country, no longer excluding those regions worst hit by the March 11 earthquake and tsunami. Total unemployment has actually fallen from 4.7 percent at the time of the disasters to 4.1 percent in September. Spotlight on Latin America Region Proves Ready for More Stable Growth As the world has undergone the worst global recession since at least the Great Depression, Latin America’s economy has moved almost in the opposite direction. This has really just been the extension of nearly two decades of improvement in the quality of life in the region. Over the last few years, extraction of natural resources, including coal and precious metals, from throughout Central and South America has helped to fuel those economies while their North American and European trading partners entered recession. Brazil alone has become a leading provider of iron ore, gold, and natural gas, selling much of its products to Asia. But the influx of cash into the Brazilian economy while the world was still in recession put Brazil on a dangerous path toward inflation. The Brazilian Central Bank tried to tighten available credit by raising its benchmark SELIC interest rate as high as 12.5 percent. While the bank states it would like to see a 4.5 percent rate of inflation, it is expected to end 2011 with a rate of nearly 6.5 percent. Now, the economy has started to slow, and it is estimated to grow just 3.1 percent in 2012 while meeting its 4.5 percent inflation target. The slowing economy has caused the bank to reverse course in recent months, cutting the SELIC 100 basis points since August in the hope of giving the economy a “soft landing.” Other Latin American countries that had also been raising interest rates have stopped in recent months, and are now considering cuts as well. “Latin America has seen its fair share of hyperinflation over the last few decades,” notes Carlos Rivera, Managing Director of MRINetwork Global Search, an MRINetwork affiliate in Mexico City. “Should monetary policy continue to succeed as it appears to be, this could help to relieve many of the negative stereotypes about Latin American economies, allowing for more confident foreign investment.” Argentina, Chile, Brazil, Bolivia and Peru all saw hyperinflation in the 1970s, 80s, and 90s. In 1990, Brazil’s annual rate of inflation rose more than 30,000 percent and didn’t reach a comparably tame 16 percent growth rate until 1996. Latin America is well-positioned to become the economic powerhouse of the 21st century with a combined GDP of more than 6 trillion US dollars. If Latin America were a unified economy, it would be the fourth largest behind the U.S., the EU and China. But unlike China, Latin America remains mineral-rich, and unlike the EU, it has only two predominant languages. “Multiple Latin American countries have seen their currency risk hyperinflation, but a successful recovery will change the way companies look at doing business in Latin America,” notes Rivera. “A more stable path going into the next decade will mean substantial rewards for companies who enter the marketplace and gain market share today.” Spotlight on Washington State Diverse Industries Show Strength, Set Stage for Growth Foundational technology, military, biotech, alcohol; there are not many industries as fundamentally in demand as these - and all four have a growing presence in Washington State. Seattle is the birthplace of modern computing as much as Silicon Valley ever was.  But while Silicon Valley is most well-known for cranking out high-flying, consumer-facing technology, Seattle has a more subdued record of producing technology products that have deeply engrained customers. Microsoft may not be around forever, but with 94 percent of new computers each year being shipped with the Windows operating system, the Redmond-based software behemoth isn’t going anywhere soon. Seattle’s own Amazon.com, which started as a simple online bookstore, has exploded as an online retailer of just about anything imaginable, and now provides the backbone for an immeasurable number of both retail and technology companies. But as Len Holmes, managing partner of The Lakewood Group, an MRINetwork affiliate outside Tacoma, notes, technology is just one slice of Washington State’s growing pie. As part of the 2005 Base Realignment and Closure Commission’s plan, Washington became home to one of the first U.S. military bases under the joint jurisdiction of both the Army and the Air Force. Joint Base Lewis-McChord combines two once-neighboring bases and shares their resources. The joint base is able to find efficiencies, theoretically reducing its economic impact. Units, equipment, and personnel from nearby closed military bases have been relocating to Lewis-McChord, providing a strong economic boon to the region. While the state’s biotechnology firms may be outshone to a degree by its consumer technology companies, that industry added more than $10 billion to the economy in 2010 and managed to grow its workforce nearly 9 percent from the beginning of the recession in 2007 to the first quarter of 2011. “Lingering questions over the state of healthcare legislation have recently put a damper on Washington’s enthusiastic biotechnology growth - specifically in the medical devices sector,” says Holmes, “Companies are being cautious about adding headcount as long as uncertainty remains.” Yet, such companies aren’t seeing their businesses shrink. In fact, they are holding onto cash that could fuel rapid growth once the industry’s future becomes clearer. Rounding out the state’s economic diversity is a rapidly growing wine business. Over the last two decades, the total acreage devoted to wine making has grown from 11,100 acres to more than 40,000, while the number of wineries grew from less than 80 to more than 700. In fact, nearly 200 new wineries have opened in Washington State since the beginning of the recession. “There are some very bright spots in Washington’s economy right now, but overall I don’t think we are feeling that buzz yet,” notes Holmes. “What we are seeing is a strong foundation of diverse sectors which are continuing to survive. Once the national economy picks up speed, they will be able to feed off of each other to start building again.”

Stan Taylor, CSAM 877-695-4688

Happy Holidays & a Prosperous New Year,

Warmest Thoughts for 2012, Stan Taylor, CSAM Certified Senior Account Manager, Banking and Finance Manager MANAGEMENT RECRUITERS OF VANCOUVER, LLC 700 Washington St., Suite 508 Vancouver, WA 98660 USA tel: 360-695-4688, ext 112 toll free: 877-695-4688 ext. 112 cell: 360-281-0880 fax 360-695-4384 staylor@mrvancouver.com                To View animated card: http://www.mrinetwork.com/holidaycard/10is/

Sterling Financial to Buy First Independent Bank

Posted on: November 7th, 2011

Thomas H. Lee and Warburg Pincus


Sterling Financial Corp., which is backed by Warbug Pincus and Thomas H. Lee Partners, said Monday that it would buy First Independent Bank to boost its presence in Portland and Vancouver in the U.S. Pacific Northwest, Reuters reported. Under the terms of agreement, Sterling Savings Bank would initially pay a premium of $8 million to the net value of the acquired assets and assumed liabilities of the 100-year-old bank, Reuters wrote.


(Reuters) - Sterling Financial Corp said its unit has agreed to buy First Independent Bank to boost its presence in Portland and Vancouver in the U.S. Pacific Northwest.

Under the terms of agreement, Sterling Savings Bank would initially pay a premium of $8 million to the net value of the acquired assets and assumed liabilities of the 100-year-old bank.

Sterling will also pay a premium of up to $17 million over 18 months after the deal closes, on the basis of credit performance of the acquired loans.

First Independent will retain about $49 million of existing loans and $34 million of other assets identified by Sterling, which will take over all of the community banker’s deposits.

This acquisition will add to Sterling’s existing franchise about $691 million in principally core deposits and $455 million of assets under management.

“We expect these product enhancements will not only be a source of additional non-interest revenue, but also provide significant benefits with both customer acquisition and retention,” Sterling Chief Executive Greg Seibly said.

The transaction is expected to be completed in early 2012 and add to Sterling’s full-year earnings per share.

Last year Sterling Bank undertook a massive recapitalization, which included capital infusions of $171 million each from Warbug Pincus and Thomas H. Lee Partners .

Private equity firms often invest in weak banks, boost their capital levels and then use the banks as a base to consolidate other lenders in the region.

Shares of Sterling Financial were trading at $15.15 in the morning trade on Nasdaq on Monday.

Posted on: http://www.pehub.com/125165/sterling-financial-to-buy-first-independent-bank/

Stan Taylor, CSAM
360-695-4688, ext 112
staylor@mrvancouver.com

The Door Is Opening and People Are Leaving

Posted By Kevin Wheeler On July 6, 2011 @ 5:22 am In Advice and How-To's

There is going to be an exodus of workers soon from businesses all across the U.S. It seems that for all the work recruiters do at the front end, organizations are undoing it at the backend. Frustrated employees are seeking new opportunities in record numbers, but if you are prepared, your talent shortages may be over.


Earlier this week, Mercer released its What’s Working survey that found that “one in two U.S. employees [are] looking to leave or [have] checked out on the job.” Other surveys support these findings, including ones by Right Management.

Is this simply the grass-is-greener syndrome, or is there something else going on? Even though there are plenty of jobs for certain types of people — Amazon is adding 5,000 people, and McDonald’s, Google, Facebook, Microsoft, and Apple are just a few others that have announced fairly large hiring plans — we are not actually out of this recession, and changing jobs is a risky business.

While money and benefits are not the primary reason people leave their employers in normal times, these times are very different.

This recession has lingered longer than most and is impacting a generation of workers who have not suffered much from recessions in the past. Their tolerance is different, and so are their expectations.

Today I think there are four primary drivers of these rather frightening statistics. And these same reasons will eventually drive away the new people you recruit as well, unless you are candid and realistic right up front with the candidates.

The first driver is actually pay this time. For many employees it has been a long time since they have gotten much in the way of a pay increase. The recession is often used as a reason for not granting reasonable increases, and managers have been more focused on performance — of lack of performance as a way to hold down these increases.

Yet, employees see their organizations making good profits and in some cases even record profits. Corporate coffers are flush with cash, yet this has not translated into significant pay increases. At the same time, option grants have shrunk due to changes in how they are taxed, giving some employees even less reason to stay.

Employees perceive a unfairness in how they are paid compared to how firms are profiting.

Second, and not completely separated from pay, is the amount of work that is being asked of employees. Many people I speak with are really doing what two or more would have done prior to this recession. Managers have asked for more and gotten it as employees fear there are few other jobs.

Yet the perception about jobs is changing, and many are starting to make a move if for no other reason than to lessen their workload or find a more flexible employer.

A third growing issue is the attitude younger workers, especially those in the Gen Y category, have about work. They feel their personal freedom is threatened by restrictive social media polices. And they are unhappy with the unwillingness of many firms to allow flexible working hours. They are also inclined to want open, authentic cultures and this recession has caused firms to tighten up communications, keep more secrets, and allow much less open discussion. This is all negative to the younger folks who will seek out more open and flexible environments.

A fourth element is lack of development. Many surveys have pointed out that Gen Y in particular, but all of us at some time, want to take on new responsibilities and learn new skills. During the recession organizations cut back on training and limited development opportunities. In some cases when development was available no one could take advantage oif it because of high-demand work requirements that left no time available. This has resulted in frustrated and bored employees who are looking for a change.

In reality, it’s not hard to see why these surveys are showing a potentially devastating amount of turnover about to happen.

I also realize that while there may not be a lot you can do about these things; there are always creative tactics that can help. Here are some thoughts.

First of all, make internal mobility the most important thing you focus on. Helping employees find new positions may be the best and most direct way you can influence them to stay. Yet, most organizations either erect numerous bureaucratic hurdles that make moving around tough, or they simply do not offer any simple way for an employee to learn about possibilities.

The intranet or some other internal website should be designed so that employees can learn about open positions and can apply for those positions. Work with HR to take down barriers and make it as easy to move between positions as it is to move outside the firm. This probably means that many current practices will have to change. Organizations with low turnover generally follow several rules that guide the internal application and transfer process.

1.Employees should be able to interview for new positions without permission from anyone.

2.They should not have to complete any sort of application form, and resumes should be very simple, if used at all.

3.They should be able to leave their current position within a maximum of two weeks after accepting another offer — even if their old position has not been filled.

4.Salaries offered should be similar to those an external hire would receive.

Second, help hiring managers reposition jobs to match the available skills rather than seek out only those who are perfect fits.

Don’t go for the exact match. Encourage hiring managers to be more open to giving internal candidates an opportunity. Exact matching is expensive and pays little in return. No one is good enough at predicting what the exact set of skills are going to be for every project and job. Hiring internal people with basic qualifications is often the better decision as these people not only bring enthusiasm and freshness, but also fit the culture. Recruiters need to encourage managers to experiment and realize that most of us are not doing the exact job we were trained to do or even the work our degrees prepared us for.

And, finally, be open with potential candidates about what’s going on in the company.

When you set realistic expectations up front, you lessen the disillusionment that will come after the new hire starts. Strive for authenticity. Encourage them to talk to employees who are happy and engaged. Make sure candidates are good culture fits and that they are fully informed about the work they are going to be expected to do.

Working with the hiring managers is key to success, as talent shortages are partly caused by lack of imagination. Jobs can be tailored to fit candidates, job descriptions can be changed, and managers can be flexible. It takes negotiating with them and providing them information about what’s going on. Turnover may happen, but you may be able to lessen its impact or bring in new people better fitted to your culture.

tags: retention

Analysis of the BLS Employment Situation Report - Private Industry adds 83,000 Jobs.

MRINetwork Analysis of the BLS Employment Situation Report May 2011 Employment The full report can be seen here: http://www.bls.gov/news.release/empsit.htm. This morning, the Labor Department reported U.S. unemployment rose from 9 to 9.1 percent in May while adding 54,000 non-farm jobs. Local governments shed 28,000 positions during the month while private industry added 83,000. The federal and state governments combined to cut just 1,000 positions during the month. Professional and technical services added the lion’s share of positions, tacking on 40,000 new jobs — most notably in accounting and bookkeeping (+17,800) and computer systems design and related services (+8,200). Temporary help services were mostly unchanged. The remaining job gains mostly came from health care (+27,200) which has added jobs throughout the recession.  Other sectors experienced very mild growth or losses, most so small as to be not statistically significant. The management, professional, and related occupations unemployment rate fell from 4.5 to 4.4 percent year over year while the four-year degree unemployment rate was down from 4.4 to 4.3 percent over the same period. These numbers are an aberration from what has been seen since the beginning of the year, yet they seem to be supported by other recent readings. The Purchasing Managers’ Index fell from 60.4 to 53.5 percent in May and the ADP Employment Report saw job growth fall from 177,000 in April to 38,000 in May. These other reports make it impossible to dismiss the Labor Department’s figures. However, there is reason to think May was an exception, and not a change in momentum. Some economists point to the supply chain disruptions resulting from March’s Japanese earthquake and tsunami hitting U.S. manufacturing in May.  The Manufacturing sector lost 5,000 jobs during the month—not a significant decrease from the 11.7 million person manufacturing workforce—its first loss in six months.  After today’s numbers, the U.S. remains on track to add between 1.5 and 2 million jobs during the year in total. With the disaster in Japan, continued skittishness in Europe over sovereign debts and heated unrest in the Middle East, May’s modest growth seems more an indicator of the resilience, rather than the fragility, of the U.S. economy.

Bank CFOs: Pink Slips At The Ready If Revenues Come Up Short

By Matthew Monks, American Banker
June 9, 2011
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In banking, the phrase "expense reduction" is often a euphemism for "layoffs."

The chief financial officers of Comerica Inc. and Huntington Bancshares Inc. avoided the L-word when speaking to investors on Wednesday but said their institutions are prepared to cut workers if revenue stays weak or the economy gets worse.

Both are hoping to avoid layoffs by attracting new customers: Comerica, of Dallas, is in the midst of buying a rival Texas bank. Huntington, of Columbus, Ohio, is keeping branches open longer and spending heavily to advertise its no-new-fees approach to banking.

But mounting pressure to cut costs means both are ready to send out pink slips if growth does not materialize.

Roughly "60% of expenses are people," Beth Acton, the chief financial officer of the $55 billion-asset Comerica, said at a New York investor conference sponsored by Deutsche Bank. "That's the key driver of what you can do to really impact the bottom line."

Donald Kimble, the CFO of the $53 billion-asset Huntington, said new employees represent a substantial proportion of the "incremental investments" that it has flexibility in "adjusting." Payroll costs — like its advertising budget — can be cut swiftly, he said.

"The investments we have been making for the most part have been in variable costs, whether it's traditional marketing dollars or head count," Kimble said. "I think those adjustments can be made within a quarter. So I think it is something that can be managed very efficiently and [be] very timely."

Comerica and Huntington are in similar positions in terms of spending. They are among a class of banks committed to investing to promote expansion, even if in the short term it causes expenses to trend higher than many investors would like.

Last quarter, Comerica was spending about 69 cents for every dollar of revenue; Huntington, about 65 cents per dollar of revenue. Those expense-per-dollar ratios are high compared with other large and midsize banks. Wells Fargo & Co.'s, for instance, is about 63 cents.

Investors pay close attention to expense-to-revenue ratios because they indicate how efficient an institution is at making money. Banks can improve the figure by cutting costs, increasing revenue or both.

"What happens in many large companies, particularly financial services companies, when they just focus on cost … it makes the relationship with the customer worse," said Jim Rowe, investor relations director at Wells Fargo. "It affects their ability to raise revenue, and we're not going to do that," he said.

Wells recently launched a cost-cutting initiative but has not shared many details.

The company did not mention layoffs on Wednesday, though it said last month that it was in the midst of letting go of several thousand mortgage specialists amid the housing downturn. In addition, the $400 million to $500 million Wells is spending per quarter to integrate the former Wachovia Corp. should decline by the first quarter of next year, Rowe said. Wells had 270,200 full- and part-time workers at the end of last quarter, up about 2,800 from a year earlier.

Comerica sees cost-saving and revenue-generating opportunities in its pending acquisition of Sterling Bancshares Inc. of Houston, Acton said.

It will consolidate some back-office functions and gain access to more clients for Comerica's treasury and wealth advisory services, she said.

Comerica's biggest tool for cutting costs has been layoffs, Acton said. A 17% head count reduction in the three years through 2010 enabled the bank to hold expenses steady despite increases in merit pay and rising regulatory costs, she said.

It had 8,955 full-time employees as of last quarter, 260 fewer than a year earlier.

Comerica has found it can earn just as much revenue with fewer people and is not planning to hire as the economy rebounds. Instead, a double-dip could lead to more staff cuts, Acton said.

Huntington had about 11,300 employees at the end of last quarter. That is about 641 more than a year earlier.