Burnison: Real Deterrent to Hiring is Top Line Demand, Not Health Care Reform


The year 2010 was not a stellar year for job creation, and while the United States is back on the road to recovery, a big question mark hangs over the jobs market.

Since May of 2009, unemployment has been above 9 percent — and, by some estimates, the actual unemployment rate has been nearly fifty percent higher.

To get a pulse check on job creation, I decided to ask Gary Burnison, CEO of Korn/Ferry the world's largest executive recruiting firm, if 2011 will be the year for jobs.

LL: Which sectors will be hiring in 2011?

GB: We need to look at demand in the global labor market through a different lens than we have in the past. Rather than focus only on sectors, it is important to look at regions. It’s clear that we’re experiencing a multi-speed recovery in the labor market — global vs. local and skilled vs. unskilled.

For those who lead global enterprises, the proverbial glass is half full and continuing to fill. These companies are investing and hiring and expanding. Others are innovating to capture consumer interest in global markets. Growth is moving west to east, north to south, and developed to emerging.

Today, the world’s hiring axis has tilted and the compass spins in all directions.

LL: What industries are scaling back?

GB: Organizations that have traditionally relied more on western economies for growth are not necessarily scaling back, but they will definitely be more subdued in their hiring in the year ahead, still relying on temporary workers.

These businesses need the “great consumer” to start spending again. The United States, for example, has traditionally counted on growth from its domestic market, which accounted for much of the world's middle-class population. This trend will shift over the next 20 years, with two-thirds of the world's middle class residing in Asia.

When that happens, other countries will have significantly more influence. Organizations that are positioning themselves to tap the tidal shift in global consumerism will be doing the vast majority of hiring. Those that are not will continue to be more cautious and tepid in their approach to hiring.

LL: What jobs are hot in 2011?

GB: Continued recovery in the financial system cascades to other industries as confidence is restored and tight credit is eased somewhat. In 2010, we saw a strong rebound in the asset management, capital markets, investment banking and consumer banking sectors, and this trend should continue in the new year.

There is also healthy demand for executives in energy and industrial services. In technology, like many other sectors, business activity and interest in hiring is stronger in emerging markets than in more developed ones. Opportunities focused on content, commerce, connected devices and services are particularly strong and growing fast. In life sciences, biotech and medical device hiring is more robust.

Broadly speaking, workers with knowledge-based skills, including professional and technical services, will be sought after in 2011.

LL: Do you expect the jobs picture to get better now that the Bush Tax Cuts have been passed?

GB: Whether the tax cuts will stimulate growth and hiring is up for debate. More than anything, for hiring to increase, global organizations need economic certainty and stability. American CEOs are looking for signs of increased sales and growth.

Right now we are in the middle of a virtuous circle or vicious cycle, depending on how you want to look at it. Out of income comes spending, out of spending comes jobs, out of jobs comes more spending.

The good news is American businesses alone are sitting on a cash stash of $3 trillion.

LL: Will health care reform be a deterrent on hiring?

GB: Here again the real deterrent to hiring is top line demand, not health care reform. Having said that, what needs to be clarified now is what employers, particularly small businesses, can expect in terms of costs related to health care coverage for employees. At the same time, many executives I’ve talked to are concerned about the overall cost of health care in this country, which amounts to 16.5 percent of GDP and is projected to reach 18 to 20 percent — a level that this country cannot afford.

Bottom line, any impact health care reform could have on hiring is still a ways off. The one thing that is certain though is that the cost will be passed onto the consumer.

LL: Will the jobs picture be better for college graduates?

GB: Today’s graduates are walking into a job market that has seen more than 8 million jobs leave since the recession began. Almost 30 percent of households have at least one member who is unemployed and looking for a job. The United States is losing $3 billion a day, and for every $3 collected in revenue, $4 is paid out in expenses. On top of this, turmoil in the stock market has delayed retirement for many baby boomers, who are holding onto their jobs longer than expected.

It’s tough out there for recent college graduates. They clearly have some significant obstacles that have not been seen for more than a decade.

But while there are those who say we are at great risk of losing the younger generation of talent, I am not one of them. I am confident that the global macro-economy will soon find its true north, and the war for talent will continue to rage — from the most senior levels to those just entering the workforce. College graduates have vital and relevant skills — along with energy and passion — that are critical to fueling the labor market engine for years to come.


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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."