Summer Hiring Expected to Heat Up

U.S. businesses report strong hiring intentions, according to the latest ‘Employment Outlook Survey’ by ManpowerGroup. Let's go inside the latest forecast and see which sectors and regions are in growth mode. 

June 12, 2018 – U.S. employers are expecting hiring to pick up in the third quarter, with 24 percent of employers planning to add staff, according to the latest “Employment Outlook Survey,” released today by ManpowerGroup. Employers in all U.S. regions and industry sectors are looking for headcount to grow.

The upbeat forecast indicates that the uncertain political climate continues to have little effect on employer confidence. Of the more than 11,500 U.S. employers surveyed, 71 percent said they are expecting to maintain their headcounts, with just three percent forecasting workforce reductions.

Taking seasonal variations into account, the net employment outlook for the third quarter of 2018 was up 18 percent. This marked the 16th consecutive quarter with an outlook of plus-15 percent or stronger. Nationwide, hiring prospects were one percentage point stronger when compared with the same period last year.

“We continue to see double digit hiring outlooks across the country, including all four regions of the country, all 13 sectors of the economy and all of the 100 largest MSAs,” said Becky Frankiewicz, president of ManpowerGroup North America. “As the U.S. labor market edges closer to full capacity, we’re seeing rising demand for skilled workers especially in construction and retail distribution. With strong hiring intentions across all industries we’re seeing wider skills gaps so employers can no longer rely on a spot market for talent.”

“The best employers are beginning to invest in accelerated learning and development programs to grow their talent pipeline and working hard to bring in those on the edge of the labor market,” she said. “This concentrated focus on reskilling and upskilling is more critical than ever to fill the vacancies evident in today’s employment market.”

Hiring by Sector

Employers in all 13 national industry sectors said they expected to grow staffing levels during the third quarter of 2018: Leisure & hospitality (+27 percent), transportation & utilities (+22 percent), wholesale & retail trade (+22 percent), and professional & business services (+22 percent). Double digit hiring intentions are also reported in mining (+20 percent), construction (+19 percent), durable goods manufacturing (+19 percent), financial activities (+16 percent), nondurable goods manufacturing (+16 percent), education & health services (+14 percent), government (+14 percent), information (+13 percent), and other services (+11 percent).

Nationally, employers in the mining sector reported the strongest hiring pace in more than three years—the outlook for the sector improved moderately when compared with the second quarter of 2018. Slightly stronger hiring intentions were reported in the nondurable goods manufacturing and transportation & utilities industry sector comparisons sectors. In the construction sector, employers report a slight quarter-over-quarter improvement, and hiring plans are the strongest reported in more than 11 years.

Chart from Manpower Group Q3 2018 United States Employment Outlook Survey

Hiring by Region

Employers in all four regions in the U.S. showed a positive outlook. Employers in 25 percent of the Midwest businesses surveyed expected payrolls to grow in the third quarter of 2018, while two percent anticipated a decline in employment levels. Hiring plans in three Midwest industry sectors remained relatively stable when compared with the second quarter: Education & health services, durable goods manufacturing and nondurable goods manufacturing.

Related: 5 Employment Trends That Demand New Ways of Managing

Payroll gains were anticipated by 23 percent of Northeast businesses surveyed for the upcoming quarter, while three percent of employers expected a decline in staffing levels. Transportation & utilities sector employers in the Northeast reported moderately stronger hiring plans for the next three months, when compared with the previous quarter. Government sector employers in the region reported improved hiring prospects, with a slight quarter-over-quarter increase. Hiring intentions remained relatively stable in five of the Northeast’s 12 industry sectors in comparison with Q2: financial activities, information, leisure & hospitality, nondurable goods manufacturing and wholesale & retail.

Help Wanted! Companies Stepping Up Summer Hiring Plans
The summer job market is upon us and there’s good news: Companies are stepping up their seasonal hiring. Forty-one percent of employers plan to hire workers for the summer while a vast majority (88 percent) expect to transition some summer hires into permanent roles.

Staffing levels were expected to grow during the next three months by 24 percent of businesses surveyed in the South, with three percent of regional employers anticipating a decline in payrolls and 72 percent expecting no change. Nondurable goods manufacturing sector employers in the South reported a moderately stronger hiring climate in comparison with the second quarter, and hiring prospects were slightly stronger in four sectors: construction, other services, transportation & utilities and wholesale & retail trade.

In the West, 24 percent of businesses surveyed anticipated an increase in payrolls during the third quarter, while four percent expected staffing levels to decrease and 70 percent of employers expected no change. When compared with the second quarter, hiring plans were moderately stronger in the West’s transportation & utilities sector. Outlooks improved slightly for employers in four industry sectors: durable goods manufacturing, nondurable goods manufacturing, other services and professional & business services.

Graphic from ManpowerGroup Q3 2018 Employment Outlook Survey

Global Outlook

ManpowerGroup interviewed nearly 60,000 employers across 44 countries and territories to forecast labor market activity for the third quarter. All participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of September 2018 as compared to the current quarter?”

Related: HR Leaders Cite Retention and Turnover as Top Concerns in 2018

Third-quarter results indicated that, despite an uncertain geopolitical outlook, employer confidence remained mostly resilient across the globe. Payrolls were expected to grow by varying degrees in all countries and territories with the exception of Italy where the outlook was negative for the second consecutive quarter. A clear majority of employers polled indicated they will maintain or add to their workforces, and only a fraction planned to reduce payrolls. Examples of notable optimism included Finland where the outlook was the strongest reported since the country started the survey nearly six years ago, and in China where employers reported their most optimistic hiring plans in three years. Conversely, the forecast in Panama was the weakest reported since the survey was launched in 2010. And New Zealand’s forecast was the least optimistic reported since 2009.

Unemployment Rate Drops to 3.8 Percent
Employers added 223,000 jobs last month as the U.S. unemployment rate dropped to an 18-year low of 3.8 percent, according to the most recent U.S. Bureau of Labor Statistics report. The May gain is the 92nd consecutive month of job growth.

When compared to the prior quarter’s results, forecasts improved in 19 countries and territories, declined in 18 and remained unchanged in seven. A more favorable pattern emerged when forecasts were compared with last year at this time as hiring intentions improved in 24 countries, declined in only 12 and remained unchanged in seven. Globally, the strongest third-quarter hiring plans were reported in Japan, Croatia, Taiwan, Hungary and the United States. The weakest forecasts were reported in Italy, Panama and Spain.

Related: Bringing Today’s Candidates Into New Talent Pipelines

In the Europe, Middle East & Africa (EMEA) region workforce gains were forecast in 25 of 26 countries. Hiring plans improved in 12 countries quarter-over quarter, weakened in 10 and were unchanged in four. In a year-over-year comparison, outlooks improved in 13 countries, declined in six and were unchanged in six. Croatian employers reported the region’s strongest third-quarter hiring plans, and also shared with Japan the strongest hiring intentions worldwide. Italian employers reported the region’s weakest outlook and, as noted above, the only negative hiring intentions among the 44 countries and territories surveyed.

Payrolls were expected to grow in all eight Asia Pacific countries and territories. Net employment outlooks improved in five countries and territories when compared to the prior quarter, declined in two and were unchanged in one. In a year-over-year comparison the hiring pace was expected to improve in six countries and territories, declined in one and remained unchanged in one. Employers in Japan and Taiwan reported the region’s most optimistic forecasts, with the region’s weakest forecasts in New Zealand and Australia.

Positive outlooks were also reported in the 10 countries surveyed in the Americas. However, when compared to the April-June quarter, hiring confidence strengthened in only two countries, dipped in six and were unchanged in two. In the year-over-year comparison, hiring prospects improved in five countries and weakened in the remaining five. For the third consecutive quarter employers in the U.S. reported the strongest hiring plans in the Americas, while opportunities for job seekers were expected to be weakest in Panama and Brazil.

Related: CEO Confidence in the Economy at All-Time High

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media

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