The U.S. economy added jobs at a steady pace in July as job growth has had its strongest six-month stretch since 2006. Confusingly, the headline unemployment number (U-3) actually ticked up from 6.1 to 6.2%. This was largely because more people re-entered the workforce. Typically, a lot of people “leave the workforce” or stop looking for work during the summer months as well as during the holidays. This summer the hiring environment has been strong enough that a lot of people took themselves off the sidelines and got back into the job hunt.
A variety of talking heads have been spending a lot of time bemoaning the lack of solid wage gains. As someone who has spent three decades in the employment business, I can tell you that wage growth accelerates as the labor market tightens but there can be a considerable lag time. During the economic downturn employers held the upper hand in compensation negotiations. People were desperate to hold on to their jobs or to land a new one if they were unemployed. The perception (and fervent wishes) of employers is that this is still the case. There is a dialectic effect where perceived negotiation power swings between employers and employees and there is almost always a lag time of a year or two before the group holding that power realizes and admits that it is waning and even then they fight like hell to retain it. Today the process hasn’t even begun because while the employment picture is consistently strengthening we are nowhere near the tightened labor market.
There are two interesting asterisks of note in the U.S. employment story. The first is U-6 which includes part time workers who would prefer a full time job and workers who aren’t actually looking for work but would take a job if it was offered to them. U-6 has remained stubbornly above 12%. This reflects a lot of people engaged in consulting (there are certainly a lot of them in the toy business) as well as a lot of companies who need more pairs of hands but are not yet confident enough to commit to them as full time employees. Some of this also reflects the deleterious effect of Obamacare with businesses fighting to keep their employees under a thirty hour work week which would qualify them as “full time.”
The second asterisk is that it is widely unreported that the “white collar” population holding a college degree enjoys only a 3.1% unemployment rate while for those without a high school diploma the rate skyrockets to 9.6%.
Focusing on the toy industry, hiring continues to be robust. For most of my thirty plus years, after an early summer slow down there would be an abrupt jump in search starts in late August. This coincided with goods being shipped to retailers’ warehouses. An order can change for almost any reason but once the pallet is on the retailers’ fork lift, manufacturers begin to feel like they’re on more solid ground. At the same time, senior execs returning from vacation would be jolted into the awareness that the following years sales season would begin in Dallas in about a month’s time. If they wanted to make adjustments to their sales staff they needed to begin looking at that immediately.
Last year … that didn’t happen. Retailers for the most part were a gloomy and pessimistic bunch. They were keeping inventories tight and bringing in goods as late as possible. The usual late August jump in search starts didn’t come. In fact, September was completely dead. Then, when goods finally did ship in very late September, all hell broke loose and manufacturers began hiring like crazy through the end of the year.
This year, like flipping a switch, Toyjobs phones started ringing off the hook with Sales searches during the last week of July and first week of August. Something had changed, but what? The retail environment certainly has not been all that good. Several of my clients have told me that this year retailers have planned to receive goods in a much more orderly fashion. After tracking the sales of small initial orders that arrived in June, they are bringing goods in stages rather than all at once. This allows the retailer to better control inventories and, in theory, allows the manufacturer to better control how much product they make. Of course, the lead times are still too short so that doesn’t really help manufacturers as much as advertised. In any event, this practice shortens the manufacturers sweat and fingernail biting period and they seem willing to start their sales searches soon enough to actually complete them by the Dallas Fall Toy Preview.
So, you may ask, “If there are so many sales searches why aren’t they posted on your job board?” That’s a good question and there are really two reasons. First, we like to get most of our candidate gathering work done before we post our searches. This is because part of our job is to evaluate search candidates against each other and focus our clients attention on those that we think fits their particular opportunity the best. This saves them time and effort. They like that. In order to facilitate this we like to have the bulk of our candidate selection done before everyone starts raising their hands. That way once people start contacting us about a posting we are better able to see where they fit in that searches candidate pool.
The second reason is for purely competitive purposes. There are a couple of recruiters out there who don’t have much in the way of a client base or repeat business. The reason for this is that they spend endless amounts of time and energy puffing on and on about how great they are but have a pretty poor track record when it comes to actually fulfilling searches. With a lot of time on their hands these recruiters continuously eyeball our job board and they try to worm their way into the search process. Since all of our searches are exclusive to Toyjobs, that rarely happens but it can be very disruptive to both our clients and candidates.
So there you have it. At the current time toy companies are aggressively looking for Sales Execs. Toyjobs is working on a large number of Sales searches. Look for them to pop up on our job board in the coming weeks. In the meantime, you very well might be hearing from us about a search that we haven’t posted yet.
Enjoy the rest of the summer!!
Tom Keoughan
