Toyjobs posted its third best year out of twenty-six for 2007. It was a crazy and confusing period. With 2006 being our second best year coupled with 2006 toy sales being up 4 to 5 percent (rather than the usual down 4 or 5%) I figured we would start strong in 2007, but that’s not the way it happened. There were not a lot of toy company jobs available in the early going and in fact our sales were only at about fifty percent of normal through the end of June.
August brought not only the beginning of toy safety recalls but toy company hiring exploded. I would have thought with toy recalls, the housing market meltdown, the sub prime crisis and weak retail sales, that hiring would be subdued, but the frenzy continued until the very last day of the year. After twenty six years as a toy recruiter, I am usually able to divine some sort of rhyme or reason between toy industry conditions, the economy and hiring trends but I can’t even begin to fake an explanation for what went down in 2007. When hiring conditions were ripe, no one was hiring and when things looked their bleakest, companies were filling toy jobs hand over fist. It’s not that companies began hiring a raft of product safety people either. Toy companies were too busy fixing the crisis at hand. It was only after Thanksgiving that we started receiving a lot of calls from toy companies about hiring product safety professionals for the next manufacturing cycle.
Toyjobs is approaching 2008 with caution. With the exception of Walmart (up 8.4%) and Costco (up 10%), total December sales were pretty poor across the board. Costs continue to skyrocket. We still have high oil, resin and transportation prices. Add to this, rising wages and fuel riots in China, not to mention the rising yuan. Chinese factories are demanding 10-30 percent increases to manufacture goods. Although I have often heard “everyone’s costs are rising, so retailers will be compelled to let us raise prices”, I haven’t believed a word of it. Retailers have forced prices down for the past ten years even as costs continued to rise. Prices need to correct but retailers aren’t letting it fully happen. The toy industry executives I have been speaking with tell me that they are getting increases of 5-8 percent. With Chinese factories either standing firm or going out of business in ever increasing numbers, that means the extra cost increases will likely come out of US toy company margins. To their credit, I have spoken with several toy industry executives who have been walking away from potential business because of onerous pricing or terms (something we have long practiced at Toyjobs). Unfortunately, there will always be some genius who will sell product at a loss and try to make it up in volume. He may not last long but there seems to always be another bozo to take his place.
For 2008 there will be winners and losers and about half the companies I’ve talked with are gung ho while the other half are pulling in their horns. If I look at late December and January search starts, Toyjobs is up over our historical averages, so we are starting 2008 strong even as the press and the pundits are trying to talk the country into a recession.
I used to be able to explain everything but for now I’m just going to work hard and not plan any overexuberant spending either professionally or personally. Look for me to start shooting my mouth off when I’ve figured it all out again.
See you in February,
All the best,
Tom
