The US job market is likely to continue improving in 2006. The biggest job gains are expected to come in the financial services, technology, healthcare, energy and international business sectors, which together could create as many as 1.3 million new jobs next year.
A return to a late 1990s-style hiring frenzy may be only a matter of time. There is already soaring demand for the top talent, as evidenced by Google’s recent full-page ad in the Sunday New York Times business section, inviting ‘the brightest minds in sales management’ to apply for positions with the company.
Employers are adding jobs at a strong pace and there is no indication that this will weaken in the coming months. Employers have added more than 4 million jobs since November 2003 and more than 1.7 million jobs in this year alone.
Job creation is occurring at the high end of the pay scale, where employment in management, business and financial occupations has grown by 928,000 jobs since January. Since the beginning of 2005, employment among professional occupations has risen by 158,000 and the number of workers in sales occupations has jumped by 544,000.
Extra Help Wanted
Challenger’s annual forecast of the top job categories that employers will be clamoring to fill includes accountants, petroleum engineers, financial planners, physical therapists, computer support specialists, and international sales and marketing managers.
Overall, employers are on track to add about two million new workers this year, according to an analysis of Bureau of Labor Statistics figures. Several signs point toward continued hiring in 2006.
In a post-Hurricane Katrina survey by the Business Roundtable, 33 percent of chief executive officers from the nation’s largest corporations said they expected to increase their payrolls in the next six months. Another survey found that 66 percent of small and medium-sized companies – which employ the most Americans – plan to add employees in 2006. Furthermore, 66.5 percent of companies surveyed by the National Association of Colleges and Employers expect to hire more new college graduates in 2005-2006. The average hiring increase over 2004-2005 was 14.5 percent.
Business optimism was bolstered by the recent upward revision of third-quarter economic growth from 3.8 percent to 4.3 percent. The new annual growth rate is the fastest since the first quarter of 2004, despite high energy prices and two devastating hurricanes in the Gulf Coast region.
The hurricanes that threatened to damage the economy may ultimately become a major source of new growth. Even if housing slips in other areas of the country, construction will remain strong in the southeast as communities rebuild. The big obstacle right now, however, is the lack of people to fill those job openings.
The rebuilding efforts in the region will require engineers, construction workers, technology and telecommunications workers, electricians, plumbers, etc. Those who are willing to relocate will find a gold mine of opportunity.
Energy prices that spiked in 2005 are another factor that will drive job growth in 2006. Even with the price of energy and gasoline falling as the year comes to an end, the run-up in prices sparked a race to increase the nation’s capacity to find, extract and refine more oil and natural gas.
As a result of increased demand for energy, increased drilling and a wave of retirements, there is a resurgence in demand for petroleum engineers following a 15-year lull, according to Dr. Leonard F. Koederitz, a professor of petroleum engineering at the University of Missouri - Rolla.
The good news is that more students are answering the call. Enrollment in undergraduate petroleum engineering is up 46 percent nationwide since 2002, according to The Society of Petroleum Engineers. Even with the increase, however, demand is still outstripping supply when it comes to skilled workers.
Other areas seeking to expand payrolls may also have trouble finding skilled workers. If they cannot find the people, they may be forced to send the work overseas.
Electronic Data Systems Corp. just announced plans to double the number of jobs it outsources to foreign countries. Part of the rationale behind the decision is the lower cost of labor outside the US. EDS chief executive Michael Jordan told The Wall Street Journal that another significant factor is that the number of America’s new graduates with engineering and information-technology degrees is not keeping pace with demand.
The National Academy of Sciences recently reported that American universities graduated just 70,000 engineers in 2004, compared to 500,000 in China and 200,000 in India.
Math Adds Up to Opportunity
Those who enter the 2006 job market with math, science and other technology skills can write their own ticket. The key to success, however, is always keeping such skills up to date. Those who graduated ten years ago with degrees in computer engineering should not be surprised by the lack of job offers if they have not kept up with the rapid changes taking place in the field.
In addition to tech-related industries, healthcare fields will continue to see increased hiring in 2006. Healthcare employers have added about 233,000 jobs to their payrolls since January. Nurses remain in high demand, as do medical technicians, pharmacists and home care specialists. The biggest demand in 2006 and beyond could be for physical therapists, whose entry-level starting salaries range from $42,000 to $50,000, according to West Virginia University.
In the financial services sector, corporate accountants are hot commodities as companies try to traverse a flood of new accounting rules designed to prevent future Enron-like situations. Personal financial planners are also increasingly in demand as baby boomers prepare nest eggs for their impending retirements.
Other areas in the business world that will see job growth in 2006 include anything related to international trade and commerce. Sales and marketing executives specializing in international markets will be particularly sought after as American firms try to tap the growing populations of middle-class consumers in China and India.
No amount of protectionist measures will keep the global economy from burgeoning. The Internet has made sure of that. Those who embrace the change and adapt will reap the rewards of higher profits and increased job creation. Those who yield to pressure from isolationists will be left behind.