Employers in major U.S. cities cautiously optimistic about 2013 hiring plans

By Brent Rasmussen, president, CareerBuilder North America

As the economy continues its slow but steady growth, employers across the country are following suit in their approach to hiring. From coast to coast, companies are hiring more workers, while still remaining cautious as they see how 2013 unfolds.

To gain a better understanding of hiring trends in major U.S. cities, CareerBuilder polled hiring managers and workers in Boston, Chicago, Dallas, Los Angeles, New York and Washington, D.C. All but L.A. are predicted to experience job growth this year, with L.A. expecting to see little change in hiring from the year prior. 

Dallas and Washington, D.C. expect the most growth
When it comes to full-time, permanent hiring, employers in Washington, D.C. and Dallas are the most optimistic, with both cities anticipating more hiring and less downsizing than last year. Thirty-nine percent of Washington, D.C. employers expect to hire full-time, permanent employees in 2013, up from 30 percent last year, while 6 percent plan to decrease headcount, down from 9 percent last year. Twenty-four percent of Dallas employers expect to hire full-time, permanent workers in 2013, up from 20 percent last year. Six percent plan to decrease headcount, down from 11 percent in 2012. 

Chicago, Boston and New York employers are being more conservative in their hiring predictions, as both job openings and job losses are on the rise. Hiring in L.A. will remain fairly stable from both a hiring and headcount reduction perspective.

• In Chicago, 34 percent of hiring managers plan to hire workers in 2013, up from 18 percent a year prior. Eight percent plan to decrease headcount, up from 5 percent last year. 
• Thirty-one percent of Boston companies expect to hire employees in 2013, up from 30 percent last year, while 13 percent plan to decrease staff, up from 6 percent in 2012. 
• Twenty-one percent of New York hiring managers predict that they’ll hire new workers, up from 20 percent in 2012. Fourteen percent plan to decrease headcount, up from 10 percent last year.
• Twenty-two percent of employers in L.A. plan to add workers in 2013, little changed from 2012 (24 percent). Eleven percent plan to shrink their staff, up from 10 percent a year prior.

Temporary and contract hiring plans vary
Employers often turn to temporary or contract hiring to meet market demands, especially when they are cautious about making major hiring commitments. This is evident in Washington, D.C., New York, L.A., Dallas and Chicago, all of which are seeing an increase in temporary and contract hiring.

• Washington, D.C.: Forty-nine percent of employers plan to hire temporary and contract workers in 2013, up significantly from 39 percent last year.
• New York: Forty-seven percent plan to hire temporary and contract workers, up from 45 percent in 2012. 
• L.A.: Forty-six percent are planning on hiring temporary and contract workers, up from 39 percent a year prior.
• Dallas: Forty-three percent expect to hire temporary and contract workers this year, up from 41 percent last year. 
• Chicago: Forty percent plan to hire temporary and contract workers in 2013, up from 33 percent in 2012.
• Boston: Thirty-seven percent expect to hire temporary and contract workers, down from 45 percent a year prior.

Underemployment an issue across the U.S.
During the recession, some workers who were struggling to find employment were forced to take jobs for which they were overqualified. As the economy recovers and more opportunities become available, some workers will look to jump ship.

In Boston,47 percent of employees report feeling underemployed, and 14 percent say they plan to switch jobs in the coming year. Forty-three percent of Chicago workers feel underemployed, with 14 percent planning to switch jobs in 2013. In L.A., 41 percent report being underemployed, and 17 percent plan to find a new job. Thirty-six percent of New York employees feel underemployed, and 14 percent plan to seek alternative employment in the coming year. Thirty-five percent of Dallas workers are experiencing underemployment, and 18 percent will consider switching jobs this year.

Yet, it’s not always lack of opportunity or professional growth that causes workers to seek employment elsewhere. Interestingly, Washington, D.C. has the least amount of workers feeling underemployed (27 percent), yet it has the most workers planning to switch jobs in the coming year (20 percent). Perhaps this is a result of the city’s increasingly healthy job market and the ability for top performers to find better opportunities.

Compensation increasing in effort to attract and retain top talent
Employers in Washington, D.C. (48 percent), Chicago (47 percent) and Dallas (45 percent) are the most concerned about losing their best workers in 2013. In response, many companies in those cities have taken measures to strengthen employee retention post-recession — 37 percent of companies report doing so in Washington, D.C., 40 percent in Chicago and 41 percent in Dallas.

When it comes to recruiting new workers, employers across the country are facing challenges. As companies begin to hire more aggressively, they’re having trouble finding workers who are qualified for the open positions. This is because there is an increasing number of areas where demand for skilled positions is growing much faster than the supply.

While companies may take varying approaches to address these hiring issues — internal training, additional perks, etc. — most agree that compensation must be increased in order to recruit and retain the best workers.

• Washington, D.C.: Seventy-three percent of employers plan to increase wages for existing workers — up from 69 percent last year, while 47 percent of hiring managers will offer higher starting salaries for new employees — up significantly from 39 percent a year prior.  
• Chicago: Seventy-three percent plan to increase compensation for current employees — up from 62 percent last year. Forty-eight percent will offer higher starting salaries for new employees — up significantly from 33 percent in 2012.  
• Dallas: Seventy-four percent plan to increase compensation for existing employees — up from 56 percent last year, while 50 percent will offer higher starting salaries for new employees — up considerably from 29 percent last year. 
• New York: Sixty-nine percent plan to increase compensation for current workers, which is up from 64 percent last year. Forty-six percent will offer higher starting salaries for new workers, up significantly from 34 percent a year prior.
• L.A.: Sixty-nine percent anticipate increasing pay for existing employees, up from 57 percent in 2012. Forty-five percent plan to increase salaries for initial job offers, up from 23 percent last year.
• Boston: Seventy percent plan to increase compensation for existing employees — up from 61 percent last year, while 50 percent will offer higher starting salaries for new workers — up significantly from 39 percent last year. 

Brent Rasmussen is president of CareerBuilder North America. An accomplished strategist and industry veteran, Rasmussen heads day-to-day operations, driving the innovation, expansion and ongoing revenue growth of CareerBuilder.com — the U.S.’s largest online job site — and CareerBuilder Canada.