Pity the job analyst these days, whose predictions on the US jobs report each month have been woefully off—overestimating the number of new jobs by 150,000 in January and underestimating it by nearly the same amount for February. Many scratched their heads before the March report arrived Friday (the consensus prediction of 177,000 jobs added was 19,000 jobs too low this time).
But Korn Ferry’s own recruiting experts say that a majority of employers are still adding jobs. “January was a bit slow, but that was probably seasonal. February came roaring back, and March was strong too,” says Bill Sebra, global operating executive for Korn Ferry’s professional search and recruitment process outsourcing (RPO) businesses.
Indeed, some firms have underestimated how many people they need to hire, says Jeanne MacDonald, Korn Ferry’s president of RPO and professional search. That’s a change from only a couple of years ago, when firms would go on giant hiring binges. Organizations have become more conservative with their workforce planning over the last two years, MacDonald says, but so far many have wound up hiring more than they had originally planned.
The main areas where jobs have been growing, Sebra says, are healthcare, supply chain logistics, and information technology. The number of healthcare jobs grew by nearly 21,000 in February, according to the US Labor Department, and overall, the nation has more than 16.7 million people working in healthcare jobs, an increase of 393,000 over the last year. Sebra expects those trends to continue even if there’s a broader economic turndown. After all, as millions of baby boomers move into their mid-60s or older, they will need more doctors, nurses, and other healthcare professionals to keep them healthy.
US firms are also reorganizing their supply chains to get things more efficiently to market. Firms are recognizing that they need people with more digital skills to create and move goods quicker. While many of the new supply chain hires are replacing old jobs, on the whole the area is still increasing the number of roles.
But the biggest job-creating family is information technology. IT added 253,000 positions, the biggest one-month gain by this segment in more than three years. Many of those new IT jobs are going toward efforts to digitally transform businesses, including adding artificial intelligence to decision-making, cloud-computing capabilities, and other innovations.
The one question some leaders have posed recently about their IT efforts is timing, says Melissa Swift, a Korn Ferry senior client partner. Most leaders are sold on the long-term benefits of digital transformation, she says. But firms need to spend money upfront on people to build out all those systems. At the same time, firms need to keep people to run everything while the new systems get built. Some firms, she says, are worried about whether they will be taking on the big investment just as the economy turns a corner and revenues falter. “It’s a funky moment,” Swift says.
To be sure, there are signs that economic growth worldwide is slowing down. US manufacturers have been pessimistic on exporting more goods for six months. Even with the IT job splurge, the broader US economy added only 20,000 jobs in February (meaning the rest of the economy lost 230,000 jobs). Those IT jobs will still be needed, Sebra says, but adding them may come at the expense of other divisions. “The current models of these highly industrialized organizations won’t survive in the new digital world. They have to do the work,” he says.