October 7, 2010
Jeffrey A. Joerres, chairman and CEO of Manpower Inc., has a unique perspective on the nation’s employment situation. His firm recruits temporary, contract and permanent employees for companies around the world.
The recession took a toll on his business. When the total number of workers Manpower placed in jobs fell to 3 million last year, from 5 million in 2007, Joerres closed 10 percent of the company’s offices and thousands of employees lost their jobs. Manpower reported a loss for 2009 after revenues fell 26 percent from the year before. Its stock plunged 75 percent from its 2007 high to $23.75 early last year, although it has since risen to about $50.
Joerres, 50 years old, was born in Milwaukee, where Manpower is based, and joined the company 17 years ago, became CEO in 1999 and chairman in 2001. He spoke with The Fiscal Times last week about how the job market has changed and why full-time hiring is likely to be slower than in past recovery periods. Joerres is now counting on growth outside the U.S., where Manpower does 84 percent of its business. Here are some of his comments.
TFT: The unemployment rate in the U.S. was 9.6 percent in both August and September, even though the recession has officially ended. What would make you feel more confident about the future ?
A: I’d actually feel better if the unemployment figure were a lot higher. Some 17 percent of Americans are out of work. The 9.6 percent figure only indicates the percentage of people who are out of work and looking for jobs. If the official unemployment figure were higher, I’d know that more companies were hiring again and more people felt hopeful about finding jobs.
TFT: Temporary hiring is picking up. Do you expect more full-time jobs to follow?
A. Usually the lag between temporary and permanent hiring is seven to nine months, but it is likely to be longer this time. Back in 1992, when we were coming out of recession, companies started hiring as soon as economists declared an end to the recession -- in anticipation of demand recurring. But today [companies] have the tools to precisely track backlog and how much labor they need. They’ll only hire when they have real demand. I’m expecting slow job growth for the rest of this year and the first half of next year.
TFT: What are you hearing from different business sectors?
A: In technology, especially the services part of technology, at companies like IBM, Hewlett Packard and Accenture, I’m hearing [that] business customers are willing to spend money on software and hardware systems that give them efficiencies. Our own business in this sector is up 30 percent this year over last year’s levels, and even higher than in 2007.
In retail and consumer products, clients who produce luxury items, such as high-end perfumes and cosmetics, are hurting. Many of their traditional customers have learned to get along without luxury products. But the retailers who [offer] value, such as Wal-Mart, and consumer-products manufacturers which supply them, are seeing more demand and are doing some hiring -- from retail store clerks to back-office managers.
But where they used to need perhaps 100 people to run a big store, now they’re getting by with maybe 85 people.
TFT: Where are you now placing the most candidates?
A: So far this year, practically all our placements have been at manufacturing companies, especially at companies that make value-priced consumer goods or efficiency-saving products and equipment for businesses. Manufacturers know precisely how many people they need to make a product, and they’re hiring accordingly. Companies that need office workers and professionals can’t measure their needs so precisely and can hold off hiring by stretching their current staffs to do more. Only in the last month and a half have we seen gains in office hiring.
TFT: Are you seeing differences in hiring prospects for men versus women?
A: African-American men, especially young men, have been most devastated by the recession. White men have been very hard hit. Certainly women have suffered job losses, but they’re also getting hired in places where they weren’t previously employed. In light manufacturing, for instance, women are getting hired to assemble circuit boards for $ 11 to $14 an hour.
TFT: How was Manpower affected by the economic downturn?
A: From 2007 to 2009, we went from 33,000 employees to 28,000 worldwide. In the last year we’ve hired back about 2,000 employees. Our business is very cyclical and at the depths of the recession new business was down 50 percent. We made a decision not to cut staff that much.
TFT: Do you ever get criticism about the name of your company?
A: I would have said to the founders when they started the company in 1948, “Don’t name it Manpower.” Fifty percent of our executive team is female and sometimes we joke that we just need one more point and we’re changing the name to Womanpower.
TFT: What advice would you give your children and other college-bound kids about choosing a major?
A: There’s a need for people with very specific skills. If you have the chance and desire to study engineering or nursing, for instance, you increase your chances of getting a job after college. If you’re a history major, you might want to add some technical courses (in computer science or math or marketing) to your studies. In the past, companies took the best and the brightest and gave them management training, but many of those programs don’t exist anymore.
My daughter is studying architecture and interior design and I think she has a better chance of getting a job when she graduates than a liberal arts major.