Salaries Growing But Slowly

The Staffing View
On business, the workplace and employee relations
February, 2012


Micro Tech's Featured Job Openings for February
Java Engineer, Waltham, MA
Salary: $100,000
Our client, a software company, seeks a mid-to-senior level Java engineer Candidates should have experience with Web technologies including HTML, CSS, and JavaScript, as well as some database knowledge

2nd Shift Maintenance Supervisor, Raleigh, NC
Salary: $30 per hour
Candidates must be capable to run diagnostics on CNC machines and run PLCs and have a solid understanding of pneumatics and hydraulics Minimum of eight years of maintenance and supervisor experience required

Mechanical Assembler, Nashua, NH
Salary: $14-$16 per hour
Candidates should have the ability to use hand and pneumatic tools, read prints and schematics, work on prototype builds, and perform in-process inspection on subassemblies

HR Director, Portland, ME
Salary: $55,000 to $70,000
Growing engineering/architectural/construction company is seeking to build its HR department Company has never had an experienced HR person in the company (roughly 35-50 people) Ideal candidate will join leadership team and will be responsible for building the HR department from the ground up Responsibilities include developing policies and procedures including employee hand book; handle employee relations; retention and succession planning; benefits administration; creation of HR budget; all hiring (from recruitment through orientation) HR director will also be involved in strategic direction of company on all HR matters; oversee management of worker's comp claims; participate in some safety training and some vendor negotiation Ideal candidate will come from the A/E/C industries

Slower Salary Growth in Massachusetts
Conflicting data isn't unusual when the economy is still in a slow-growth recovery and especially following a recession as traumatic as the downturn of 2007-2009 But for jobseekers and people who are employed - temporary or permanent - the variable indicators can make it difficult to get a fix on the labor front

Though Massachusetts' unemployment rate is well below the national average and the state has been among the fastest to recover from the economic recession, employers in the state aren't ready to take the lead when it comes to raising pay, according to a survey from the Associated Industries of Massachusetts

The AIM Human Resources Practices Report, released last month, found that companies in Massachusetts are planning on smaller salary increases in 2012 than employers generally across the nation According to AIM, firms in the commonwealth expect their budgets for salaries to increase 253 percent to 28 percent this year That compares to a range of 292 percent to 301 percent according to a recent compensation survey by Culpepper & Associates, a compensation research concern

The survey noted that while Bay State employers are keeping their pay raises below the national average, most are feeling good about the economy More than two-thirds of the 368 participants queried said that business conditions are good-to-excellent In December the unemployment rate in Massachusetts was 68 percent, well below the national rate of 85 percent for the same month

Yet even as they say they feel good about the economy, they're cutting jobs In December the state lost 6,000 jobs, according state records, while revised data also showed that employers only added about 300 new jobs in December, compared to initial estimates of 5,000

The mixture of good stats with bad indicates how employers are moving cautiously Typically at this point in a recovery many would like to add personnel to meet growing demand or raise salaries to retain valued employees But they aren't convinced the recovery is strong enough to justify such expenses Escalating costs for health-care coverage add to the uncertainty

"Companies are trying to create human resource strategies that make them the employer of choice in a hiring market that is substantially more competitive than it has been over the past several years, while at the same time dealing with an economy that continues to put financial pressure on the business community," said Sandy Reynolds, Executive Vice President of the Employers' Resource Group at AIM

The conflicting economic figures actually reflect a slowdown in the Massachusetts economy that the University of Massachusetts reported late last month The UMass quarterly journal MassBenchmarks said that the state's economy grew at a 23 percent annual rate in the final three months of 2011, down from 32 percent in the third quarter Thanks to strong growth in the technology sector, the state added about 40,000 jobs during the first half of 2011, the report said But hiring in the second half was flat

States Rolling Back Higher Education Spending
When a corporation is looking for a new location to cite a manufacturing or distribution center that could create hundreds of new jobs, it runs down a checklist of requirements The state and local tax environment often tops the list, but one-step behind is the availability of skilled labor If the new facility needs hundreds of workers will the immediate labor pool deep enough to meet the company's needs?

Despite that priority many cash-strapped states have been forced to slash their budgets following the recession and slow-growth recovery, including spending on higher education An annual study of state spending on higher education finds that state appropriations for colleges and students sunk by 76 percent in 2011-12, the largest such decline in at least a half century

The joint study conducted by the Illinois State University Center for the Study of Higher Education and the State Higher Education Executive Officers, found that all but nine states saw a decline from their 2010-11 totals Topping the list was New Hampshire, which reduced its budget by 41 percent year-to-year But other states in our service area made some healthy cuts as well Virginia was down 147 percent, according to the report, Georgia went down by 115 percent and New York was off 71 percent Massachusetts was off 53 percent, Maine fell 21 percent and North Carolina a slight 1 percent Rhode Island, a state that had a severe budget shortfall and high unemployment during the recession, actually had a year-to-year increase of 131 percent, according to the study

The declines were caused mostly by the depletion of federal funds from the 2009 stimulus legislation, according to the report, known as the "Grapevine" study It states that the exhaustion of those federal funds left many state higher education systems in "significantly worse shape" than they were in before the economic downturn began In all 29 states allocated less money to higher education in 2011-12 than they did in 2006-7, and nearly half -- 14 -- provided at least 10 percent less than they did five years ago

During the past 25 years many states developed public-private investment programs focused on public - as well as private - colleges and universities State legislatures were authorizing public funds to attract matching private dollars to benefit the state's economy The idea was to boost employment and develop industry clusters in fast growing sectors such as information technology and biotechnology Funding new programs in the colleges would help to produce more graduates on those fields Touting those investments was one way that state economic development officials would compete against other states when trying to attract companies to expand or relocate within their borders

How much a state's competitiveness will suffer as a result of its cuts will depend on how they're applied in each state And cuts to colleges could be offset by other advantages a state has vs its competitors New Hampshire may have cut its spending by far than its neighbors, but it can boast that it does not impose a personal income tax or a general sales tax

Super Bowl Forecasting
Amid the hoopla of football fans and the creativity of Super Bowl television ads is a bit of folklore that ties the stock market - and jobseekers - to the outcome of pro football's championship game Legend has it that if a team from the original National Football League wins the Super Bowl the stock market will finish up for the year Given that stocks are often considered a leading economic indicator, that's good news for the economy as well

But that folklore did not hold up when the New York Giants and the New England Patriots met in the Super Bowl in February of 2008 The Giants, one of the original NFL teams, beat the Patriots in an historic upset But more upsetting was the credit crisis that was sending the economy into recession at that point and causing the S&P 500 to finish 2008 down 38 percent

This year there are other Super Bowl signs to suggest that the economy might do well in 2012 During the depths of the 2007-2009 recession the high-priced Super Bowl ad slots were slow to move and many long-time advertisers decided to sit the game out But this year ad sales have been strong and traditional advertisers are back in the fold Ad space for the Super Bowl on NBC reportedly sold out in November at a record price of $35 million per 30-second spot, up 13 percent over last year

Last year the Green Bay Packers, an original NFL team, won the Super Bowl, but the S&P 500 finished essentially even for 2011 In 2012 the S&P 500 is expected to rise about 7 percent, according to a survey of investment strategists and money managers by CNNMoney In a USA Today survey of economists, most of those queried predicted double-digit gains for the stock market with the average stock up more than 10 percent

If that's the case, jobseekers who are also New England Patriots fans are off the hook They can root for their team without worrying about jinxing the stock market, the economy and their job prospects