Almanac of American Employers: research, trends, statistics, hiring at top employers, jobs, salaries.

Job seekers in 2006 will find a mixed hiring climate after a roaring 2005. Barring any economic catastrophes due to such continuing risks as terrorism strikes, energy shortages and natural disasters such as hurricanes, there should be a wide variety of excellent employment opportunities. The best news is that a select set of major companies will offer exceptional job opportunities during 2006. In addition, many firms will feel that strong growth in the U.S. economy in 2004-2005 encourages them to continue steady hiring in the first half of 2006.

Nonetheless, there are many negative factors that will restrain the job market—particularly in certain industries. To begin with, the continuing threat of terrorism and the strain and uncertainties of the war in Iraq will cause both consumers and the businesses that serve them to use caution. Compounding these factors are the sister hurricanes of 2005—Katrina and Rita, that threw hundreds of thousands of people out of their homes and out of work. Additionally, these hurricanes deepened an already difficult situation in extremely high energy prices. Structural changes will result. For example, consumers will finally give preference to energy-efficient homes, automobiles and appliances. Renewable energy sources will seem more and more appealing. Government, both at the state and federal level, will have a large role in the reconstruction of hurricane-ravaged communities and in mid-term changes in the way we produce, store and utilize energy.

In this period of challenges and opportunities, some companies will enjoy booming business. For example, it’s a terrific time to be in the business of oil field service and repair. Other employers will hire only limited numbers of employees, while some will continue to downsize due to a variety of factors. For example, manufacturing and certain types of service jobs that can be offshored will continue to move to factories in lower-cost nations like China and India. Some firms, such as traditional airlines, will continue to wrestle with structural problems and high fuel costs. Americans who find themselves on the market for a job will need to understand the changes surging through the economy in order to determine which companies to pursue and which to avoid.

Job seekers in 2006 will continue to hear a lot of conflicting and sometimes confusing information about the state of the job market and the state of the economy overall. In order to create a robust job market, corporate investment, profits, productivity and revenues must align themselves correctly. Fortunately, many of these economic indicators were positive during the 2004 to 2005 period, and millions of new jobs were created. The best news is that corporate profits and corporate investments in new equipment have grown, and productivity growth continued to be high. Job seekers will benefit greatly if these trends continue.

During 2006, chief executives will continue to find themselves under intense pressure to boost sales and profits while keeping their staffs lean. The uncertainty created by threats of terrorism and high energy costs will make corporate executives cautious. Meanwhile, corporations are enjoying the positive influence of modest interest rates, as well as a very positive financial market when trying to issue new stock offerings or attract business loans and venture capital.

Likewise, new MBA grads are meeting with a much higher rate of success in securing jobs upon graduation. Startups are once again finding doors open at venture capital offices, and startup funds are flowing at a reasonable rate. Firms that provide support and services for defense and homeland security will continue to prosper.

The trend of outsourcing temporary workers is still going strong. One result is that many people who would prefer to be hired as permanent employees will continue to work as temps instead. Other employees will find that their jobs have been eliminated because work has been outsourced to another firm, or workers have been hired in nations such as India at vastly lower cost. The U.S. employment market is evolving quickly, and job seekers must be both knowledgeable and nimble in order to position themselves to find promising careers.

Economic Factors Affecting the Job Market

Business Productivity: Productivity has been rising at desirable rates. That is, more business can be produced—whether it be goods or services—by utilizing fewer workers than before. This will be extremely beneficial to the U.S. economy in the long run, but it can hurt the job market over the short term. Productivity is boosted by new technologies, improved management methods and other factors. It can also receive a quick boost from restrained corporate hiring.

If rising productivity occurs along with rapidly rising sales and profits, then employees are likely to enjoy immediate benefits, and the job market will improve.

Corporate Sales: During 2005, corporate sales revenues were robust in many sectors—a very positive sign for employment. In particular, industries that had been hit extremely hard by the tech bust in 2000-2001 found business improving.

Corporate Profits: When profits increase sharply, companies are inclined to increase business investment and hiring. In most industries, corporate profitability took a considerable hit during much of 2001 and 2002. Fortunately, 2004 through 2005 generally saw steady growth in corporate profits as the economy rebounded. As a result, large numbers of new jobs were created during recent months and the national unemployment rate is extremely low (outside of hurricane-damaged areas).

The employment market during most of the 1990s was exceptionally strong. In April 2000, the unemployment rate dropped to 3.9%, a 30-year record low, and 24 million new jobs had been created in the U.S. during the then nine-year-long economic boom. (Like all boom times, the boom of the ‘90s finally came to a close; likewise the unprecedented job market and stock market wound down as well.) At the same time that the number of jobs ballooned, workplace efficiency increased at a rapid rate. U.S. business productivity climbed by an average rate of 2.9% each year from 1996 to 2000, nearly double the rate of 1.5% seen over the previous 20 years. Very strong productivity growth continued through 2004 and 2005.

By late 2001, as the tech boom tapered off, the unemployment rate shot up to 6%, representing just under 9 million people seeking jobs. The unemployment rate has improved and will likely stay between 5.0% and 6.0% for much of 2006. (This range is a favorable level of unemployment when compared to most of the past 60 years. The unemployment rate will be affected by the fact that many people will enter the job market for the first time, while others who have dropped out will reenter the market if they perceive that conditions and hiring are improving.) A large number of Baby Boomers are set to retire and leave the job market—this will make prospects even more promising for younger workers.

In order to compete effectively in today’s job market, one of the most important things you can do is arm yourself with knowledge. It is vital for the knowledgeable job seeker to use the best reference tools possible in order to seek out employers that offer a reasonable balance of financial stability coupled with opportunities for advancement and monetary incentives. Excellent job opportunities exist if you know where to look. Many of America’s most successful firms currently need multitudes of new employees.

For example, the booming firms that dominate the home repair, hardware and fixtures retail category, Home Depot and Lowe’s, each need to hire tens of thousands of people every year. Health care continues to create hundreds of thousands of new jobs yearly. Biotechnology leaders will greatly expand their businesses. Thousands of additional companies, in technical and non-technical sectors, will need large numbers of new hires. In particular, companies that offer products or services that save time and/or money will prosper—for example, discount retailers, along with companies that offer services that help businesses operate more efficiently. Meanwhile, large companies that are not increasing their overall numbers of employees will be hiring on a regular basis due to normal attrition—that is, the loss of employees due to retirement, relocation or other personal circumstances.

The Bureau of Labor Statistics forecasts that total U.S. employment will increase from about 150 million today to 165 million in 2012. This indicates that a total of 15 million jobs (of all types) will be added by 2012. Only about one-third of those jobs will be created by major employers, which means that much of this employment growth will stem from small to mid-size firms.