Saturday, August 06, 2005

Some Support for "Crazy Al"

I often wish I was an economist so that when the Feds release the jobs numbers I could guess right along with the rest of the forecasters. When the numbers were released on Friday and showed job growth of +207,000 and they said it was slightly above expectations, we were certainly pleased, but not really surprised.

While we don't have the resources of the BLS, in our own space where we deal in the world of executive jobs and executive careers, we would have told the media to take it easy and to stop trying to make it sound like it is such a horse race every month, and besides, they are looking at and reporting on what has happened in the past (i.e. last month). We think it is just as much fun, and sometimes more exciting to try and see what's coming.

For the past several years, we have been having some fun trying to forecast what's coming, by looking at what the recruiting folks think is coming down the pike in 3 months and what they think the future looks like 6 months out. We call it the Recruiters Confidence Index.

In July our RCI for the 6 month outlook was at a 75% confidence level versus 54% in July of last year, and 27% way back in May of 2003. The 3 month RCI was at a 74% confidence level in July versus only 37% just a year ago. Our take in looking at how these two leading indicators are coming together suggests that recruiters are getting more and more calls on immediate assignments and lots of talk of more by year end. All good signs going forward.

While the recruiting world has a bit of a reputation for being overly optimistic sometimes, we also are able to measure if the results support the forecasts, which is to say we can see if the words translate into real openings. The short story is that our job postings are up 26% thus far this year and we don't see anything on the horizon that would slow that down. Recruiters felt they would see assignments go up 14% in the first half of the year, and continue to look for double digits for the last half as well.

As Federal Reserve Chairman Alan Greenspan gets ready to retire from his current gig, and as he starts to maybe chat with the likes of Spencer Stuart, Heidrick & Struggles, Russell Reynolds, etc. he, as well as other executives who are looking to make a change, should feel comfortable that the market has definitely changed and the outlook is strong. We don't think it is a question of if executive employment will increase, but how fast. The "lull" in the War for Talent is over and our bet is that it will continue to pick up.

As to inflation, we'll leave that to the guy Don Imus calls "Crazy Al."

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