Open job postings drop from a year ago among region's largest employersIs hiring starting to slow down in the Pittsburgh region?
A recent survey of the region’s largest employers appears to indicate that this may, in fact, be the case, at least for the time being. Over the years, the Business Times has queried the 50 largest employers in the Pittsburgh region to gauge the hiring needs of the area. This data is meant to get a sense of the total number of open positions in the region among these employers by analyzing some of their most common job listings. In some cases, employers provided information themselves, but in most cases, the employment data was pulled from the online job listings on the company’s own websites. |
This year, there were 9,945 local job openings among the largest employers, down from 12,189 in July 2018. That’s an 18 percent decline year-over-year, according to the analysis, and of the 50 employers analyzed, 26 had fewer local openings posted than the same time a year ago; 21 had more openings.
The decrease is apparent across many industries, including banking, manufacturing and hospitality. And it includes both local and national chains
A slowdown in job growth
What’s unknown is what caused the drop, but economic experts and state data support the notion that job growth may be slowing.
Gus Faucher, a senior vice president and chief economist at PNC Financial Services Group Inc., said while growth has remained steady, in service-providing industries like accounting, finance, health care, education, travel and tourism, there has not been a need for a significant increase for jobs in these areas year-over-year. Faucher also added that the Northeast region of the country as a whole has tended to see fewer job openings than the rest of the country over the past six or seven years.
“For every 100 jobs, there are 4.3 in the Northeast,” Faucher said as he compared it to the 4.6 national rate. “The labor market in the Northeast is a little tighter than the rest of the country, with less transitional unemployment.”
Faucher also said the decrease in growth in some of the region’s manufacturing, construction and mining industries was having a direct impact on open job postings.
“I think it’s really that slowdown in these goods-producing industries that have resulted in the slowing of job growth in the Pittsburgh metropolitan area in 2019,” he said. “That being said, job growth is still pretty good, but it is a bit slower … in terms of a year ago.”
The decrease is apparent across many industries, including banking, manufacturing and hospitality. And it includes both local and national chains
A slowdown in job growth
What’s unknown is what caused the drop, but economic experts and state data support the notion that job growth may be slowing.
Gus Faucher, a senior vice president and chief economist at PNC Financial Services Group Inc., said while growth has remained steady, in service-providing industries like accounting, finance, health care, education, travel and tourism, there has not been a need for a significant increase for jobs in these areas year-over-year. Faucher also added that the Northeast region of the country as a whole has tended to see fewer job openings than the rest of the country over the past six or seven years.
“For every 100 jobs, there are 4.3 in the Northeast,” Faucher said as he compared it to the 4.6 national rate. “The labor market in the Northeast is a little tighter than the rest of the country, with less transitional unemployment.”
Faucher also said the decrease in growth in some of the region’s manufacturing, construction and mining industries was having a direct impact on open job postings.
“I think it’s really that slowdown in these goods-producing industries that have resulted in the slowing of job growth in the Pittsburgh metropolitan area in 2019,” he said. “That being said, job growth is still pretty good, but it is a bit slower … in terms of a year ago.”
In May, while the U.S. added 75,000 jobs, the hiring of new employees slowed, as reported in the Wall Street Journal. It stated the national hiring decrease was not industry specific.
Statewide, year-over-year, total nonfarm jobs were up 40,600. But here too are signs that the market is beginning to soften: The civilian labor force was down 2,000 in June compared with May, and total nonfarm jobs were down 1,400, according to data from the Pennsylvania Department of Labor and Industry. |
“I think it’s really that slowdown in these goods-producing industries that have resulted in the slowing of job growth in the Pittsburgh metropolitan area in 2019.”
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While there may be fewer job openings, the market for workers is still tight. Throughout the commonwealth, unemployment in Pennsylvania hit 3.8 percent in June 2019, down from 4.2 percent in June 2018, according to the Department of Labor and Industry.
There could be a number of other reasons for the overall drop-off among the region’s largest employers. For instance, companies may have altered the way their online job listings are populated on their websites or changed how often the site is updated.
Full-time postings with Allegheny County, for example, were down 61 percent to 118 postings, compared with 300 from a year ago. Laura Zaspel, the HR director for Allegheny County, noted that, “there are fewer vacancies to fill, but this is not an apples-to-apples comparison because of the continual evolution of positions and needs in Allegheny County. It is worth noting that one job posting can also lead to the filling of multiple vacancies, so it is not accurate to assume that less jobs posted means less positions filled.”
James Craft, a professor of business administration and economics at the University of Pittsburgh, said another reason why Pittsburgh might be seeing a decline in job postings is the shift to internal networking for hiring and the trend to hire work out to contractors.
There could be a number of other reasons for the overall drop-off among the region’s largest employers. For instance, companies may have altered the way their online job listings are populated on their websites or changed how often the site is updated.
Full-time postings with Allegheny County, for example, were down 61 percent to 118 postings, compared with 300 from a year ago. Laura Zaspel, the HR director for Allegheny County, noted that, “there are fewer vacancies to fill, but this is not an apples-to-apples comparison because of the continual evolution of positions and needs in Allegheny County. It is worth noting that one job posting can also lead to the filling of multiple vacancies, so it is not accurate to assume that less jobs posted means less positions filled.”
James Craft, a professor of business administration and economics at the University of Pittsburgh, said another reason why Pittsburgh might be seeing a decline in job postings is the shift to internal networking for hiring and the trend to hire work out to contractors.
“The projection that there might well be a recession has led companies to rethink if they want full-time employees or not and hire them in this situation."
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“The idea of networking is probably more effective right now than trying to post a job generically in the market in a tight labor market,” Craft said, adding that “there’s a lot more emphasis today on contingency workers.”
He said employers are finding more success by asking their current workers to suggest people for unfilled positions of whom the workers know personally. Others may be first looking to fill jobs internally. This has been the case at PNC, where there were 716 fewer local open positions posted compared to this time last year, with a total of 404 available, down 64 percent. |
“A critical component of our (recruiting) strategy includes filling open positions internally to create career growth and advancement opportunities for our employees,” said Caitlin McLaughlin, executive vice president and director of talent and total rewards at PNC. “Our approach to talent represents best practices and emphasizes the importance of getting the right people into the right roles within our organization.”
A potential economic downturn in the near future also could be playing a role. Craft said the belief that employers might not want to take on as many full-time positions now as they did a year ago is popular across all industries because of the fear of potentially having to terminate such roles within the next year or so.
“What the National Association for Business Economics is projecting in the next 12 months, by 2020 to mid-2020, is we’re going to have a meaningful recession,” Craft said. “The projection that there might well be a recession has led companies to rethink if they want full-time employees or not and hire them in this situation.”
Putting it into perspective
Still, there are plenty of jobs to be found. According to the Allegheny Conference on Community Development’s “2017-18 Inflection Point” report, projections for the region’s employment and hiring trends are on track with its 2016 estimates, with the Pittsburgh area expected to see a shortage of up to 80,000 workers by 2025 due to the retiring of the Baby Boomer generation. The report also estimates that nearly half of the area’s 40,000 annual college graduates leave the region to pursue work elsewhere, another inhibitor in finding individuals to fill open positions.
Linda Topoleski, vice president of workforce programs at the Allegheny Conference, noted that the Conference has seen a slight increase in overall openings across the entire 10-county region. A partnership with Burning Glass Technologies, a Boston-based artificial intelligence company, has enabled the Conference to scrub over 1,000 websites of regional employers every night for job postings.
“Ours is the 10-county southwestern Pennsylvania region, which is slightly larger, so there’s going to be a little bit of a discrepancy there (compared with the Business Times data), but we are showing an increase where last year in June 2018 it was about 18,500 (open postings) from the 10-county region and in June of 2019, it was 21,000,” Topoleski said. “Those are job listings that are 60-days or less.”
The Inflection Point report also found that health care, data science and IT roles continue to be the region’s fastest-growing occupations.
The numbers were mixed for health care. While Highmark saw an increase from 1,050 job postings last year to 1,264 this year, UPMC’s was down slightly from 2,400 last year to 2,341 across all of western Pennsylvania this year.
“Last year alone, we filled more than 21,000 jobs and are projected to fill even more in 2019. … The most notable change that we have seen in the past year is quite simply the tightening labor pool and competition for talent,” UPMC said in a statement. “With more than 820 current job openings (company-wide), nursing continues to be our No. 1 need.”
A potential economic downturn in the near future also could be playing a role. Craft said the belief that employers might not want to take on as many full-time positions now as they did a year ago is popular across all industries because of the fear of potentially having to terminate such roles within the next year or so.
“What the National Association for Business Economics is projecting in the next 12 months, by 2020 to mid-2020, is we’re going to have a meaningful recession,” Craft said. “The projection that there might well be a recession has led companies to rethink if they want full-time employees or not and hire them in this situation.”
Putting it into perspective
Still, there are plenty of jobs to be found. According to the Allegheny Conference on Community Development’s “2017-18 Inflection Point” report, projections for the region’s employment and hiring trends are on track with its 2016 estimates, with the Pittsburgh area expected to see a shortage of up to 80,000 workers by 2025 due to the retiring of the Baby Boomer generation. The report also estimates that nearly half of the area’s 40,000 annual college graduates leave the region to pursue work elsewhere, another inhibitor in finding individuals to fill open positions.
Linda Topoleski, vice president of workforce programs at the Allegheny Conference, noted that the Conference has seen a slight increase in overall openings across the entire 10-county region. A partnership with Burning Glass Technologies, a Boston-based artificial intelligence company, has enabled the Conference to scrub over 1,000 websites of regional employers every night for job postings.
“Ours is the 10-county southwestern Pennsylvania region, which is slightly larger, so there’s going to be a little bit of a discrepancy there (compared with the Business Times data), but we are showing an increase where last year in June 2018 it was about 18,500 (open postings) from the 10-county region and in June of 2019, it was 21,000,” Topoleski said. “Those are job listings that are 60-days or less.”
The Inflection Point report also found that health care, data science and IT roles continue to be the region’s fastest-growing occupations.
The numbers were mixed for health care. While Highmark saw an increase from 1,050 job postings last year to 1,264 this year, UPMC’s was down slightly from 2,400 last year to 2,341 across all of western Pennsylvania this year.
“Last year alone, we filled more than 21,000 jobs and are projected to fill even more in 2019. … The most notable change that we have seen in the past year is quite simply the tightening labor pool and competition for talent,” UPMC said in a statement. “With more than 820 current job openings (company-wide), nursing continues to be our No. 1 need.”