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Amid Gloom, Some Companies Fill Jobs

Ford plans to add 1,200 workers to its Chicago plant.
Scott Olson
Getty Images
Ford plans to add 1,200 workers to its Chicago plant.

The country's unemployment rate still hovers at 10 percent, and a new report says job cuts in January were at a five-month high. But a few recent announcements may give job searchers some hope.

CarMax, Ford Motor Co., Starwood Hotels & Resorts Worldwide and Oracle Corp. said last month that they plan to hire hundreds — or even thousands — of workers. Some industry analysts said it is a good sign about hiring this year.

John Challenger, CEO of Chicago employment consulting firm Challenger, Gray & Christmas, said conditions are right for hiring. "Productivity numbers went way up in this recession," he said, despite the fact that companies needed to make their workforces leaner. But there's only so far a company can stretch a taut, productive staff.

Challenger's firm reported Wednesday that employers had announced plans to reduce payrolls by 71,482 workers last month. That's the highest job-cut number in five months, but 70 percent less than a year earlier.

Also, the Bureau of Labor Statistics is due to release employment figures for January on Friday. Reuters projects that nonfarm payrolls grew by 5,000 last month.

More Business Equals More Travel

The entertainment and leisure industry leads among companies who plan to hire, according to the Challenger report. Included in that tally is Starwood Hotels.

The hotel giant that owns the Sheraton, Westin and St. Regis chains announced it would create more than 12,000 jobs this year. Half of those jobs would be located in the United States, and most of the new jobs are a result of 80 to 100 new hotels that Starwood is opening.

Brad Minor of Starwood Hotels said the company thinks it's a great time to expand. "Occupancy has already started to come back to pre-crisis levels," Minor said. He expects the rates charged for rooms to follow.

Jan Freitag, vice president of Smith Travel Research, said that the travel industry seems to be feeling less gloom and doom these days. "I think, overall, the industry is fairly optimistic when it comes to the longer-term outlook," he said.

He added that it's a positive sign that Starwood is announcing plans to hire.

But Michelle Chang, hotels analyst at Morningstar, cautioned, "We're not expecting a huge bounceback in 2010."

While occupancy levels have stabilized, she said, the revenue per available room rate is still under pressure. That could be caused by consumers shopping around for the lowest rates and corporations trying to negotiate better room prices for business travel, Chang said. In essence, it is a consumer's market in the hotel industry.

"It's still a fairly challenging environment out there," Chang said. However, she said, the industry may improve by the end of 2010 or the beginning of 2011.

But getting work might still be competitive. More than 400 people applied for 30 positions at one of Starwood's hotels that opened in December.

"It speaks to the broader economy," Chang said. "We still have a significant portion of the population that is unemployed."

'Driving' The Economy

The auto industry is also seeing the stirrings of a bounceback. CarMax announced it is hiring for 600 store positions. And Ford said it plans to add 1,200 jobs to its Chicago manufacturing plant where it will start producing the next-generation Ford Explorer this year.

Marcey Evans, a spokeswoman for Ford, said the company is uncertain how many of these positions will be new hires. Ford will need to offer the jobs to laid-off employees first. Ford also plans to add 1,000 jobs at its Michigan facility in 2012, she said.

Paul A. Eisenstein, publisher of the independent automotive news site, said the Ford Chicago announcement is a positive sign for the automotive industry. He said in the past year or two manufacturers have focused on keeping inventories tighter and more directed by market demand. As a result, most have modest inventories compared with where they were — even in the steep downturn in 2008.

Eisenstein said auto manufacturers will be motivated by trends — up or down — with a particular product. And they're looking to see if their assumptions are in line with what the economy does. If demand picks up, they will hire more workers.

"There's more than a glimmer of hope," Eisenstein said. "There's little doubt at this point that we're going to see jobs open back up. How fast and how many is unclear."

Most of CarMax's new positions are in sales, but the auto retailer is also hiring in service operations, the business office and purchasing. Trina Lee of CarMax said the company always hires around this time of year to prepare for the spring and summer car-buying season. CarMax wouldn't release figures about hiring from last year, but Lee said CarMax has about 13,250 employees.

Eisenstein said the nearly 5 percent increase in workforce bodes well. "That appears to be a good number reflecting optimism, but it doesn't suggest that they're preparing for a wholesale uptick in the car market," he said.

Hiring In Other Industries

Following the entertainment and leisure industry, the government and nonprofit sector has the highest number of announced hires, according to the Challenger survey.

"That probably relates more to the stimulus program," John Challenger said, adding that state and local governments are struggling.

Other companies have also announced hiring: General Electric Co. has said it is looking to fill positions in energy, green appliances, transportation and research. And, on the heels of acquiring Sun Microsystems Inc., Oracle Corp. officials announced plans to hire 2,000 people in the next few months — twice as many as the business software giant will be laying off.

Challenger said that during a recession, companies will often look for people who have skills in accounting, business operations and risk management.

"In times of turnaround — and we're in a time of turnaround — there is more focus on seeking out more opportunity," he said. That means, looking ahead, people in marketing and sales become more in demand.

At least one company is banking on a growth of jobs. Monster announced Wednesday that it would buy Yahoo! HotJobs for $225 million.

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