Q4 Employment Report

U.S. private employers continued to add jobs in September, with an additional 156,000 nonfarm jobs according to the Bureau of Labor Statistics and 151,000 private sector jobs according to the ADP National Employment Report. Professional and business services, which includes accounting and finance roles, was far and away the fastest growing sector of the employment market.

72 Consecutive Months of Job Creation

Although it was less than the 170,000 jobs expected by economists, September’s report marks the 72nd consecutive month – or six full years – of job creation. Job growth averaged 192,000 over the third quarter, which closely mirrored the first quarter’s pace and was up from the 146,000 average in the second quarter. Sustaining this level of growth will deliver enough jobs to keep up with the growing population.

The Conference Board Employment Trends Index also increased in September, suggesting moderate job growth through the first quarter of 2017. “Despite the recent decline in corporate profits, employers are not showing any signs of reducing payrolls,” said Gad Levanon, the Conference Board’s Chief Economist for North America.

Moreover, jobless claims fell to the second lowest level since 1970, just above the four-decade low in April. This marks 83 straight weeks that the filings have been below 300,000, which is not only the longest streak since 1970, but an indication of a healthy labor market.

September 2016 Jobs Report

The War For Talent

While job gains have slowed from 2015, they were robust enough to entice many Americans to look for work when they had previously been discouraged to do so. The labor force has increased by 3 million workers over the past year and nationwide unemployment has remained at or just below 5% – an eight-year low. More importantly, unemployment in Los Angeles is 4.6% and 2.5% among those with a Bachelor’s degree or higher.

The labor-force participation rate came in at 62.9% – mostly due to the retirement of many baby boomers – but more workers are rejoining the labor market, and the number of temporary employees has increased by more than 65% since the end of 2009 according to the Bureau of Labor Statistics.

September was no different, with temporary and contract employment expanded by an additional 23,200 jobs, taking the Temporary Penetration Rate to near all-time highs. A recent workplace survey by the Addison Group revealed that 94% of hiring managers were more willing to hire contract workers today than they were five years ago – 88% for senior-level roles – and 46% have used contract workers to fill their project and staffing needs in the past year. The survey also showed that these on-demand opportunities will continue, especially as the competition for skilled workers increases as the labor market continues to tighten.

Employment and Compensation are Driving the Economy

Companies facing increased pressure to fill positions faster as they compete for skilled accounting and finance professionals has had a positive effect on wage growth. For the general population, wage growth was previously stuck at around 2% and increased to 2.6% over the last year, outpacing inflation.

That said, the unemployment rate for accounting and finance professionals is half of the national and regional unemployment rates, and the increases in compensation have been more dramatic, with research from the Association for Finance Professionals reporting average salary increases of 4.6% in the past year. Dallas-based compensation consultant Dindy Robinson noted that top performers are seeing salary increases of up to 10%.

The good news is that the healthy job market has improved consumer spending and is driving economic growth amidst low productivity. Deutsche Bank’s Chief US Economist Joseph La Vorgna told Business Insider that “GDP growth in the ongoing cycle has been entirely supported by labor market gains.”

All Signs Point To… An Improving Economy

If the recent months are any indication, the economy is on a major upswing. As of mid-July, unemployment applications hit the lowest number since 1973. New unemployment claims have come in under 300,000 since February – the longest run in 15 years – and the end of the second quarter revealed the lowest unemployment rate since April 2008. The Consumer Department also reported good news halfway through the second quarter – consumer purchases, which account for about 70 percent of the economy, showed the biggest gain since August 2009.

 Labor Department Jobless Claims

Highlights from the Labor Department

  • The overall unemployment rate decreased to 5.3%.
  • The unemployment rate for individuals with a Bachelor’s degree or higher decreased to 2.5%.
  • The share of people out of work for 27 weeks or longer decreased to 25.8%, the lowest since March 2009.
  • The underemployment rate decreased to 10.5%, the lowest since July 2008.
  • The number of Americans working part-time for economic (rather than personal) reasons decreased to 6.5 million, the fewest since 2008.
  • California had the largest increase in employment from the prior year (+461,900 jobs), nearly twice that of the next-largest increase (Texas).
  • California also had the second-largest increase in employment from the prior month (+23,000 jobs), only slightly lower than the largest increase (New York).
Unemployment Projections

Projections show this decline in unemployment continuing
through the end of the year, reaching 5.0% by January 2016.

Professional and business services – which includes accounting, finance, audit and tax roles – topped the list of job gains for June 2015, accounting for 64,000 of the 223,000 total private sector jobs added. Plus, according to CareerBuilder’s Midyear U.S. Job Forecast, the number of employers planning to hire both full-time, permanent staff and temporary/contract workers have improved from this time last year. This report shows that nearly half of these employers expect to increase starting salaries over the next year, with 1 in 6 showing an increase by 5 percent or more.

CareerBuilder also reported the hot areas for hiring – those industries expected to outperform the national average for full-time, permanent hiring in the third and fourth quarter. They include information technology, health care, hospitality, financial services, manufacturing and retail.

Bolstering this optimistic picture, the 2015 KPMG CEO Outlook Study reported that 52% of CEOs are more confident about company growth in the next three years than they were last year. Moreover, the report showed that 78% are expecting to hire more people over the next three years as well.

A Welcome Message from our new Managing Director

As a lifelong Angelino, I take pride in a career that has helped shape local professionals’ finance and accounting careers and impacted local organizations. I have spent the past 20+ years working closely with the companies and people in Los Angeles and Orange County. That’s why I am excited to be the new Managing Director for Century Group’s San Fernando Valley Office, servicing the markets where I was born and raised, as well as where I now reside, at a company with such strong roots in the Southern California area. Phil Bruno

Combining my two decades in local staffing and recruiting with Century Group’s unprecedented reputation in our field provides the perfect backdrop to providing exceptional resources to Accounting, Finance, Tax and Audit professionals and organizations that need top expertise.

I look forward to meeting and partnering with many of you in the coming months. Please contact me to introduce yourself or with a position inquiry at any time. I can be reached at 818.844.1105 or [email protected].

Phil Bruno
Managing Director

FAST FACTS: Latest Statistics on Employment and Economic Trends

A healthier job market helped spark the biggest gain in Americans’ confidence in almost a year, raising prospects for the economy at the start of fourth quarter.

For accounting and finance professionals, the current trends point to tightening professional labor markets with extremely low unemployment rates (less than 1% in some professional categories) and increasing compensation.

There were 4.8 million job openings on the last business day of August, up from 4.6 million in July and the highest level of job openings since January 2001, according to the U.S. Bureau of Labor Statistics.

The unemployment rate continued to decline, and more importantly, it was for the right reason. If both the unemployment and labor-force participation rates fall concurrently, it means the drop in unemployment was the result of job seekers dropping out of the talent pool and simply giving up.

The good news – that’s not what’s happening. In September, the unemployment rate fell by 0.2% to 5.9%. That’s the lowest since July 2008. The labor participation rate also dipped but by a smaller amount: 0.1% to 62.7%. Essentially, there’s a very positive reason for a part of the drop in the unemployment rate – more people are finding jobs!

Unemployment Rate (Seasonally Adjusted)
Unemployment Rate (Seasonally Adjusted)

Hiring is picking up. Century Group is currently engaged on 498 searches and projects for accounting, finance, internal audit and tax professionals. The volume of search activity is equivalent to the pre-recessionary years of 2006 and 2007.

Perhaps more importantly for the accounting and finance professionals that we work with daily, the unemployment rate for individuals with a bachelors degree or higher dropped to 2.9% in September.

 Unemployment Rate – Bachelors Degree or Higher
Unemployment Rate – Bachelors Degree or Higher

At the same time, Professional and Business Services led the way in job increases, posting 81,000 job gains in September.

Job Gains

Job Gains

Temp Penetration Rate

Likewise, the temp penetration rate climbed 0.01% to a new all-time high of 2.10%, as temporary help services added 19,700 jobs in August. That’s important, because temporary employment is seen as a leading indicator for employment, with temporary staffing trends leading employment by six months during periods of economic growth (and three months when the economy is emerging from a recession)

Temporary Help Services Jobs (000s), seasonally adjusted)

Demand for temporary workers grew 8.6% through September 2014 and is expected to increase 8.7% in Q4 2014 which would be the 19th consecutive quarter of increases (year-to-year).

Year-Over-Year Growth in Temp Jobs, seasonally adjusted

Sources: Bureau of Labor Statistics, Staffing Industry Analysts and American Staffing Association

Finance Staffers Earn Larger Pay Increases

CFOs earned a 2.8 percent rise in base pay in 2013, but gave staff-level finance personnel an increase of more than 4 percent.

Corporate finance professionals at all job levels received pay increases in 2013, but staff-level employees earned the greatest hikes in pay, according to a new report by the Association for Financial Professionals (AFP).

Overall, financial professionals reported a 3.8 percent average gain in their base salaries in 2013, after garnering a 3.4 percent raise in 2012: staff-level finance employees earned the greatest increase — 4.1 percent — while management-level personnel received an average increase of 4 percent and executive-level employees an average raise of 3.5 percent.

The staff-level increase was up a full percentage point on 2012′s rise, the AFP survey found. “Analyst” titles earned the biggest salary increases, averaging 4.8 percent. Among management-level professionals, the “financial reporting specialist” title saw the highest salary increase — 5 percent. The 3.5 percent salary hike for executives, meanwhile, was down 0.3 percentage points from 2012, but still higher than was reported in the three years prior to 2012, the AFP said.

Finance-Salaries-Rising-2014-base-pay_chartbuilder-1024x397

 

Directors of treasury/finance did the best in the “executive” category, earning base salary increases of 4.6 percent, followed closely by vice presidents of finance (4.4 percent). For chief financial officers, the average base salary increased just 2.8 percent, to $201,271 from $195,811. However, CFOs, like other executives, earned a substantial amount of pay in bonuses. Of all three job tiers, executive-level financial professionals received the largest average bonuses in 2013 — both in terms of total dollars and as a percentage of base salary, the AFP survey found.

However, the numbers showed no increase over 2012 or 2011. The average bonus for executive-level professionals in 2013 was $54,632, or 34 percent of base salary, about the same as in 2012. CFOs earned an average $76,620 in bonuses in 2013.

At the management and staff levels, bonuses were smaller — $16,357 (17 percent of base salary) for management and $5,874 (10 percent of base salary) for staff. For the most part, companies based performance bonuses on traditional measures, at least in part: 62 percent used operating income or EBITDA targets; 51 percent “completion of specific projects”; 48 percent “profit or increased profit” targets; and 34 percent “sales or increased revenue” targets.

Holding an MBA or graduate degree earned financial professionals at all levels a premium salary. This was particularly true at the management level, where managers with an MBA or graduate degree earned on average $15,000 more than their peers who did not hold advanced degrees.

The AFP compensation survey was conducted in February 2014 and had 4,300 respondents at more than 2,800 companies. About half the companies had revenue of more than $1 billion, and 22 percent had revenue of less than $100 million.

Originally posted on www.CFO.com – by Vincent Ryan | June 2, 2014 | CFO.com | US

How to Structure Your Staff for Success

 

Interim & Temporary Staffing Employment Up 6.8% from a Year Ago Employment data released in April by the U.S. Bureau of Labor Statistics indicate that the staffing industry added 55,100 new jobs (up 2.2%) from February to March of this year. From March 2012 to March 2013, the number of staffing employees increased by 6.8%.

Overall employment growth was mostly driven by new job creation in professional and business services (+51,000) and health care (+23,000) with job losses focused in retail (-4,000) and government (-12,000).

Interestingly, a staggering 40% of employment growth in professional and business services was driven by new jobs created in the interim and temporary staffing industry.

“It continues to be a very strong employment market for Accounting and Finance professionals – CPAs and MBAs – with strong experience in public accounting and Fortune 1000 companies,” says Ron Blair, Managing Director of Century Group Professionals.

“The shortage of qualified Accounting, Finance, Tax and Audit professionals has many clients asking us for help executing interim roles and completing key projects.”

The overall U.S. unemployment rate edged down from 7.7% in February to 7.6% in March

Investment Bankers Spend Their Recession

So How Should an Investment Banker Spend Their Recession?

There was a time when investment banking was a career path representing prestige and respect. After the effects of 2001 with the tech bubble bursting and the tragic impact of 9/11 we believed the worst had happened for the industry. In the years that followed we continued to build careers with the expectation of continued prosperity until this current credit crisis, after which we are now questioning what’s next. The immediate thought is to just get another job, easy enough. Another option would be to take some time off and ride out the storm. Although that sounds ideal, is it really a viable option? With the demise of the most highly respected investment banks in 2008, what can we expect for 2009? The media has prepared us for the worst predicting no jobs in investment banking for the foreseeable future. With all the negative press and talk of a severe recession what lies ahead for most bankers? The good news is that you have options.

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Professional Recruiters Help Companies Fill Key Roles In Contingency Situations

Leadership transitions are a natural part of the business cycle. However, when high-level vacancies are unexpected, companies can be left scrambling to react.

Leadership transitions are a natural part of the business cycle. However, when high-level vacancies are unexpected, companies can be left scrambling to react.

For instance, The Wall Street Journal recently reported that Intel CEO Paul Otellini has announced his impending retirement. This move came as a surprise, as the 62-year-old had been expected to retain his position until he reached age 65, at which point retirement would be mandatory under the company’s rules.

In a press release, an Intel spokesman stated that “the decision was entirely Paul’s,” and that the company’s board “accepted his decision with regret.”

The forced leadership transition comes at a critical moment for Intel, with rising sales of smartphones and tablets leading to reduced demand for the PC chips that make up the core of the company’s business. Although the chip-maker has been positioning itself to compete more effectively in the shifting market, it will continue to face significant competitive pressure on price and performance as it seeks to adapt.

The Journal suggests that Intel has historically shown a strong preference for promoting experienced internal talent to top leadership positions, with all five of the company’s chief executives having been promoted from within the company. However, Otellini’s presumed heir, Sean Maloney, has announced plans to retire after suffering a stroke.

The company is now reportedly looking at a number of candidates to replace its outgoing CEO, including professionals from both in and outside of the business.

Whether a company finds itself in a contingency situation due to an unexpected departure or is looking to find a long-term replacement for a sitting corporate officer, recruitment firms can aid in the conduct of a fast, effective executive or financial professional search.

Financial Project Consulting Services Help Companies Put Costs In Perspective

On November 15, the Department of Justice announced that British Petroleum (BP) will plead guilty to a variety of criminal charges and pay a $4 billion penalty in connection with a 2010 oil spill that occurred in the Gulf of Mexico after an explosion on the offshore drilling rig Deepwater Horizon.

According to Attorney General Eric Holder, BP has agreed to plead guilty to 11 counts of felony manslaughter, obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts.

Simultaneously, the London-based oil company reached an agreement to pay $525 million to the Securities and Exchange Commission (SEC) to settle charges that it committed securities fraud by releasing false information about the amount of oil being spilled into the Gulf.

The company still faces a number of additional liabilities. A federal judge is currently reviewing a proposed $7.8 billion settlement between BP and over 100,000 Gulf Coast residents and businesses. Meanwhile, federal and state officials continue to seek billions of dollars to address environmental damage caused by the 2010 spill.

David Uhlmann, director of the environmental law and policy program at the University of Michigan, told The Associated Press that, although the case resulted in a record-setting fine, BP could have faced even harsher penalties, due to the immense impact of the oil spill.

Project consultants can help companies plan for possible contingencies

A more thorough consideration of the potential liabilities that could stem from a drilling accident may have spurred BP to make additional investments in well safety during the early stages of the Deepwater Horizon project. In turn, this could have kept the company out of its current predicament.

Companies that are in need of such analytical expertise can benefit from working with a firm that provides financial project consulting services.

CFOs In Demand For Positions On Corporate Boards, According To New Study

Current and former chief financial officers (CFOs) are increasingly seen as valuable additions to corporation’s boards, according to new research from Ernst & Young.

Current and former chief financial officers (CFOs) are increasingly seen as valuable additions to corporation’s boards, according to new research from Ernst & Young.

The firm’s final report is based on a survey of 800 global CFOs and a more in-depth study of the career paths taken by 347 CFOs working at major companies with over $5 billion in annual revenues, as well as interviews with executives, governance experts and academics.

Among respondents to the CFO survey, 79 percent said they believe that their financial expertise has driven an increase in demand for them to serve on corporate boards.

Furthermore, information from the career path study showed that, among the major companies looked at, 14 percent of their board members were current or former CFOs. This represented a considerable increase over 2002, when the figure was only 8 percent.

Over the same period of time, the proportion of audit committee chairs who are former or current CFOs has more than doubled, rising from 19 percent in 2002 to 41 percent in 2012.

“Regulatory pressure is driving a major increase in demand around the world for CFO experience on boards,” Ernst & Young’s Jay Nibble explained in a press release announcing the results of the study. “Additionally, as companies grapple with a volatile economy and the diverging growth trends of developed and rapid-growth markets, they increasingly want good insights and support for cost, risk and cash flow management – three areas of focus that fall squarely within the CFO’s skill set.”

Corporate recruiters can help companies connect with leading talent through a financial professional search, whether they are looking to fill CFO jobs or find qualified financial experts to serve in other roles.