Unfilled Openings Frustrate the Jobless

From the Wall Street Journal | Oct 11, 2010 By MARK
WHITEHOUSE

Job openings
aren't what they used to be.

Among the explanations for the stubbornly high U.S. unemployment
rate, factors such as housing troubles and extended unemployment
benefits have played a leading role. Increasingly, though, economists
and job seekers are identifying another problem: Employers are being
pickier, or not trying as hard as they usually do to fill the openings
they have.

Associated Press

Student Doris Santoyo, left, fills out an
application last month for a retail position during a job fair in
Commerce, Calif.

The
reasons for the foot-dragging are closely related to the reasons
employers aren't creating many openings in the first place. Companies
lack confidence about the outlook for consumer demand, they're not sure
what the government will do with taxes and regulation, and they want to
keep squeezing as much output from their current workers as they can.
They also feel they have plenty of time to pick the best candidates.

"What we're seeing is delay, delay," says Jeff Joerres, chief
executive of staffing firm Manpower Inc., noting that clients are taking
a lot longer to fill positions, even when they've been presented with
the right candidate. He says he expects the problem to persist at least
through next year.

The slow uptake could actually be a good sign if it means
unemployment is being held up more by a temporary lack of confidence
than longer-term "structural" flaws such as improperly trained workers.
"It means there is some reason to think there's an exit path from the
weak labor market that doesn't require us to retrain the entire work
force," says Steve Davis, a professor at the Chicago Booth School of
Business.

So far, employers
aren't showing much sign of the confidence needed to turn the job
market around. The unemployment rate held steady at 9.6% in September,
and hires are growing even slower than the low level of job openings
would suggest. Economists estimate that if openings were turning into
jobs at the pace they usually do, the unemployment rate would be about
three percentage points lower.

Donald Washkewicz, chief executive of
industrial-parts maker Parker Hannifin Corp., says his company is being
careful about hiring ahead of the November congressional elections.
Uncertainty over issues such as tax increases and environmental policy,
he says, are aggravating concerns about the broader economy: "Anything's
possible in November. Things could get better for business—or they
could get worse."

Some companies complain that when they do try to hire, they have a
hard time finding the right people. Extended unemployment benefits could
make people less willing to take the jobs available, or mortgage
troubles and poor credit scores could make it difficult for people to
move for work.

But job seekers say some of the blame should be placed on the
companies—either they're not trying very hard, or they're waiting for
the perfect employee.

"I think a lot of companies are fishing," says Korey Stephens, a
former mortgage-finance manager who has been looking for work since
early 2007, while simultaneously training to update his computer skills.
"They're just putting their feelers out, and if they find someone who's
ridiculously awesome then maybe they'll hire them."

 

Mr. Stephens says he's spent more than a month
chasing a banking job that a manager said needed to be filled quickly.
On other occasions, he says, he's gone through interviews only to learn
that the position had been canceled or frozen.

John Meline, a 39-year-old patent attorney who was
laid off from a major law firm in October of last year, says he's seen
some positions in his area of specialization advertised for as long as
six months. When he sends in his resume, he gets no response despite his
six years of applicable experience.

"It tells me that they're not really serious about filling the job,
or they're going to be hyper-selective," he says. "They're just blowing
us off."

A recent study by three economists—Mr. Davis of
Chicago Booth, R. Jason Faberman of the Federal Reserve Bank of
Philadelphia and John Haltiwanger of the University of Maryland—suggests
the job seekers have a point. Using Labor Department data, the
economists constructed an estimate of "recruiting intensity," which
encompasses various factors that influence how fast employers fill open
jobs, such as advertising, pay and the rigor of their screening process.

As of August, the recruiting intensity index stood 14% below the
average for the seven years leading up to the recession. The economists
estimate that the lack of intensity accounts for about a quarter of the
shortfall in hires compared with openings.

At Leggett & Platt Inc., which makes metal parts for bedding and
other purposes, Chief Executive David Haffner says his company remains
hesitant about any kind of expansion, because it's not clear to what
degree demand will snap back. But when it does hire, it's taking more
time.

"With more experienced talent on the market in these challenging
times, we are utilizing a more rigorous screening and interviewing
protocol," says Mr. Haffner. "We feel it is crucial to add 'top graded'
talent."

That could be good for companies and their shareholders. But it will
mean a lot more frustration for the 14.8 million Americans looking for a
job.

Write to Mark
Whitehouse at mark.whitehouse@wsj.com