Good riddance, 2001! You were a disaster for both job-seeking execs and the headhunters who place them. True, percentage-wise, fewer managers than working grunts are pounding the pavement today. The unemployment rate for people who supervise others is 2.9%, vs. 5.8% for the overall U.S. workforce. The bad news is that in 2001, managers got sacked at a faster rate than any other type of employee: Their jobless rate has climbed 71% since last December, vs. only 45% for peons, according to the Labor Dept.
The big question is whether managers and MBAs will fare any better this year. From January through November of last year, mass corporate layoffs produced 2.2 million casualties, more than a good-size war. Joseph McCool, editor of Executive Recruiter News, a monthly newsletter published by recruiting industry researcher Kennedy Information, believes things will probably improve. According to informal polling by McCool's organization, 50% of several dozen companies in the Standard & Poor's 500 believe they'll do more hiring this year than in 2001.
Don't pop open the Moët just yet: The implication is that the other 50% may not add staff. Contrast that with the boom years of the late '90s, when 75% to 85% of such companies told McCool they would be hiring. "This year will be more a return to normal," he says. "Companies are going to continue to be very selective" about hiring.
To get a sense of just how selective, BusinessWeek Online writers Eric Wahlgren and Mica Schneider asked a number of career experts to make educated guesses about the outlook for 2002. According to them, executive demand will be strongest for managers who know how to use technology to cut costs as well as for those who can bring in revenue. And in the wake of September 11, execs who can oversee corporate security can expect a friendly reception.
Few experts they spoke with are optimistic about the overall outlook for executive hiring in 2002. Still, many maintain that jobs will be available for managers who skillfully market themselves. The edited excerpts of their comments presented here form Part One of BusinessWeek Online's utterly unscientific second annual career outlook survey. Come back soon for Part Two:
Mark Jaffe, Partner, Wyatt & Jaffe, an executive search firm in Minneapolis
Mark Jaffe
There is going to be a turnaround this year, probably in the second or third quarter. My guess is we're going to be looking for far less specialized people than in 1998, 1999, or 2000. In 2000, for instance, we wanted people to do brand management for application service providers [companies that outsource Internet infrastructure applications]. If someone was a marketing generalist who knew something about ASPs, that wasn't good enough.
Then, during the downsizings of 2001, we found that people who were really, really specialized were the first ones to go. They had big targets on their foreheads. In 2002, there is going to be a consolidation of responsibilities. Companies will look for strong operations and marketing people, and development people who have a lot of tools in their kit rather than super-specialists.
Another thought: I hope everybody is over their grandiosity. Candidates are a lot more humble now. And the idea of recruiters as Hollywood agents for celebrity CEOs is dead. Competent CEOs are always at a premium. But now it's more about metrics -- what we can measure in terms of an executive's performance. Moreover, people are [expected to deliver] within a much shorter time frame now.
Candidates are going to be hired based less on their resumes and the brand names of the companies they have worked for and more on the basis of credible references. Also, when we look at candidates, we aren't going to be so much concerned whether the company they worked for succeeded or perished, but rather whether that company was an innovator as opposed to a me-too.
In terms of industries that will be hiring, I think that data storage will come up huge over the next 18 months. I think the [fiber-optic component technology] industry is going to be big. There are a lot of photonics companies now, most of them struggling. The ones that survive are going to revolutionize the semiconductor industry.
There are some emerging things in the world of DNA manipulation that are very exciting. Big stuff will happen [in biotech]. That's my guess.
Alysa Polkes, director of MBA career services at the Anderson School of Business at the University of California, Los Angeles
We're seeing demand from not-for-profit companies. We've just posted jobs for managerial positions at Yosemite National Institute; Inner-city 100, which is in Boston; United Way in the Bay Area; and Business for Social Responsibility, a San Francisco group that trains member companies in responsible business practices. There's also somewhat more demand from government security agencies [such as the CIA or FBI]. Some of our MBAs are interested in those.
Solar is becoming hot, too, with new solar technology companies showing interest in MBAs this year. Of course, none of this will replace management consulting [for which hiring dropped off sharply in 2001] and take 25% to 35% of our classes in one fell swoop.
Biotech is still huge, though. We doubled our biotech summer internship numbers in 2001, with 4.8% of interns going to such companies.
The other thing we're expecting is that small, boutique investment firms will recruit more MBAs. And students will remain interested in the basic, core industries. Companies that make puddings, potato chips, and other consumer products are back. It's much more difficult to get a job in these Fortune 500 companies, but there are still jobs. Very few companies are saying that they aren't playing the game of recruiting this year at all.
More than ever, it's imperative that students be on top their game in terms of telling a great story about why they're right for a certain job. They won't have room to mess up.
Mark McConnell, consultant with executive search firm Heidrick & Struggles in Houston
Mark McConnell
Technology may not lead us out of a slowdown, but it will play a key role and probably deliver moderate growth in 2002. Executives who know how to use technology to help companies save money will be in demand -- for example, execs who can automate supply-chain and procurement functions. Overall, managers will be asked to do more with less as companies cut costs, budgets, and resources. Creativity and the ability to implement changes effectively will be traits employers seek.
The outlook for energy is uncertain, but construction of new, cleaner-burning power plants will keep suppliers and construction companies in this sector busy. Companies will be under close scrutiny in light of the Enron situation, and an overall increase in demand for accounting and finance professionals will continue.
Corporate security and safety will be areas of great concern, and we're seeing a marked increase in demand for security and safety professionals. There continues to be a very steady demand for health-care professionals and for top talent in the biotech and pharmaceutical sectors as well.
Scott Gordon, managing director of the Internet practice at executive search firm Spencer Stuart in San Mateo, Calif.
For 2002, it's back to fundamentals. Fancy new titles and job descriptions went away with the dot-com collapse. Companies are looking for VPs of sales to grow the top line, and CFOs to manage expenses to maintain the bottom line. We've seen a dramatic increase in the number searches for VPs of sales and CFOs -- particularly in Silicon Valley, but also across all U.S. businesses.
Two jobs that aren't hot any longer are VP of business development and VP of corporate development. Companies simply aren't doing the volume of deals that they once were. But we've seen a dramatic increase in recruiting the last few weeks from network security companies and fab-less semiconductor companies [those that design computer chips and outsource the actual manufacturing to commercial foundries]. There is a need for general management down to virtually every function because prospects have improved [in the fab-less semiconductor industry]. Companies are looking to build teams. And often, a board will make a decision to upgrade management. This happens whenever an industry becomes hot.
Robert Bonner, director of MBA career management at the Wharton School, University of Pennsylvania
Robert Bonner
We're seeing most large, traditional firms -- investment banks, consulting firms, consumer- product and manufacturing firms, and large technology companies -- reducing their hiring to some degree. The word for the spring is "caution" -- some firms have hiring freezes, most are monitoring their finances carefully. There's very little tolerance for overhiring, and they don't want to get caught in the position they were in last year: having an oversupply of people, an undersupply of work, and having to delay start dates [for newly hired MBAs].
Depending on where the economy is in the second and third quarters, we expect to see increased hiring of MBAs in the fall of 2002. For first-year MBAs, it's going to be a tough spring looking for [summer] internships. But most signs look positive for when it really counts for first-year MBAs: next year's 2002-03 hiring [thanks to the expected economic recovery]. We're telling second-year MBAs that if they don't find their dream job this spring they should find something that will position them to get it the following year.
Carrie Mandel, managing director at legal search firm Major, Hagen & Africa in New York
We're starting to see a bit of a pickup. The key areas continue to be bankruptcy and financial restructuring, litigation, and some hedge-fund work. For anyone with a job in bankruptcy who wants to upgrade, now is a good time. The large corporate law departments at the top firms are still slower than they have been. In fact, we're hearing of layoffs.
Intellectual-property law is still pretty hot, but you have to make the distinction between soft intellectual property and patent intellectual property -- which requires people with technical backgrounds. There are far more openings in patent litigation than for people who want to dabble in copyright law. Entertainment law is still pretty limited. It's patent-litigation lawyers with electrical engineering backgrounds who are placeable today.
Salaries have remained flat. [Signing] bonuses were down this year from what they were a year ago. A lot of big firms did put together generous packages, but they still weren't offering bonuses of $40,000 and up.
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Copyright 2002, Bloomberg L.P.
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