FORTUNE -- U.S. companies modestly added jobs in August, easing concerns that the nation might slip back into a recession. The latest jobs report released by the Labor Department today is better than expected. Employment in the private sector rose by 67,000 payrolls, after a revised 107,000 increase in July that was more than originally estimated. The report immediately sent stocks rallying, despite the fact that overall employment dropped and the unemployment rate climbed to 9.6% from 9.5%, as more people actively searched for jobs.
The report is neither good or bad news. It will certainly take a while before unemployment falls to pre-recession levels. Adecco (AHEXY), the world's largest temporary employment company by sales, knows all too well the rough road workers have traveled throughout the recession and into the nation's slow economic recovery. The Zurich, Switzerland-based company's profits suffered last year but have bounced back this year -- it reported a second-quarter profit of 97 million euros (about $127 million) following a loss of 147 million euros ($188 million) during the same period last year. Revenues increased by 29%.
This week, Fortune caught up with Tig Gilliam, CEO of Adecco Group North America, to talk about the latest U.S. jobs report and what the nation's slow recovery could mean to workers. Gilliam is optimistic that better days are on the horizon, although it will certainly take a while before unemployment falls to pre-recession levels. Gilliam discusses who is hiring now and who will likely hire five years from now, as well as what the biggest misconceptions are about U.S. unemployment today.
The latest jobs report shows that the unemployment rate has risen to a nerve-wracking 9.6%. What's your take on this statistic?
Unfortunately the unemployment rate is probably going to increase again before it continues on a downward trend. That's primarily because the jobs recovery has been slow enough that many people who are unemployed are not actively seeking job opportunities. You're only counted as unemployed if you're currently actively seeking a job. As the job market begins to recover, some people who are sitting in the sidelines are going to start looking for work. Unemployment could go up to 9.7% to 9.8% to 10%.
I know that sounds terrible, and it's going to have an impact on consumer confidence. But I think that's probably what's going to happen.
What has business at Adecco been like during the recession and post recession?
During the recession we saw temporary staffing drop by one-third. That's huge, but it's also very typical for a recession. During the recovery, you come back with jobs demanding industrial skill-sets. We are up 50% year-over-year in industrial skills. That's where the recovery is supposed to start and that's where it's still going. That's why I still have some confidence in the jobs recovery because that's what the cycle is supposed to do.
We hear all the time that America will likely have to endure a "jobless" recovery. What will that mean for the post-recession workforce?
The biggest issue in the "jobless recovery" is just the time it takes us to get back to the level of employment we had before. If you just do the math and say we hit 200,000 new jobs a month, you know it's 40 months for us to get back the 8 million jobs we lost. People talk about the "jobless recovery," but it's obviously not jobless. However, it's going to take quite a long time to get back to the level of employment we saw before the recession.
So what does this mean and how do you make sure that you're not one of the millions out of work? There are two issues here: The first is there are huge differences in employment opportunities based on education. For those with less than a high school education, 14% are unemployed. If you have a bachelor's degree or higher, unemployment is at 4.6%. For a lot of folks, now is the time if you can afford it to go back and get a formal education.
The second issue is the post-recession job market is going to look more service-oriented and require a more professional services skill set than it did before. Professional skills, which include jobs in finance, accounting, healthcare, information technology and engineering, require more education.
What's the biggest misconception about U.S. unemployment today?
When the monthly numbers come out I think there's wild overreaction. There are very small differences in what people expect and what the actual numbers say. The reality is that the job market is recovering. It has improved over the last couple months at a slower rate than it was recovering in the first quarter. But I think people have gone down the deep end, saying we could expect a double dip.
My view is that economic recovery is coming. The jobs recovery is following behind it and we see that in the temporary employment numbers.
Also, companies don't hire aggressively until they have employees already on board working full-time. We need to see the average weekly hours worked go up because that would indicate full utilization of existing workers.
Where are the jobs today?
The volume of temporary jobs is coming first for people with manufacturing and supply chain-related skills. That's normal because it's related to the inventory cycle. Companies have worn down their inventory. They've cut costs as much as they can and now they have to build product. As they build inventory and gain a little more confidence in the recovery, they'll decide that they're going to have to add more people to take orders in customer service. So it goes from industrial to professional skills.
Five years from now, where do you see the hiring?
If you're looking long-term where the growth prospects are, it's in the professional skills category. One of the growth areas is related to clean energy initiatives - whether it's wind turbine projects or solar projects. Just as the last 20 years we saw a shift toward services I think over the next 10 years the level of education and the level of professional skills for jobs will continue to increase.
|Bank of America Corp...||15.56||0.13||0.84%|
|Cisco Systems Inc||21.28||0.37||1.77%|
|General Motors Co||40.17||1.08||2.76%|
|Ford Motor Co||16.70||-0.04||-0.24%|
Regulators are set to vote Tuesday on the so-called Volcker rule, a piece of the 2010 Dodd-Frank financial reform law intended to stop banks from taking excessive risks with federally insured deposits. More
The American Dream is supposed to mean that through hard work and perseverance, even the poorest people can make it to middle class or above. But it's actually harder to move up in America than it is in most other advanced nations. More
You have to search the fine print on Tegu's toy block set to find any hint of the company's plan to make one of Central America's poorest cities a better place. More
As usual, Congress has left all the year's major fiscal decisions to the last minute. More