The best jobs in the hottest markets

(Business 2.0 Magazine) -- Robert Youngjohns has a problem that most CEOs would envy. His company, San Jose-based Callidus Software, is expanding so fast he can't find enough workers to fill all the job openings.

Callidus, which sells software that manages bonus and salary formulas for large corporations, clocked $76 million in revenue last year while adding 70 people to its payroll of 300. This year Youngjohns wants to hire 100 more engineers, project managers, and compensation consultants.

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Trouble is, resurgent Silicon Valley startups and giants like Google and Yahoo are stealing away the top talent, stalling Callidus's recruitment drive. As of April 1, the company had 40 openings that had gone unfilled for more than two months. "Our biggest single issue is lack of people," Youngjohns says.

What's bad for Youngjohns, of course, is good for job seekers looking to exploit their leverage. Now for the flip side: Around the rest of the country, stories like Callidus's are becoming the exception, not the rule.

The job boom that workers have enjoyed since 2004--the most prosperous stretch of hiring since the late 1990s--has begun to stall out. Despite the better-than-expected jobs report in March, top forecasters expect employers to generate 1.9 million fewer new jobs during the next two years than they did in the last two. In a free market as hair-trigger-sensitive as the great American jobs bazaar, that's a major swing.

None of this should come as a big shock. The hissing sound coming out of the U.S. housing bubble has taken a toll, as have the recent struggles of U.S. automakers and other manufacturers.

Most forecasts, in fact, see the economy growing by about 2 percent this year, after a stellar 3.5 percent annual average over the four previous years. And productivity growth--the bane of all workers--is poised for a painful uptick, since most companies' first defense against a slowdown is to turn up the heat on their employees.

"The labor market is going to take a double hit," says Brian Bethune, a U.S. economist for Global Insight. "You have a slowing economy, and managers start to put on the squeeze."

That's not to suggest that highly skilled workers--such as those at tech firms like Callidus--won't have options. There will still be an estimated 1.7 million new jobs up for grabs this year, sufficient demand to keep unemployment hovering near historical lows.

If anything, the hiring cooldown simply suggests that landing your dream gig won't be a slam dunk. It will depend more on who you are, and where you are, than it did during the boom. "As things slow we're going to have a bifurcated market," says Phil Hopkins, a labor economist at a Philadelphia economic development group. "It will stay relatively strong at the upper end, but the lesser-skilled jobs won't grow as fast as they have because they're more susceptible to cost cutting."

With that in mind, we turned to two top economic research firms, Global Insight and Moody's Economy.com, with this query: As the labor market cools this year and next, which regions around the country will stay the hottest, and for what types of jobs?

The answers--which we expanded into 10 regional profiles--turned up a few surprises. While forecasters see Silicon Valley staying hot for tech and Web 2.0 workers, it won't have enough large-scale growth to break the top 10.

The safest havens, it turns out, are familiar growth magnets like Orlando and Raleigh in the South and Las Vegas and Phoenix in the West. And all of the top markets share at least one of two characteristics: Either they're still reaping the benefits of continued migration of workers from Rust Belt cities to warmer climes south and west, or they're riding renewed growth in job-seeding sectors such as communications and medical technologies, digital entertainment, and high-end manufacturing like aerospace.

Which occupations will enjoy the greatest demand within these markets? To find out, we pooled data from compensation experts at PayScale, Radford Surveys & Consulting, and the New York-based Conference Board. The surprise here: It's not service-sector McJobs driving most of the growth. Hiring for occupations in what economics professor and author Richard Florida calls the "creative class" is the catalyst in most of the big cities topping our rankings.

Las Vegas, whose economy has always lacked a big share of college-educated workers and tech industries, is an intriguing example of the phenomenon.

The job growth it has lost because of the housing-market bust has been more than offset by continued population growth and a recent surge in tourism from abroad, thanks to the dive in the U.S. dollar. The new spending is helping to add openings not just for pit bosses and exotic dancers but for thousands of white-collar workers.

Two positions in the highest demand right now are IT project managers and business unit managers, according to Richard Vosburgh, a human resources VP at MGM Mirage, Vegas's largest employer. "There are slowdowns in other parts of the country, but we're not feeling it here," he says. "Finding people is so hard that we have to look nationally, and fill our pipeline with college recruits."

Hiring for professionals like lawyers, accountants, and consultants, in fact, will grow by 13 percent in Vegas for the next two years double the region's overall rate. "When it comes to job creation, few things trump population growth," says Jeannine Cataldi, a senior economist at Global Insight. "The more people you have, the more accountants you need to do their taxes and the more lawyers you need to help them get divorced."

The biggest challenge for U.S. workers during a slowdown is that when just a handful of cities are generating most of the growth, job mobility in the rest of the nation suffers. Even if the economy heads for a "soft landing" from its five-year expansion, the job-growth gap between haves like Vegas and Orlando and have-nots like Detroit, Cleveland, and cities in California's Central Valley could widen.

Dragging down the latter, forecasters say, is their concentration of lower-skilled occupations in struggling industries such as auto manufacturing and homebuilding. The numbers dribbling out of these old-economy hubs are so negative that they're "overshadowing the revival going on in the better half of the economy," says Global Insight's Bethune.

Aside from the metros that top our rankings, it's also revival time for certain sectors in Los Angeles, greater New York, and the San Francisco Bay Area. The reason they didn't break our top 10 is the law of large numbers. Their workforces range between 3 million (San Francisco) and 9.3 million (New York), so registering overall job growth of 5 percent or more during the next two years would require an improbably high volume of new jobs.

Yet in Silicon Valley, the companies that dominate the job market--Apple (Charts, Fortune 500), Cisco (Charts, Fortune 500), Google (Charts, Fortune 500), Hewlett-Packard (Charts, Fortune 500), Oracle (Charts, Fortune 500), and Yahoo (Charts, Fortune 500)--are still hiring in full force. And the Web 2.0 phenomenon is creating spot shortages for website builders, creative directors, and even blog editors.

"I never thought it would be so difficult to find engineers," wrote James Hong, co-founder of blockbuster dating site HotorNot.com, on the popular tech blog Valleywag. "It's to the point where I am thinking about going to the [bus stop in San Francisco for the Yahoo shuttle] and holding up a jobs sign."

The takeaway for millions of job seekers is simple enough: Enjoy it while you can.

Paul Kaihla is a senior writer at Business 2.0.