Agency surveys hiring outlook

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By Jennifer DeWitt | Tuesday, July 11, 2006 1:28 AM CDT | () comments

With indications that hiring will remain strong and unemployment low, eastern Iowa employers will be challenged by the shrinking labor pool as they recruit to fill their new jobs, an executive with Cambridge Staffing said Monday.

According to a recent survey by the Cedar Rapids, Iowa-based employment agency, 44 percent of the 102 eastern Iowa companies polled have plans to hire in the third quarter. While down from 57 percent who expected to expand their workforces in the second quarter, the results still point to a strong economy ahead for eastern Iowa.

“It’s not quite as good as last quarter but if you look out over the 12-month period it’s a lot stronger,” said Chuck Roe, Cambridge’s general manager.

However, he said the No. 1 issue across Cambridge’s four eastern Iowa branches is finding good workers to fill the available jobs.

The survey, which Cambridge has conducted 38 times since 1996, sought data about the hiring intentions of 102 companies from Cedar Rapids, Iowa City, Dubuque and Davenport — the four communities where Cambridge has branch locations. The companies surveyed range in size from 10 employees to 2,000-plus.

By sector, 43 percent of the manufacturing companies reported plans to hire while 45 percent of the service companies said they would likely expand in the third quarter. Only two companies surveyed indicated plans to lay off employees.

In all, the companies plan to hire 311 new employees during the quarter — an 18 percent decrease from last quarter’s survey when 383 new employees were expected to be added. The additional hires will increase the companies’ employee headcount by 2.7 percent.

The average hiring wage in the services sector is projected to be $10.26 per hour, a 14-percent increase since the last survey. The manufacturing sector projects starting wages to be $11.30 per hour, a 7-percent increase.

Roe said Cambridge is pleased with the projected growth, which is a reversal from two years ago when employees were plentiful and jobs were scarce. “I’d rather have job orders and have to find workers,” he said. “We’ll find them somehow.”

As area employers prepare to hire, Roe said they will need solid planning and be prepared to offer higher wages to compensate employees for the rising fuel costs. “Gas is a real issue right now – transportation is probably the No. 1 issue for temporary workers. We had one company in eastern Iowa raise its wages $2 an hour to get the workers to come in.”

The issue is particularly important for companies recruiting in the smaller towns, where employees would have to drive 30 or 40 miles to work.

In Cambridge’s 12-month outlook, the survey shows that 54 percent of the companies expect to hire, down slightly from 59 percent in the previous quarter. The companies reported they will add 653 new hires during the next year, which is up from the 469 new hires they had projected last quarter.

“Our economy is realistically as good as we can hope for,” said Mike Cambridge, owner of Cambridge Staffing, which has provided employment services to eastern Iowa for more than 27 years. “We run a slight risk of our energy costs causing inflation and stifling real growth in 2007.”

But right now, he said “We have the problem of balancing full employment with employment shortages especially in the professional and skilled areas. This is a good thing.”

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com.