Is the North Bay job market recovering? Yes, say the experts: slowly but surely.
Unemployment remains high, and a likely reason for the large number of discouraged job seekers is the volume of people who’ve been unemployed for more than 27 weeks. The Wall Street Journal reports that 7 million Americans have been looking for work for at least that long, and the majority of them, 4.7 million, have been out of work for a year or more. In California, the number of people out of work for more than 27 weeks is almost 900,000—more than the population of San Francisco. But are things beginning to shift?
Hiring begins
Staffing companies are often the first to experience movement when employment begins picking up after a period of decline in the job market. Kelley Hartman, regional vice president for Nelson Staffing, notes that manufacturing is the first industry that’s come back in the North Bay during this recession. Also according to Hartman, the North Bay branches of Nelson Staffing have experienced a 43 percent increase in temporary staffing in the first six months of 2010 as compared to the same period in 2009. This includes a dramatic increase in the demand for assembly, production and warehouse workers. Slower to recover has been the demand for clerical and administrative employees.
Hartman has been working in the industry for 20 years and has weathered other recessions. “Recovery has been different than we anticipated [this time]. Nelson has been around for 40 years and, collectively, we’ve been through a number of small and large recessions. Based on our experience, immediately following other recessions, companies are normally very hesitant to bring employees on to their payrolls until much longer into the economic rebound. This recovery has been very different, in that employers seem much more optimistic and are converting many of our temporary employees quickly onto their permanent payroll,” says Hartman. “Our direct hire business is up tremendously in the last three months. This is exciting, because it’s a good indicator that the market is continuing to improve.”
She’s also starting to see more temporary workers being converted to the client’s payroll even after short-period temporary assignments. Businesses will hire temporary workers to fill in gaps for workers who are on leave or vacation, or on short-term projects. They also hire temps when they’re feeling cautious about expansion and want to “test drive” the terrain.
Jim Geist, regional manager of Nelson and Associates, specializes in placing personnel in the areas of accounting and finance. Geist says, “The market is back. It was unequivocally a different market in June than it was six months earlier in December.” His division had more placements in the first six months of 2010 than it did during the entire year of 2009.
Geist says many companies cut their number of employees and tried to absorb some of the jobs internally by combining positions or shifting duties of the eliminated personnel to employees who remained. Throughout 2010, he saw a dramatic increase in the hiring of general executive positions such as directors of finance or controllers, as well as hiring for more specialized rolls such as cost accountants. “There was a great amount of trepidation. Confidence in the market is still lagging, but I’m starting to see companies that are optimistic about the future,” says Geist.
Other progress he’s starting to see includes more people who are already working looking for new job opportunities. During the past year, if someone had a decent job, they held onto it, not willing to risk starting something new. Nelson & Associates recently extended a job offer to a candidate at a pay increase that would equal 10 percent more than she was currently making. Her employer counter-offered with an additional 15 percent over the offer, something Geist hadn’t been seeing during the last year. Geist notes that, when companies had to scale back, they kept their most valuable employees. They still don’t want to lose them, and some are now able to pay more to keep them.
Lisa Rogelstad, co-owner and CFO of Star Staffing, a certified Woman Owned Business, says her company revenue was up 200 percent in June 2010 over June 2009. Even though the big picture might not look better, Rogelstad says the staffing industry sees the increases first and believes the hiring trend will continue. Star Staffing, like Nelson, is seeing a lot more requests for specialty positions. “Employers are a little more picky now. They know there are lots of good people out there, and really want candidates to be checked out thoroughly and to have their skills tested,” says Rogelstad. She, too, is seeing an increase in hiring for manufacturing, the wine industry, general clerical positions, supervisors and executive assistants.
The staffing industry’s internal hiring follows the external flow of work that’s generated. Star Staffing recently hired two new staff members, for a total of 15 employees, to help handle the additional workload. More than a year ago, Star Staffing started a division, Star H-R, to expand its services to specifically target recruitment in the fields of accounting, financial, technical engineering and a wide range of executive level jobs—but it didn’t really announce its launch until this year. “We’re now ramping up exposure,” says Rogelstad, in light of the current surge of business. Nelson and Associates is growing its team, too, having recently hired Deja Lightner, a 12-year staffing veteran, as new vice president of business development for the North Bay, and Jenny Ponce, a tenured local recruiter, as recruiting manager.
Forging ahead
Marin, Napa and Sonoma counties are seeing similar patterns of job employment growth, though each has unique areas of business emphasis. Robert Eyler, Ph.D., is chair of the economics department at Sonoma State University as well as the economic sustainability coordinator for the Marin Economic Forum. Eyler says 92 percent of businesses in Marin have less than 50 employees. Some of the bigger companies are in the areas of digital filmmaking, software design, health care and a growing biotech cluster. There’s also an environmental technology movement that’s starting to see a small but recognizable amount of growth.
He issues a word of caution about the rising employment trend. “We need to see some industries step forward and take the lead, take some risks. We haven’t seen it happen yet. We need to be more proactive to get some industrial growth over the next six months and the next six years,” says Eyler. He says unless we get some forward movement, we risk losing any of the gains we’re seeing now.
Ben Stone, executive director of the Sonoma County Economic Development Board, likens this economic recovery to a bad hangover. “You want it to end but it goes on and on. The pain gradually starts to reduce, just not as fast as you wish it would.”
Sonoma County has consistently kept its unemployment rate below the California average (12.9 percent in the last quarter of 2009) but in March, it was above the national average, hovering around 10 percent. The good news is that business executives’ optimism about the county’s economy as a whole rose to 5.04 in January 2010, an increase of 9.6 from Summer 2009, according to the EDB’s Sonoma County Business Confidence Index. “That’s important, because if there’s confidence, businesses will hire people, buy more equipment locally and there will be more tangible signs for recovery,” says Stone. “It’s a virtuous cycle.”
Consumer confidence is also up nationally, at its most in June, with a third consecutive monthly gain, the highest since March 2008. That means retail is selling, and is why we see a need for more manufacturing.
Says Lisa Batto, president/CEO of the Napa Chamber of Commerce, “A few of our local manufacturers are ramping up their productions again with new hires. I spoke to one of our members in the trucking industry, and he said he’s taking advantage of the increased interest in business because he was able to maintain his staff through the downturn. As his competitors are now scrambling to hire, his business is meeting the demand and picking up a greater share of the market in the process. I suspect this is happening in other sectors that were able to continue to invest in their businesses through the downturn and are now reaping the benefits because they were in the prime position to take full advantage of the upswing.”
Advice for job seekers
If you’re still out there looking for a job, what can you do to get a leg up in this market?
Hartman, Geist and Rogelstad all have similar words of wisdom. “Stay positive and active,” says Geist. Even if you’ve been in a long job search, all three staffing professionals say it’s important not to go to job interviews sounding pessimistic. They also say you should keep track of your accomplishments and include them in your cover letter. Getting out of the house and volunteering can help you network as well as give you experience in your desired field, something you can use on your résumé and in your cover letter, and temporary assignments are often a great foot back into the job market, because you and the company have an opportunity to do a “working interview,” which can eliminate the competitive résumé and interview process. Hartman says Nelson Staffing has tutorials to help people brush up on their computer skills.
Developing a relationship with your staffing professional is also important. Even if you’re employed but interested in other job opportunities, don’t let more than three months go by without talking to your recruiter. If you’re unemployed, your recruiter will let you know how often you should check in, usually every one or two weeks.
Kathy Young, Job Link manager for the County of Sonoma (part of a nationwide One-Stop Career Center system funded by the Department of Labor), helps applicants become better job seekers. “Most people aren’t used to marketing themselves,” says Young. Job Link also has a job board that was slim last year but is now full. “There are quite a few positions in the culinary arts, positions available for machinists, IT and banking are also becoming available, along with companies that are looking for project managers on a time-limited basis,” she says.
Whether in good times or bad, a tried path to generating job leads is through networking. Learn how to best promote yourself, she advises. As jobs become available, people with strong networks will often find out about a position before it even gets advertised. Young advises it’s always good to stay connected through professional associations and formal and informal groups.
Moving forward
Although thousands of people in this area lost their homes and many are still trying to modify or refinance their loans, housing has become more affordable for the masses. As measured by Moody’s Analytic’s housing affordability index, Sonoma County’s housing affordability is much improved, with a median income-earning family being able to afford a house priced at 82 percent of the median sales price. Stone says this may encourage business expansion in the area. Companies traditionally like to set-up in places where their employees can afford to buy homes.
In a report prepared by Moody’s Analytics, The Business Cycle Turns Up: A Path of Recovery for Sonoma County, it’s predicted that economic recovery will take firmer hold as this year progresses. Moody’s says Sonoma County’s economy will accelerate in late 2010 and into 2011 as improved macroeconomic factors begin to fully support the county’s basic industry clusters. The forecast is for improved consumer spending that helps sustain the hospitality industry as well as strengthen domestic wine consumption. More confident consumers are expected to combine with stable business investment spending to drive the county’s technology-producing industries. By 2011, the predictions are for an economic turnaround that generates broader demand for a range of business, personal and creative services. The improvement in the local economy should result in accelerated job growth by the second half of this year. The cost of doing business has also gone down in our region. For instance, office rents are lower, due to the distress in commercial property, and rent affordability encourages growth of new and expanding businesses.
The longer-term outlook for the wine industry looks promising as well. Rising wine consumption abroad, especially in China, and the potential for stronger Asian currencies will likely support increased wine sales. The wine industry should also benefit as additional members of the millennial generation (people currently aged 15 to 32) continue to reach legal drinking age. According to the Wine Market Council, millennial wine drinkers are already embracing wine consumption at a faster rate than earlier generations, and have been more willing to trade up to higher-priced wines.
Keith Hembre, chief economist at First American Funds, has said that continued weakness in housing and high debt levels by households and governments could hold the economy back for some time. Some economists even warn that we could be heading into a double-dip recession. However, there’s bound to be a time that will clearly mark the end of the recession. Perhaps the rise may be like the one in Aesop’s legendary fable The Tortoise and the Hare—where slow and steady wins the race, at least in the long run.
TriVascular Returns
TriVascular, a medical device company that focuses on aortic repair, restarted in its previous Santa Rosa location in 2008. Its initial product offerings are novel endovascular stent grafts, which are focused on significantly advancing endovascular aortic repair. With a global market for aortic stent graft systems predicted to reach $2 billion within five years, it’s poised for success.
In May, TriVascular announced that the first U.S. clinical trial implant of its Ovation Abdominal Stent Graft, a system that promises to significantly increase the pool of candidates eligible for minimally invasive treatment of aortic aneurysms, was performed at the Prairie Heart Institute at St. John’s Hospital in Springfield, Ill. The Ovation system is currently undergoing clinical testing in Europe, where it’s expected to launch by the end of this year. In preparation for the anticipated demand, TriVascular will be expanding its current workforce of about 250 personnel by adding 100 jobs in Santa Rosa during the next nine months. Additional staff will also be hired for subsidiaries in Europe.
Positions will range across all different functions and levels from research and development, quality, regulatory, manufacturing, sales, marketing and finance. “Going commercial in Europe this year will mark a new and exciting phase for our company,” says Mike Chobotov, president/CEO and cofounder.
Boston Scientific acquired TriVascular in 2005 and closed it in 2006. Twenty-one months later, it was relaunched, bought back by Chobotov, Robert Whirley and Joseph Humphrey, along with former and new investors. Two-thirds of the current employee base are alumni of the original company. “We have an incredible pool of talent that remained accessible for our relaunch,” says Chobotov.
Chobotov, Whirley and Humphrey selected the company’s initial location here more than 10 years ago. While their consulting business took them all around the world, they wanted to live where they and their employees could enjoy the quality of life. There was also a growing tech sector in the area, which remains home to other vascular and med-tech companies.
Chobotov notes life-saving medical device businesses are less vulnerable to economic cycles than other products. He does say that during the last year, new enterprises, in particular, have had more difficulty getting started, but some existing ventures have still been able to attract funding. He does see some signs that venture capitalists are starting to invest again in med-tech and health care sectors. “The IPO window seems to be opening a little bit,” says Chobotov. As for his company, he remains encouraged by the potential patient benefits being demonstrated clinically, response of physicians and investors, and the top talent TriVascular continues to attract. With the current housing market, his most recent hires will even be able to afford to buy a home.
