NEW YORK (MONEY Magazine) -- If you've made it this far into the toughest job market in decades without being laid off, chances are you're out of the danger zone.
"While businesses may not be hiring a whole lot next year, they won't be firing a whole lot either," says economist Joel Naroff.
ost economists agree that the worst is behind us, and that new job creation will pick up modestly as the year wears on. But worries about the slowpoke economy and the possibility of a double dip will keep companies from adding enough positions to make a serious dent in joblessness.
The consensus among 46 forecasters recently surveyed by the National Association for Business Economics is that the unemployment rate will end 2011 around 9.2%, from 9.6% now. It'll take another six years for unemployment to get back to pre-recession levels, according to estimates by the Congressional Budget Office.
Still, if you're a valued employee, the outlook is much brighter, as employers will focus on retaining and developing top talent rather than new hiring.
"Raises are back and for good reason," says Catherine Hartmann, a principal with Mercer's rewards consulting business. "The risk of losing key employees is top of mind as the economy recovers."
Nearly all companies intend to increase salaries this year -- by an average of 3%, according to Buck Consultants -- and to reward the best and the brightest with pay hikes nearly double the going rate. More employees can look forward to bonuses, too, with the amounts awarded going up.
How will this affect frictional employment? Will people be able to leave jobs for better ones or will employers be uninterested in new candidates, even if they are better candidates?
ReplyDeleteFrictional unemployment will tend to decrease (at least at the top end). If people are receiving higher bonuses then there is a greater incentive to stay with current employers. It doesn't make sense to roll the dice in the current state of the economy. How will this affect the housing market? Will there be more people entering the market if they believe their job will be long term?
ReplyDeleteSo it's going to take another six years to get unemployment back to pre-recession levels? The good news is that companies plan to retain their top talent, but to me, knowing companies aren't planning on hiring back people right away is bad news to me because I'm graduating in less than 4 weeks and I am going to be entering the job market. I really hope this job market picks up in 2011 so I can get hired sooner than later.
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