Productivity Spikes, Employment to Follow?

by SixFigureStart | November 16, 2009

  • My Vault
"At a certain point, people will start to collapse at work."—Lakshman Achuthan, managing director at the Economic Cycle Research Institute, quoted in Slate.

Believe it or not, that statement represents some of the best news anyone looking for a job at the moment could hope for. The reason? Productivity in the third quarter of this year "rose at a 9.5 percent annual rate." That one statistic sums up the reality for many of the survivors that comprise the workforce of today: with less colleagues around to share the load, they're working significantly harder—and most likely for the same salary (if not less). As Achuthan says in the same Slate piece, "If you look at economies over many centuries, you can't grow productivity for 7 or 9 percent for more than two or three quarters."

The only option companies seeking to grow as the recovery starts to take hold, then, is to start hiring. Of course, fear may continue to rule the roost, but there are already signs that some companies have realized that the time for panicked cost-control is coming to an end.

Even if the bigger companies that have been behind the bulk of the layoffs aren't ones that kick-start the hiring process, there's little reason to worry—recent experience suggests that up-and-coming businesses are much more likely to provide the bulk of new employment opportunities anyway. According to the article, "companies less than five years old created nearly two-thirds of net new jobs in 2007."

The message is clear, then; when you're looking for positions, keep an eye out for smaller companies that are ramping up their hiring to take their businesses to the next level. Even better, act on that great idea you've had and start a new business yourself, and become the hirer, rather than the hiree.

Of course, we could also be witnessing a false dawn, getting our hopes up only to have them dashed by another period of consolidation. In which case, the opening quote still suggests at least one burgeoning career option: paramedic.

--Posted by Phil Stott, Vault.com

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