Hiring up, but so are numbers of jobless

Area economy still seen as vibrant despite a tilt toward skilled workers.

Austin-area employers keep adding jobs fast enough to absorb the region’s expanding labor pool, but recent workforce data suggest a job market that’s increasingly skewed toward skilled workers despite the region’s broad-based payroll growth.

While the competition for white-collar and high-tech talent raged on during the first quarter of 2017, the number of unemployed workers — most of whom have less training or education — also remained at elevated levels compared with recent years.

The number of unemployed workers in the area rose to nearly 42,000 in February, reaching levels not seen since 2014, according to the Texas Workforce Commission.

That figure dipped to 41,256 in March, but it remained 20 percent higher than the same time last year, according to preliminary data the commission released Friday.

The metro area’s unemployment rate dipped to 3.6 percent in March from 3.7 percent the prior month, the commission said. In March 2016, the regional jobless rate was far lower, at 3.1 percent.

But despite concerns about the unemployment rolls, Austin’s labor market remains vibrant.

The rising number of jobless workers stemmed in part from an influx of people back into the official labor force, generally a signal of optimism for job prospects.

And while the unemployment rate has risen higher than last year, it remains well below the state and national figures.

According to seasonal adjustments calculated by the Federal Reserve Bank of Dallas, the Austin-area unemployment rate held steady in March at 3.6 percent. The statewide seasonally adjusted rate ticked up to 5 percent in March from 4.9 percent the prior month. Nationally, it dipped to 4.5 percent from 4.7 percent.

Austin-area employers continued to create jobs at a rapid pace, adding 9,500 positions in March, up 0.9 percent from February and up 3.3 percent over the past 12 months, according to the commission data.

Of the 43 job categories broken out in the commission’s data for Austin, only three subcategories had smaller payrolls in March than they had in March 2016.

Virtually no local workforce expert would argue Austin’s job market is struggling, but its strong tilt toward highly skilled workers raised some concerns.

The fact that the labor force’s growth has outpaced hiring in recent months is a minor concern, said Drew Scheberle, senior vice president of workforce development at the Greater Austin Chamber of Commerce.

But more troubling, he said, is that much of Austin’s job growth is emerging from industries in which staffing levels depend on population growth — construction, education, hospitality and retail.

“Last week’s decision by Austin City Council to pave the way for Merck to locate 600 biomedical jobs (here) will help Austin diversify industry and help us weather economic shifts,” Scheberle said.

Several Austin City Council members noted concerns about providing tax incentives for the highly skilled, highly paid jobs Merck would create. Just weeks before approving the Merck deal, the council had passed a resolution calling for more-targeted use of subsidies to attract middle-wage jobs.

Company and city economic-development officials said Merck’s new technology center would generate hundreds of local jobs in support of its eventual 600-employee operation.

Regardless of the types of jobs that would emerge around Merck and the new health care innovation district around the Dell Medical School, the health care sector is expected to be a major driver of middle-tier jobs throughout the metro area — as it already has been for years.

While population growth influences staffing levels in the health care and social assistance industries, employment in that segment has grown far faster than the Austin population.

Thanks in part to a fast-growing senior demographic in Austin and the nationwide transformation in health care delivery and economics, local employers in that sector have expanded payrolls by more than 20 percent during the past five years, compared with a roughly 12 percent increase in the metro area’s population.

Yet Austin’s high-tech, high-skill, white-collar companies continue to fuel much of the region’s growth. The professional, scientific and technical services industries have expanded job totals by 45 percent over the same five years.

These and other highskill occupations, such as accounting and finance, have grown so fast they’ve seen little relief from the region’s labor force growth.

“The unskilled space is where you will see more of that trend,” said Dave Benjamin, Austin branch manager of finance and accounting for Addison Group, a national staffing firm. “I haven’t (seen it), and I don’t know what would impact that there, other than people migrating in from around the state.”

What Benjamin and other workforce experts are seeing is an increase in demand for skilled contractors and churn among full-time employees — both of which suggest a tight labor market.

“We’ve seen an uptick in the temporary contract space, which his good for our business,” Benjamin said. “We’ve seen it in our (accounting and finance) field in particular, but also in some of the other verticals, including health care.”

Yet the demand for accounting and finance talent — as with high-tech and health care — continues to favor workers, said Holly Dary, director of permanent placement services for the Austin office of Robert Half, the staffing firm.

Workers in this environment are more willing to leave their current jobs for better options elsewhere, she said, whether at a startup building out its corporate staff or a new company moving into town.

“Competition for talent is pretty fierce right now,” Dary said. “Last year, the best candidate might’ve been able to explore one, two or maybe even three opportunities. Now, it’s not uncommon at all to have multiple offers.”

Every position they turn down, she said, becomes an opportunity for a contractor to come in and fill the gap.