Companies Delay Hiring Plans Amid New Signs Of Economic Weakness Drop In Help-Wanted Ads Reflects Slack Labor Market

Help-wanted ads in newspapers fell in November as businesses held off looking for workers because of concerns about future economic weakness, a report by the Conference Board showed Thursday.

Job experts said many businesses are deferring hiring until after the New Year. Poor Christmas sales and the government shutdown have given employers the jitters about how business will fare in 1996.

“There’s real cautiousness about hiring,” said John Challenger, head of Challenger, Gray & Christmas Inc., a Chicago-based outplacement consulting company.

The Conference Board’s help-wanted advertising index, a barometer of regional job conditions, fell to 127 last month, down from 131 in October and 134 in November 1994.

The index, based on a scale of 100, is derived from the volume of employment ads appearing in 51 major newspapers across the country.

The negative reading on employment demand comes a day after a pessimistic report on consumer confidence, also published by the Conference Board. Consumer confidence is largely tied to the outlook for jobs.

Overall, job ad volume has remained relatively stable in the last five months after rising through the first half of the year, the research group said.

Noting that initial unemployment claims have edged higher in recent weeks, Conference Board economist Ken Goldstein said, “There is growing concern that the economy’s performance may decline during the next six months, spurring a new round of layoffs.”

October and November were the second- and third-largest layoff months of the year, according to a Challenger, Gray & Christmas survey. Employers let 41,335 workers go in October and 41,293 in November. The biggest layoff month was in May, when employers announced they were slashing 58,530 jobs.

Cost-cutting programs fueled most of the layoffs, said Challenger. Companies are shedding operations deemed redundant. Others are laying off people as a result of mergers and acquisitions.

Most companies were thought to be gearing up to hire in 1996 after this year’s cutbacks, but concerns that business will sag if the economy slows down has caused many to delay such plans. Companies that are suppliers to the government are waiting for lawmakers to resolve the budget impasse.

“Restructurings have pulled companies into a tighter mode, so they’re not hiring, or at least not expanding their businesses,” said Roger Herman, a workplace consultant at Herman Associates, in Akron, Ohio.

Rank and file workers have been hit harder by corporate downsizing and mergers than managers who make more than $50,000 a year, said Tom Rodenhauser, editor of Executive Recruiter News, a trade publication based in Fitzwilliam, N.H.

Corporations tend to use search firms rather than help-wanted ads to fill management positions, which may partly account for the fall in the advertising index, said Rodenhauser.

Regionally, help-wanted ad volume declined over the three months from September to November in six of the nation’s nine major areas.

The largest increase was a 9.5 percent gain in New England.

The biggest drop was in the East North Central region, where volume fell 9.7 percent over the period.