Downsizing No Longer Main Corporate Theme Management Survey Shows U.S. Corporations Are Back In Job-Creation Mode

U.S. corporations added jobs at a quicker pace this past year, more than offsetting positions eliminated in business makeovers, according to a management survey.

“Downsizing is no longer the dominant theme of change in the U.S. work force,” said Eric Rolfe Greenberg, director of management studies for the American Management Association.

The group’s report, released Sunday, said 68 percent of the 1,441 large and medium-sized companies surveyed created jobs during the 12 months ended June 30. That was up from 58 percent in the year-earlier survey.

At the same time, 49 percent of the companies said they snipped jobs in the year ending in June, compared with 50 percent in the year-earlier questionnaire.

Overall, the average work force among the responding companies grew 6 percent, compared with a gain of 4.5 percent in the previous survey.

Companies are redoing their work forces “to better meet today’s complex and rapidly shifting market demands,” Greenberg said. “For almost every job eliminated, another was created.”

“A new picture of the American work force has emerged in which downsizing, a staple of corporate vocabulary, has actually become a misnomer,” he said. “Companies have learned that smaller is not necessarily better.”

In its 10th annual survey, the group found more companies eliminating jobs after reshuffling operations, dropping, for example, a unit or a supplier. Positions also were pared during a reworking of technological processes.

Fewer companies dismissed workers because of a lack of demand for their goods.

Of those reporting job losses, slightly more than half were in wholesale or retail trade or offered business and professional services, such as lawyers and accountants. A little under half were in manufacturing and financial services.

Large companies were more likely than smaller ones to report cutbacks.

By region, the Southwest and West suffered the biggest hit in jobs, with 56 percent of the firms there reporting cuts. Fifty-three percent of companies in the mid-Atlantic region shed jobs as did 47 percent in New England, 46 percent in the South and 45 percent in the Midwest.

“Salaried workers in general, and middle managers in particular, continue to bear the brunt of corporate reductions,” the survey said. Middle managers represent 5 percent to 8 percent of the work force, but typically sustain 15 percent to 20 percent of the cuts. On the other hand, job gains were recorded throughout the economy.

About 74 percent of the companies offering business and professional services added positions in the past year, up from 68 percent in the previous report. Wholesale and retail companies were not far off, with 72 percent saying they hired new workers over the last year, up from 53 percent. Nearly 70 percent of manufacturers and financial services firms created jobs.

Nearly 60 percent of the new posts were hourly jobs, with about one-quarter in professional or technical areas. The results indicate the new jobs require less supervisory and managerial expertise and more technological know-how.

All regions of the country reported new hires. But the Pacific Northwest edged out the others, with 72 percent of the companies adding jobs, closely followed at around 71 percent for the Southwest, West and Midwest.