With Paul McDonald, Sr. Executive Director of Professional Staffing Services at Robert Half
With unemployment down to 4.1% according to the Bureau of Labor Statistics, Steve speaks with Paul McDonald, Senior Executive Director for Robert Half, to see what compensation is really like for many professions and to get an idea on where wages and the labor market are headed in 2018.
Robert Half is a publicly-traded staffing company that focuses on professional placements for executive, temporary, and permanent hires, in the areas of accounting, finance, technology, marketing, administration, and legal affairs. As a result, Paul has a really good sense of wages at different positions, employment trends, and corporate HR issues.
War On Talent
In today’s environment, Paul finds that companies are finding it difficult to hire in the areas that his firm specializes in. He calls it a war on talent that is indicative of the really low unemployment rate that’s published by the Bureau of Labor Statistics. While broad-based unemployment is 4.1% and has been steadily declining, unemployment rates in Robert Half’s areas of specialization are even lower, in the two to three percentage range. As a result, a company looking to hire talented individuals is having a really hard time finding the most specialized talent. Steve likens the employee to a buyer and calls it a buyer’s market at this point.
Technology On A Tear
In its annual salary guide, Robert Half is looking at a 4.1% increase in salary in the year ahead, after similar gains in 2017. Salary gains are largely being driven by hiring at technology and finance companies, and Paul doesn’t see a slowdown in the pace at which companies have been investing in technology over the past 15 years or so.
Every organization and every area within an organization needs people with technology skills. It’s baseline knowledge today for those that are in the job market, with companies demanding technology skills of some sort in all their job descriptions today.
Era Of Big Data & Mobile
For instance, he sees companies driving up investments in big data science and high demand for data science experts, something that wasn’t really heard of about a decade ago. But now that companies have invested so much in technology, they need to know what to do with the data, how to store the data, and how to use data to their competitive advantage by analyzing trends in customer behavior, shopping preferences, etc.
In addition, with the spread of smartphones, Paul sees high demand for mobile application development engineers and related skills.
Executive Suite Trends
Moving up the food chain, Steve wants to know how these macro trends are impacting demand for those in the executive suite. Paul believes there hasn’t been a change in demand for core executive skills such as directing, supervising, and managing teams and organizations. What has changed—and what is in demand for executives—is the ability to collaborate. A true leader is a collaborator, someone who has great command of the language, is skillful in front of a crowd and makes good decisions quickly. In addition, leaders need to understand technology’s implications on their business at a macro level and truly lead change.
Robert Half’s Annual Salary Guide
With unemployment near all-time lows and salaries rising, Robert Half’s Salary Guide is a good way to know what your professional market value is. The Guide focuses on each of the five specializations that Robert Half focuses on. Looking ahead, Paul expects to see broad gains in salaries across all five sectors and especially higher salaries in two areas: business system analysts and financial analysts with advanced technology skills, certifications, and specializations in industry.
Paul also sees heavy demand for personnel in the regulatory governance and compliance areas, driven by Dodd-Frank financial regulations. As a result, companies are actively looking for specialized accountants, lawyers, and compliance experts, and Paul expects starting salaries for such personnel to rise by about 3.1%. He expects corporate mergers and acquisitions to continue to drive demand for attorneys in the coming year, with highest demand for mid-level attorneys with four to nine years of experience.
Additionally, Paul McDonald sees solid demand for skills related to eDiscovery in legal matters, where trained individuals analyze reams of legal data to support litigations and other cases.
With unemployment down to 4.1%, the current environment favors employees who have the right sets of skills. If you’re early in your career and wondering what to specialize in or are looking to change careers, Paul’s insights should give you a leg up. And if you already have the skills that he lists as most in demand, now would be a great time to go after that dream job you’ve always wanted.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: With employment running at 5.1% according to government statistics, I wanted to drill down a little further to see what compensation was really like for many professions and get an idea if wages were expected to rise this year or really what the condition of the labor market was.
To this effect, I’ve invited Paul McDonald. Paul is Senior Executive Director for Robert Half, and he joins me today to discuss. Welcome to the show, Paul.
Paul McDonald: Thank you, Steve.
Steve Pomeranz: Paul, quickly for those who don’t know Robert Half, what is this company?
Paul McDonald: Robert Half is a staffing company that was established in 1948. We focus in on the professional level of placement, temporaries, permanent, direct hire placement in the areas of accounting and finance, technology, creative and marketing, administrative, and office support as well as legal.
As I mentioned, 1948 was when the founder of the company, Robert Half, formed the company. We’re based in Menlo Park, California. We’re publicly traded on the New York Stock Exchange.
Steve Pomeranz: Very good. You guys really do know what’s going on with wages. You see, you negotiate, you help place people in different positions. What would you say the state of the condition of the labor market is today in your particular areas?
Paul McDonald: Sure. We’re a worldwide company. I’ll focus in on the United States at this point for context.
Steve Pomeranz: Good.
Paul McDonald: We’re finding that the companies are finding it difficult to hire in the areas that we specialize in. It’s a war on talent. That war is indicative of the unemployment rate that’s published by the Bureau of Labor Statistics.
The broad-based unemployment, as you mentioned, is in the mid-fives for the past 12 months. It’s been coming down, but when you drill down into that number, Steve, you find that unemployment rates for our areas of specialization, accounting and finance, technology, in the two to three percentage range. The balance, if you will, is on the job seeker or the employee. The company looking to hire individuals is really finding it difficult to find some of the most specialized talent today.
Steve Pomeranz: If the employee is the buyer, let’s say, it’s a buyer’s market at this point.
Paul McDonald: I would say that’s accurate. We’re finding that in terms of salary. Our predictions, as you mentioned, are, we’re going to talk about wages. Since 1950, Robert Half has put a salary guide. We’re looking at 2016 as an overall increase in our areas of specialization of 4.1%.
Steve Pomeranz: How does that compare?
Paul McDonald: I mean, when you look at it for last year, at 3.8% what we looked at for 2015. That’s coming true right now. We’re finding that with our clients and the placements that we’re making.
Steve Pomeranz: What are the issues that are driving this? Obviously, technology is very active and very robust right now. We all hear about technology companies and really the golden age we seem to be experiencing in that area. You mentioned finance as well. Is it a lack of qualified employees that’s driving up not enough supply or is it just so much demand?
Paul McDonald: Well, it’s a little of both. I would say from a company perspective, when you look at technology, companies have been investing in technology for the past decade, for the past 15 years or so. It’s not slowing down in terms of the investment.
Every organization, every area within an organization, needs people with technology skills. It’s baseline knowledge today for those that are in the job market. We’re seeing all companies demand technology of some sort in the job description today.
That investment is driving the need for big data engineers or big data science, just for instance. You hadn’t heard much about big data, maybe a decade ago, but now that we’ve invested so much, we’ve seen our companies and clients invest so much in technology, they need to know what to do with the data, how to store the data, what does it mean in terms of customer behavior, client behavior?
Everyone is looking for big data engineers, analysts, scientists. The other side of it is mobile application and mobile application development. Organizations that are servicing the community are everything mobile. They want to be found. That means that their product or their service needs to be found through a smartphone or some PDA device.
Steve Pomeranz: Sure, I get that.
Paul McDonald: As a result, we’re finding a lot of demand in that area.
Steve Pomeranz: What about demand for those in the executive suite? What kind of skills are looked for in that area?
Paul McDonald: Well, in the executive suite, I mean, as you move up the organization chart in any key position, we’re finding that, obviously, you have to have competency in directing, in supervising, in managing, and that hasn’t changed.
Steve Pomeranz: Yeah, that’s nothing new.
Paul McDonald: I find what is more highlighted today, is the ability to collaborate. The true leader is a collaborator, someone who has a great command of the language, skillful in front of a crowd, and then moves quickly. It’s environment, work environment, business environment. As things happen, it’s never before seen, Steve, but you have to be able to adopt new technologies, new ways of doing things, and being truly lead change, the change being good.
Steve Pomeranz: A lot of those characteristics can define someone who runs a small business too, being able to handle all kinds of change as it’s coming at them at light speed. In a sense, it’s no different, it’s just your ability to lead and ability to move the organization towards the future.
You mentioned the salary guide, which I found really informative and incredibly fascinating. By the way, you can find that salary guide on the Robert Half website. Yes, the last name is half, like half of a whole, that type of half, and also we’ll post it on our Steve Pomeranz website, or if you come to stevepomeranz.com and request it, we’ll send it to you as well as a PDF link. What are some of the features of that salary guide? What can a person expect to find when looking through it?
Paul McDonald: I would say, I touched on technology real quickly. We have a guide for each one of these five specializations in which we focus in on. Accounting and finance guide, I think what you’d find is that the average salaries, starting salaries, for 2016, are expected to rise 4.7%.
Truly, the demand is coming from two areas. Business system analysts are in demand, staff accountants, financial analysts, and as I mentioned before, advanced technology skills, certifications, and specializations in industry really are commanding higher salaries.
What’s driving a lot of that accounting and finance need would be the regulatory environment that we’ve operated in, in the past few years and the corresponding compliance with those regulations.
Always in need has been individuals with security exchange background, reporting analysts. Dodd-Frank is driving some of that as well as some of the international banking laws. We’re finding that, again, employment rates in that area are extremely low and the demand is high.
Steve Pomeranz: What about the need for legal employees? Employees that specialize in legal affairs?
Paul McDonald: Steve, the need for the legal in the legal field, starting salaries are anticipated to rise 3.1%. What’s driving there is, again, there’s compliance area. There’s a lot of acquisitions and mergers and sales that have happened in the past 12 months, which will continue. There’s a lot of changing of business hands. That drives the need for attorneys.
Specifically, we’re seeing the highest need in the four to nine-year range for these attorneys, with experience, but that middle band is going to command the highest starting salaries next year.
Additionally, eDiscovery. Electronic discovery within legal matters, suits, so forth. The computer is allowing these individuals, these are the plaintiff or the defendant, to be able to find data, again, back into the technology arena, and be able to extract that and then know what to do with it. That eDiscovery area is truly driving a lot of demand.
Steve Pomeranz: My guest is Paul McDonald, Senior Executive Director for Robert Half. We’re talking about the 2016 salary guide. Unfortunately, Paul, we are out of time, but for more information about this, you can join the conversation at stevepomeranz.com. Ask us and we’ll send you the guide or you can go to the Robert Half website and it’s prominently displayed. Thank you so much for joining us, Paul.
Paul McDonald: Thank you, Steve. Have a good day.