Labor Market Update for the Pacific Northwest
February 2007

This article includes excerpts from the winter 2007 edition of Applied HR Strategies' HR Intelligence Newsletter.

Northwest area labor markets remain healthy, but growth likely to slow in 2007
Data for November 2006 shows unemployment rates of 5.0%, 5.3% and 3.3% respectively in Washington, Oregon and Idaho. The national unemployment rate was 4.5% during the same period. The strongest areas of growth in most part of the NW include construction (a northwest anomaly), aerospace (in WA), and software and technology, in general. Job growth was greater in the northwest than in most other areas of the country, but most economists predict slower growth in 2007, albeit, still faster in the northwest than in other areas. Most economists and prognosticators are pegging growth in northwest employment from 2.0% to 2.9% in 2007, but still much higher than the 1.2% growth predicted for the nation as a whole. The 2-3% growth predicted for 2007 should still be enough to keep wage growth on an upward arc, especially in the tightest areas, such as for experienced technology, accounting/finance and other professionals. While wage growth has been very strong in some hot areas, Applied HR Strategies expects wage growth to moderate in 2007, even in most “hot” areas.

Experienced engineering, technology and accounting/finance roles are strong
Technology sector job demand and growth is quite healthy, with estimated wage growth in the upper single digits in 2006, according to AHRS’ research. Employment for software publishers was also in up in the high single digits in WA State, so it’s no surprise that wages have followed suite. In addition, many employers report strong wage growth and difficulty in hiring experienced professionals in many different technology roles (especially engineering and related), and in accounting and finance roles. Experienced accounting and finance jobs, a once-placid job category, has heated up in today’s increasingly regulated environment (Sarbanes-Oxley, new SEC regulations, etc.). Tougher compliance regulations, stock option expensing, executive comp disclosure, etc. has placed a greater emphasis on financial reporting accuracy and transparency, and has put a premium on professionals/managers with deep compliance, planning and analysis skills.

Culpepper/AHRS Trends NW Survey Reveals Recruiting Challenges
In preparation for the October 2006 Culpepper/AHRS survey meeting in Seattle, Culpepper and Applied HR Strategies conducted a brief survey of meeting registrants, which were mostly technology and life sciences companies with offices in the area. 

The Seattle area labor market has been quite strong over the past year, and especially so for highly skilled and experienced technology and life science professionals. The survey revealed that many attendees were having many of the same general recruiting challenges. Here is a brief summary of the results. 

In General:

• Competition from the “big guns:” Microsoft, Amazon, Amgen, etc. They often pay better and have richer benefit packages, and as desirable to work for. In addition, they have large recruiting budgets and staff, unlike most of their smaller brethren.

• Difficulty getting people to move to Seattle. In many parts of the country (mostly outside of the West coast and pacific NW), Seattle has a few reputation problems: it’s rainy, dark and expensive (and they are all true!).

Recruiting Challenges in Life Sciences:

• All types of engineers, bioinformatics/biostatisticians, and some senior level scientists.

Recruiting Challenges in IT & Technology:

• All types of engineers, especially at the senior levels.

• Software and specialty engineers are the most difficult to hire today.

• Experienced product and program managers, high level database pros and others were mentioned as well.

Other Tight Job Families:

• Some HR roles, especially for recruiters and experienced compensation professionals/managers.

• Accounting/finance professionals, especially those with solid compliance experience.

The survey also revealed strong hiring plans for 2007 in the Puget Sound Region (Table 1).

- Doug Sayed, Applied HR Strategies

Applied HR Strategies (AHRS)
Applied HR Strategies is a Seattle-area human resources and compensation consulting firm devoted to serving business community in the Puget Sound region. Based in Kirkland, Washington, Applied HR Strategies consults in many areas of management and human resources, but the largest portion of its consulting practice is in the compensation arena. Applied HR Strategies works primarily helping growth-oriented organizations use their compensation dollars more wisely and competitively within the dynamic Puget Sound business community.

Culpepper has partnered with Applied HR Strategies to publish reports analyzing compensation trends and practices in the Pacific Northwest.