Jobs in need of workers Workplace: Although downsizing is still alive, many companies are scrambling for employees. In fact, unemployment is at a six-year low, which means higher wages and concern about inflation.

February 09, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

The country's most sought-after rarities this year aren't Florida oranges, America Online connections or decent left-handed pitching. They're elbow grease, brow sweat and brain power.

For the first time in almost a decade, Malynda H. Madzel is having trouble hiring the people she needs for her Columbia telemarketing company.

"When everybody was downsizing, we had people who filtered through while they were looking for other work," said Madzel, the 26-person company's president. "Now that there isn't so much downsizing, a lot of these folks are well taken care of. It's not as easy to find the good people that we want."

The lowest unemployment rates in six years are forcing many companies to search harder for workers, pay more and sometimes settle for less.

Although inflation has been subdued for years, some economists think that the labor drought is getting worse and could prompt a sharp cost-of-living spike this year as higher wages are factored into prices.

"Eleven percent of the firms we survey can't find the workers they need," said University of Baltimore economist Richard Clinch, who regularly polls hundreds of Maryland companies about business conditions. "Labor issues rank higher than tax issues" among employers' concerns, he said.

The dearth is especially severe among engineers, machinists, lab technicians and other high-tech workers.

"I'm looking for three more people right now, and I can't get them," said Patrick Huddie, chief executive of Microcosm Inc., a Columbia supplier of optical-imaging systems to the semiconductor and medical instruments industries. "We're trying to grow our company by 50 percent, and it's just not possible." But the shortages are felt in many fields, from retailing to advertising, education to transportation.

Baltimore ad agency Trahan, Burden & Charles just landed some big accounts and wants to hire between 15 and 20 people in the next three months.

"But it's hard to hire all the people we need," said Robert Matz, TBC's president. "The climate for the kind of people we're looking for is not as plentiful as it was two or three years ago. I think the other guys in our business would say the same thing."

The labor pinch is nationwide. Although U.S. companies continue to announce huge layoffs, as shown by American Express' move several days ago to shed 3,300 employees, analysts say the trend of corporate downsizing has slowed.

And the labor drought in Maryland and some Northeastern states is especially noteworthy.

Maryland recovered extremely slowly from the recession of the early 1990s. Now, the presence of its best job market of the decade suggests that the state is participating more fully in the country's commercial vitality.

But it also may contain the seeds of its own end. For two years now, economists have worried that a growing shortage of workers would start to hinder U.S. growth, drive up wages, stoke inflation, boost interest rates and kill the national expansion.

It hasn't happened yet, as noted by the recent U.S. Labor Department report that employer costs rose only slightly in the fourth quarter. But the fact that even the nation's more sluggish pockets are now begging for labor may mean that the expansion is finally, indeed, pushing its bounds.

"There's probably an upward bias of wage and price growth," said John Zaehringer, chief economist for Loomis, Sayles & Co., a Boston investment house. "By most measures we're a little above full employment. The historical perspective suggests that the piper has to be paid."

Unemployment plunged in Maryland last year, from 5.1 percent at the end of 1995 to 4.4 percent last December. The last time Maryland unemployment was 4.4 percent was in May 1990. Nationally, unemployment fell to 5.4 percent in January from 5.8 percent a year earlier.

For available labor and brains, it's a sellers' market. The Sun's help-wanted section booked its highest volume in at least five years last year.

And people willing to switch companies, especially in the affluent counties near Baltimore and Washington, are increasingly able to parlay the move into a pay raise.

Not long ago, store managers in a typical Maryland mall could be had for $25,000 a year, said Mark Millman, president of Millman Search Group, a Baltimore County firm that places retail executives nationwide. "They're up now approaching the $30,000 range," Millman said.

"Salaries have definitely gone up, all over the country. And definitely in this area."

At Kenlee Precision Corp. in Baltimore, good machinists can make $40,000 to $50,000 a year and pay "is edging up. It's going up, there's no question about it," said owner Kenneth A. Lewis Sr.

At Custom Telemarketing Services in Columbia, Madzel had to boost starting pay for her telephone reps from $6 an hour to $7.50 after she discovered that local McDonald's restaurants were starting people at $7.

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