Employers cautious but skilled workers needed

By Nick Zieminski - Analysis

NEW YORK (Reuters) - Large employers are more cautious about hiring amid signs of a slowing economy; but few are planning sweeping cuts in their work forces, and workers with specialized skills remain in demand.

A much weaker-than-expected February jobs report clearly raised the risk of recession, but the negative headline number masked strength in some sectors of the economy, like health care and education, staffing company executives said on Friday.

The U.S. economy lost 63,000 jobs outside the farm sector last month, the second monthly loss in a row, defying expectations for jobs being added. The unemployment rate, based on a separate survey, eased to 4.8 percent, partly reflecting fewer people in the labor force, the Labor Department said.

The government report also showed a decline in temporary employment as a percentage of the overall labor force -- a worrying sign, said BMO Capital Markets analyst Jeffrey Silber.

"As a decline in this metric is typically a precursor for an oncoming recession, this is somewhat concerning," Silber said in a research note.

Large employers, especially, are more cautious about hiring, taking longer to vet candidates and having to go higher in the organization to get approval for a hire, said Roy Krause, chief executive of staffing company Spherion Corp.

"The interview process is getting extended, which is typical in a slowdown in the economy," Krause said. He said a slowdown in the service sector was the most worrisome aspect of Friday's report.

Staffing companies are paying more attention to costs than a few months ago, Krause added.

"We're going to be careful with our expansion plans, as far as opening new offices; but we are actively continuing to hire recruiters, because in the professional services area the number of jobs we have (is) still significant."

Information technology and finance and accounting remain bright spots, Krause said, and the education and health care fields are looking for workers.

Tig Gilliam, chief executive of Adecco Group North America, agreed.

"Clients in the U.S. are saying that despite bearish economic indicators, they are still hiring critical positions for highly skilled professionals in engineering and scientific, as well as IT (information technology) workers," Gilliam said.

Robert Morgan, co-president of recruitment and talent management at Hudson Highland Group, added legal and sales and marketing to the list of sectors where professionals remain in demand.

"We're seeing stronger demand for talent than we've seen over the last six months," he said.

NO DEEP JOB CUTS