Ups and downs of the 2010 job market - SNEWS

Ups and downs of the 2010 job market

While some companies in the industry -- both manufacturer and retail -- will expand their workforce this year, plenty are in a holding pattern due to the fragile economy. We take a look at the current trends.
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Anyone keeping up with trends in the U.S. job market must feel as if they’re on a turbulent roller-coaster ride. While the unemployment rate fell from 10 percent to 9.7 percent in January, U.S. jobless claims unexpectedly jumped by 31,000 to 473,000 the second week of February.

For the outdoor and fitness specialty markets, the job outlook for the next several months appears to be equally unclear. While some manufacturers and retailers plan to increase their workforce, others remain in a holding pattern or have chosen to realign their staff rather than add new hires.

Expanding the workforce

While the fate of the economy is unknown, there are signs that hiring will pick up.

“I came out of the last Outdoor Retailer and SIA shows with more scheduled meetings than I would have had in years,” said Frank Whiting, owner of The Whiting Group (www.thewhitinggroup.com) corporate recruiting firm, which places people in upper-level positions for companies in the outdoor, ski and action sports markets. “The pendulum had swung so far in the direction of companies not hiring, and it’s now swinging back to where people are starting to fill positions they had needed to fill, and even being a bit strategic, with new hires for specific initiatives.”

Companies that are hiring told SNEWS® they are being very deliberate and careful in bringing in new employees.

“2010 has us actually adding a handful of strategic hires that complement both our product and distribution needs,” said Chris Clawson, president and CEO of Johnson Health Tech NA, parent company of the fitness equipment brands Horizon, Vision and Matrix. “The key new hires include a web developer, sales and operations analyst, and further segmentation in our customer technical service.”

One of the outdoor industry’s biggest players, Columbia Sportswear, has seen its hiring remain essentially flat since 2007, but the company is bringing people on board to support certain initiatives. “The one area we have expanded dramatically has been in our retail operations,” said Ron Parham, Columbia’s senior director of investor relations and corporate communication. “Across the country we have been hiring store associates and management to support that new operational area of the company.” He added that the company is also hiring “very strong product and design talent,” as well as adding people to support the constant effort to make its supply chain more efficient.

Still, he said the success of the company’s new Omni-Heat technology for clothing and footwear would partly determine the level of hiring for the latter part of this year.

One indicator that hiring might be on the rise is the increased activity on the website outdoorindustryjobs.com and fitnessindustryjobs.net, where some 1,200 employers list a wide range of jobs, from seasonal work to upper-level positions. The sites also serve as the job sites for SNEWS (www.snewsnet.com/jobs).

Laurel King, who owns the jobs sites, said listings dropped off 25 percent to 30 percent when the recession took hold, but by April 2009 they were off only 16 percent.

“Now, it’s pretty much back to where it was a year and a half ago,” she said.

King said, on average, there are about 25 industry jobs posted at any time, but as of this week, there were nearly double that -- 47. “That’s as many as I’ve had at any one time,” she said.

Mixed messages at retail

Some retailer owners in both outdoor and fitness we have spoken with said they had cut their staffs significantly over the last couple of years. But in outdoor, at least as a (hopefully) busy spring and summer approaches, some said they are now planning to add workers; while most in fitness are just holding on during the slower summer season.

“We'll probably increase by 10 percent to 15 percent this summer over last summer,” said Keith Roush of Pine Needle Mountaineering in Durango, Colo. “Inventory levels are down nearly 20 percent from recent years, and sales are up about 10 percent. Since we've cut staffing to the bone, there will be some room for new hires.”

Lillie Gilbert, owner of Wild River Outfiiters in Virginia Beach, Va., said she is also preparing to bring more people onboard.“We plan on hiring one or two part-timers as we enter our boating season,” she said. “Since January 2009, we have shortened three work days by one hour each and have cut back on staff. It's been hard to give anyone a 40-hour week. I hope this new spring and summer season will be busy for kayaks and any outdoor gear. If it is, we may add a full-timer.”

Gilbert told SNEWS she is “cautiously optimistic” that general market conditions will improve. “We certainly have noticed a turn in our customers' demeanors. They seem to be more positive,” she said.

However, we heard less optimism from several retailers, including Tom Valone, founder of Great Outdoor Provision Co., based in North Carolina. Valone noted that “the economy is incredibly fragile,” and said he does not foresee much job growth.

“Our work force will remain static. We cut back almost 20 percent on hours worked last year and feel that that is about where it will need to be the first six months of this year,” he said.

“We are in a very fragile economy, locally and nationally,” said Phil Leeds, co-owner of Skinny Skis in Jackson Hole, Wyo. “After making adjustments in spring '09, we plan on maintaining our current work force levels. If all goes well, we'll likely increase staffing slightly in fall '10.”



Running lean rather than adding jobs


In its 2009 Retail Horizons survey, the National Retail Federation (www.nrf.com) reported that retail “talent managers are bracing for what may be a prolonged period of belt-tightening.” Rather than hiring new folks, retailers are “cutting selectively, reshaping roles and redirecting limited human resource dollars to retaining and developing leaders of the future.”

Whether or not companies increase their hiring this year, it is not necessarily an indicator of how markets are faring, said Dawson Wheeler, president of Rock/Creek in Chattanooga, Tenn. “To equate growth with job creation currently is a false statement in many situations,” he said.

This is partly due to the fact that many companies are trying to be more efficient and profitable by realigning their current work force, rather than just adding new employees.

“While Rock/Creek is growing rather steadily, we are also restructuring and adding responsibility to current staff and also raising wages to follow responsibilities,” said Wheeler. “It currently makes more sense if an employee wants to earn more to give them an expanded role. They know our systems and can adapt to new roles quicker than new staff from the outside. Also, due to some slowing in the market, smart retailers are reassessing all job roles and cutting the fat out of their organizations.”

Staying lean is also the strategy for Mike Leffler, owner of Appalachian Outfitters in Peninsula, Ohio. “Presently, we are running with no support staff, i.e. managers, buyers, back office, receiving, etc.,” said Leffler. “This results in a seven-day work week, but also allows us to run payroll at approximately 25 percent less than the industry average per OIA's 2009 report. Doing so has allowed us to build cash reserves during the downturn.”

Belt-tightening on the supply side

Many manufacturers are also adjusting their current staff responsibilities to keep their belts tight.

“I’m thinking about hiring more from within rather than bringing in someone from outside,” said Roger Bates, president of LifeCore Fitness in Vista, Calif. “In this economy, the key is really streamlining your staff.” Bates said sales could grow 30 percent this year (largely due, he said, to expansion of its new C-Drive elliptical machines), but he doesn’t want to simply “throw dollars or hours or manpower” at this burgeoning business. “It’s more cost effective to give current staff more money and more of an opportunity,” he said, echoing what retailer Wheeler at Rock/Creek said.

Star Trac is another fitness supplier that wants to make the most with its current staff, rather than adding new hires. “At this point, we do not plan on adding employees in a large way,” said Kevin Lamar, vice president and general manager of Star Trac’s consumer products division. “As the market improves and opportunities arise, we will add where needed, but at this point we’re keeping who we have and trying to become more efficient all-around.”

Like many business leaders, Lamar is carefully balancing his staffing needs to keep the company on a steady course.

For all industry segments and whether retailer or supplier, it’s not an easy task in a roller-coaster economy where it’s hard to see the next drop as you’re creeping along the track.

--Marcus Woolf

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