Job outlook 2005
Top Mass. employers forecast cautious hiring
Bank of America Corp., the nation's third-largest bank, recently had some of its top executives hauled before a congressional committee in Boston to defend its elimination of jobs following its April 1 purchase of Fleet.
The company responded by saying that it cut 2,900 jobs as a result of the acquisition of Fleet but created 1,100 new ones.
It is unclear how many people Bank of America (NYSE: BAC) employs in Massachusetts, as the bank would not make the figure public.
"We do not as a policy report out employment numbers at the state level," said spokeswoman Alexandra Liftman.
Such opaque jobs intelligence is emblematic of a 2005 Massachusetts employment picture that remains a question mark, although there are several bright spots, especially in health care, biotech, accounting and defense. Leisure and hospitality have rebounded, showing five straight months of growth. The hiring plans of the top 50 Massachusetts employers (see list, pages 16, 18) reveal, however, that many top employers plan to keep employment levels relatively steady and bank on productivity gains.
Bank of America would not discuss plans to create new jobs in 2005, but Liftman noted that the company recently announced 400 positions in wealth and investment management division were moving to Boston.
Boston money manager Fidelity Investments, the largest finance employer in Massachusetts, said it expects to add positions in 2005, though the company declined to say exactly how many. To date, Fidelity has added 2,000 new jobs companywide in 2004.
Liberty Group, the corporate parent of Liberty Mutual Insurance Co., expects to add 550 new hires nationally, largely through new college graduates and MBAs, said spokeswoman Jennifer Wooliscraft.
Citizens Bank of Massachusetts plans to add 175 jobs during 2005, according to chairman Robert Mahoney. The bank, a division of Providence-based Citizens Financial Group Inc., said the new hires were necessary to keep up with Citizens' 15 percent revenue growth this year.
PricewaterhouseCoopers LLP, the largest employer among accountants in the Boston area, said it expects hiring in 2005 to exceed this year's total. Michael Costello, managing partner, said PWC, which overall has 1,965 employees in Massachusetts, hopes to fill 225 entry-level accounting positions in 2005, compared with 200 this year.
Plans to add jobs are unusual in financial services, a sector that in Massachusetts shed 1,100 jobs in November and was down 1,300 jobs since November 2003, according to the state Division of Unemployment Assistance.
While the demand for accountants is up, bankers find their jobs in jeopardy due to industry consolidation. Meanwhile, according to economists, scandals at mutual fund firms have led to layoffs there, and rising interest rates have taken the hiring momentum away from mortgage companies, the lone bright spot in the sector over the past year.
The sluggish hiring plans for financial services companies reflects the Massachusetts recovery as a whole.
"It's been an uneven recovery," said David Pace, an economist with Global Insight in Woburn.
Massachusetts has added 24,000 jobs since February, according to the state Division of Unemployment Assistance. Yet, the state has lost jobs in four of the five previous months.
The fits and starts have resulted from some industries, such as education, health care and hospitality pulling out of the recession strongly, with others, such as finance, technology and manufacturing, lagging.
At the same time, the national recovery has been fitful. The White House this week dramatically reduced expectations for job growth next year, to 2.1 million jobs from 3.6 million.
While hiring has been sluggish so far this year, Bay State employers are expected to pick up the pace. Michael Goodman, an economist with the New England Economic Project, said his group projects the state will create 43,000 new jobs in 2004 and 2005.
Pace predicts job growth will be a 1.3 percent next year. That is "fairly moderate" compared with hiring following the last recession, which was as high as 2.2 percent in 1994. The difference this time, Pace said, is that the state economy doesn't have the benefit of pent-up consumer spending to propel hiring.
The federal government's "continuing march towards outsourcing," particularly of command and control, missile defense and biodefense technologies, is fueling expansion across a wide range of local defense companies, said Paul Serotkin, president of Burlington-based boutique defense investment bank and consulting firm Minuteman Ventures LLC.
"As the federal government needs to fill in technological gaps, the solution is going to come from the private sector," Serotkin said.
The state's largest defense contractor, Raytheon Co. (NYSE: RTN) is anticipating hiring in 2005, said spokesman Guy Shields. Shields said the company is still developing the strategy and the timing, but systems engineers, radar engineers and systems architects top the company's wish list. The Bay State operations of Waltham-headquartered Raytheon includes its missile defense and radar business unit Integrated Defense Systems, based in Tewksbury. Its Network Centric Systems unit, of McKinney, Texas, which makes communications and radar, also has a significant local employee base.
Other types of manufacturing companies are trying to hold head count steady. Earlier this year, several semiconductor companies increased their stables of temporary employees to meet spikes in demand. Other manufacturing sectors are similarly cautious, said Jack Healy, director of the Worcester-based Massachusetts Manufacturing Extension Partnership, which assists small manufacturers.
"Usually when you have an increase in temporary employment it equates to a rise in permanent employment. I don't think I've seen that" this time, Healy said.
Semiconductor maker Intel Corp., which counts about 2,300 employees in Hudson, expects manufacturing hiring to be stable next year, although the company may need to hire limited numbers of engineers with specialized skills, said spokesman Patrick Ward. Earlier in the decade, the Santa Clara, Calif.-based Intel (Nasdaq: INTC) employed about 3,000 workers in Massachusetts to start operations here, but Intel has since shed local workers "primarily through attrition," and moved some workers back to their home offices, Ward said.
Health care hiring
Some of Boston's premiere teaching hospitals are also some of the state's largest employers. Many say that expansions to accommodate more patients, plus continued growth in clinical research, is driving hiring well into 2005.
Massachusetts General Hospital employs more than 18,127 people, and administrators expect they'll add 725 new jobs on top of that through next year, representing a continued annual job growth rate of 4 percent.
Jeff Davis, the hospital's senior vice president for human resources, says about half of those jobs will involve clinical care positions like nurses and other health care workers. The other half, he said will likely be hired for research positions, depending on grant awards during the year.
"It also has to do with the aging of the population," he said. "As more people get into the aging population that use or need hospital care, we'll see some growth there."
Expansion is also driving anticipated hiring growth at Children's Hospital Boston. The hospital employs nearly 7,200 people. Plans call for hiring 250 more people through much of 2005 and into 2006, said Susan Hancox, Children's vice president for administration and human resources.
Hancox said the hospital simply needs more employees, thanks to its new clinical building slated to open next summer, expanded suburban operations and last summer's new research building.
"It's really the full gamut of everything we're doing," Hancox said. "We just seem to have a lot of opportunity right now."
Beth Israel Deaconess Medical Center employs close to 6,700 employees. Spokesman Jerry Berger said the hospital has budgeted for a 7 percent jump in new positions for its 2005 fiscal year that began last October.
The expected addition of about 350 employees is being driven by one thing, Berger said -- expectations of more patients.
"We're growing our clinical volume," he said. "We have to staff up to meet" the expected increase in demand, he said, which will also include the addition of more beds.
Meanwhile, Cambridge-based Genzyme Corp., one of the region's more successful life sciences companies, expects to add significant jobs in 2005.
Genzyme employs about 4,990 people in Massachusetts and nearly 7,000 employees worldwide.
Genzyme has about 300 regional job openings, including new and vacant positions in Cambridge, Boston and Framingham. In addition, the company expects to fill between 300 and 500 of new and vacant positions on top of that in 2005, most of which are in each of the three Massachusetts communities, said Ellen Reifsneider, vice president of staffing and professional development.
Reifsneider added that the number could grow even larger if Genzyme continues to acquire other companies as it did over the last year.
Hopkinton giant EMC Corp. is looking to hire approximately 475 people, nearly half of them in Massachusetts and New Hampshire, according to information on its Web site. At the end of the third quarter, EMC had 22,000 employees according to spokesman Greg Eden, 1,000 more than it had six months earlier.
Boston-based the Gillette Co. (NYSE: G) employs 29,000 people worldwide and 3,700 in Massachusetts. According to Michael Norton, director of communications, that number will remain steady through 2005.
"Right now we're running a very efficient operation," Norton said, citing retirement and attrition has helped keep the number constant for the past few years.
BBJ reporters Mark Hollmer, Naomi R. Kooker, Sheri Qualters and Alexander Soule contributed to this report.