Will slowdown in U.S. labor productivity spur hiring binge?

Latest Labor Department stats show productivity falling, costs per worker rising

Some new numbers from the U.S. Labor Department indicate that the ground is being set for companies to start hiring more workers.

And with increased IT needs often accompanying a workforce expansion, this presumably would bode well for tech professionals.

In its quarterly release of economic statistics, the Labor Department on Wednesday reported that non-farm business sector labor productivity per hour increased only 0.9% annually in the fourth quarter, just half the 1.8% productivity-per-hour gain recorded in Q3.

At the same time, fourth-quarter expenses per worker increased 2.8%, more than twice the previous estimate of 1.2%.

Lower productivity and higher per-worker costs can put companies in a position where "the only way to increase output is to hire more people," Brian Jones, a senior U.S. economist at Societe Generale in New York, told Bloomberg News. "It’s a positive for the labor market."

Jones added that larger payrolls could crimp operating margins as overall labor and related costs increase. That's certainly the case with Amazon.com, which felt the wrath of Wall Street in late January when it reported a lower-than-expected operating margin for its fiscal fourth quarter and low-balled its margin for the current quarter.

But Amazon.com has this weird habit of investing in its future, whether it's building more fulfillment centers or hiring more workers. This runs counter to Wall Street's penchant for living quarter to quarter and the childish need of many shareholders for instant gratification.

If the economy continues to recover, companies that want to increase productivity and output to remain competitive may have no choice but to hire more workers, while another downturn likely would put those plans on hold.

For IT workers, one specialty that could lead to job offers is Linux. According to a February survey of more than 2,000 hiring managers by tech employement site Dice, "81% of respondents say that hiring Linux talent is a priority in 2012," with 47% of hiring managers "expecting to add more Linux professionals to their firms in early 2012."

And IDC estimates that by the year 2015, nearly 14 million jobs will be created through the adoption of cloud computing by enterprises. However, my ITworld colleague, Kevin Fogarty, is highly skeptical of this forecast. Well, if you consider asking how "something that automates a lot of the work of maintaining computers (can) create that many more jobs working with computers" to be skeptical.

For the moment, however, it appears U.S. businesses are stretching the limits of current worker productivity. Hopefully that means an investment in human capital.

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