Half of Direct Marketers Have Hiring Freezes, 28% Brace for Layoffs

February 4, 2009

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Agency Business

Nearly half (48%) of direct marketers in the US say they currently have a hiring freeze in place, and 28% plan to reduce headcount in the next three months, according to the first 2009 Employment Outlook Report, based on findings from a recent study conducted jointly by the Direct Marketing Association (DMA) and Bernhart Associates Executive Search, LLC.

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The survey of more than 250 direct marketers reveals that, as the economy continues to struggle in Q109, direct marketers are preparing for the possibility of even more layoffs, hiring freezes and hiring cutbacks.

Among survey respondents, only 21% said they will be adding to staff during Q109, down from 31% last quarter and down from 58% in Q108.

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The percentage of companies planning to reduce staff rose from 17% last quarter to 21% in Q109. This is also an increase from only 12% in Q108.? Additionally, the 48% who report they currently have a hiring freeze is an increase from 34% last quarter and an increase from 13% in Q108.

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“Each of our key employment indicators is at an all-time low,” said Jerry Bernhart, principal of Bernhart Associates. “The worsening economic climate is taking its toll on direct marketers just like everyone else.”

When asked when they think these grim employment conditions will ease, the majority of respondents said they did not know, but most anticipate they will last until at least the springtime.

Direct Marketing Faring Slightly Better than US Economy

Bernhart said that despite all of the economic pain, direct marketing – which in 2008 accounted for approximately 10% of total US GDP and employs more than 10 million people in the US – appears to be doing slightly better than the US economy as a whole.

“According to the latest Employment Outlook Survey by Manpower, Inc. in December, 16% of US employers said they anticipated an increase in their staff levels during the first quarter of 2009, compared with 21% among direct marketers who responded to our study,” said Bernhart.

“A closer look at our numbers also shows that while quarter-to-quarter changes in planned staffing and hiring freezes are both sharply deteriorating, layoffs are going up at a much more moderate pace, he added. “All of this suggests that direct marketers are being spared the massive job cuts that we’re seeing in some other sectors of the economy.”

Bernhart also observed that among companies planning to hire this quarter, new jobs will outnumber replacements five-to-one.

“Recent published surveys show that many businesses are actually planning to increase their direct marketing budgets in 2009 while reducing their spending on less targeted advertising campaigns, and I think that is helping to ease the blow,” said Bernhart.

About the survey: A total of 264 companies participated in the detailed employment study, which was emailed in mid-January to a combined list of DMA members and past participants of the Bernhart employment survey. Complete survey results and expert commentary can be found in the 2009 Employment Outlook Report, which includes information on hiring patterns within the direct marketing arena, new employee compensation, bonuses, and incentives used to attract new hires.

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