New DBM Research Shows Most Americans Lost Jobs in 2004 Due to Significant, Event-Driven Organizational Transitions; Also, New Job Growth Found in Four Key Sectors

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Significant organizational transitions, implemented by employers in order to gain marketplace advantage, align workforce needs with strategic initiatives, and address changing customer needs, remained the primary reason for job loss among American workers for the fourth consecutive year according to new research by DBM, a global human capital management and transitions firm. DBM's annual United States Career Transition Study shows that almost 30 percent more Americans lost their jobs in 2004 compared to 2001 because of downsizing resulting from transitions such as mergers, acquisitions, reorganization, and restructuring.

Significant organizational transitions, implemented by employers in order to gain marketplace advantage, align workforce needs with strategic initiatives, and address changing customer needs, remained the primary reason for job loss among American workers for the fourth consecutive year according to new research by DBM, a global human capital management and transitions firm. DBM's annual United States Career Transition Study shows that almost 30 percent more Americans lost their jobs in 2004 compared to 2001 because of downsizing resulting from transitions such as mergers, acquisitions, reorganization, and restructuring.

"American companies are still undergoing substantial strategic transitions in order to more effectively compete in an ever-changing marketplace and we do not expect this trend will change in the near future," said Charles F. Kalmbach, DBM’s president and chief executive officer. "Because companies continue to reinvent themselves, whether by developing new business models or new lines of business, DBM expects that 2004’s job loss trends will continue as workforce strategies are realigned to match new competitive realities."

While the overall job loss statistics are disheartening, DBM found some good news for high tech workers: technology companies across America are creating new jobs faster than most other sectors of the economy.

DBM surveyed more than 27,000 managers and professionals in career transition for this year’s United States Career Transition Study. Highlights of the study include:

  • Significant events-driven organizational transitions, such as mergers, acquisitions, reorganization and restructuring, continued to be main cause of job loss in 2004.
  • In addition to increased opportunities in the Technology sector, job growth was also seen in the Financial Services, Healthcare and Not-for-profit arenas.
  • Networking continues to play a significant role in finding a new job, proving to be six times more effective than applying for jobs on the Internet alone.
  • More individuals found new jobs at higher salaries last year, up seven percent from 2003.
  • Managers and professionals who lost their jobs received three weeks less severance pay in 2004 compared to the previous year.

Job losses continued in 2004.

Most of those surveyed, 93 percent, reported the primary reason for job loss last year was from the collective impact of downsizing, mergers, acquisitions, reorganization, and restructuring. It should be noted that downsizing is a natural occurrence for organizations that merge or restructure in order to adjust to new competitive realities.

In 2001, 64 percent listed downsizing, mergers, acquisitions, and restructuring as the primary cause of job loss. This number rose to 75 percent in 2002 and 79 percent in 2003, remaining the primary reason workers separated from their employers. DBM expects this four-year trend to continue.

Only seven percent of those surveyed reported other reasons, such as facility closures and personal job performance, for job loss in 2004.

Job growth found in four key sectors.

Workers seeking Technology sector careers in 2004 found more opportunities as placements in technology jobs almost doubled from the previous year. Key areas of growth last year included telecommunications and electronics/electrical equipment roles. This is good news for a sector that lost more than 200,000 total jobs between 2001 and 2003 and a positive sign for American competitiveness.

"There is a significant paradigm shift in the global technology and telecommunications industries," notes Bret Bero, president of DBM North America. "Countries such as China and India are producing key new competitors for American technology companies, and outsourcing is accelerating as a method for domestic manufacturers to cope with these overseas competitors."

DBM’s study also found that job opportunities in the Financial Services, Healthcare and Not-for-profit sectors increased in 2004. Consulting and Operations job functions produced the highest new job growth rate last year.

Industry sectors showing losses included Agriculture and Forest Products, Metals, Mining, Industrial and Farm Equipment, Paper and related products, Transportation, Chemicals, Scientific and Photo Equipment. Losses were also seen in Service industries such as Retail companies and Professional Services firms.

Networking continues to be key for securing new jobs. While more individuals found employment using the Internet in 2004 compared to the prior year, surfing the Web only accounted for ten percent of total job placements. The best way to find a new job continues to be networking with business contacts, industry associates, family and friends. Of those surveyed, 64 percent attribute finding a new job to successful networking, up from 60 percent in 2003.

Networking with colleagues within a company or industry continues to be essential to ensure a great job fit for both the employer and the employee according to DBM’s research. "Today's employers want individuals who can help the organization accelerate its capabilities," says Bero. "DBM believes that networking is both an art and a science. We advise job seekers to research potential employers thoroughly, and know in advance how their abilities sync with the company's workforce strategies."

Salary growth is found by half of reemployed workers.

More individuals said they were offered a higher salary than their previous job, an increase to 48 percent from 41 percent in 2003.

Severance payments declined.

Unemployed managers and professionals received smaller separation packages last year, according to survey results. Severance pay offered to departing employees dropped from an average of 20 weeks in 2003 to only 17 weeks in 2004. This continues a three-year trend of declining severance pay.

Background on DBM's Career Transition Research

DBM has conducted research on career transitions for the past ten years. In February of 2005, DBM released a similar study of Canadian workers. Later this year, DBM will release the results of its Global Career Transition Study.

About DBM

DBM (http://www.dbm.com) is a leading global human capital management firm providing transition services to private and public companies, not-for-profits and governments. With almost 40 years of experience creating innovative career transition solutions, DBM annually guides more than 7000 organizations and 250,000 individuals through key transitions caused by significant change events or by the dynamic ongoing employee changes which impact business daily. DBM counsels organizations on aligning workforces with business strategy after mergers, acquisitions and restructurings; transitioning employees for increased speed to competency or improved productivity; and outplacement planning and implementation. DBM consultants also provide career transition and business coaching services to individual clients seeking to get the most out of their personal career transitions. DBM has 230 locations serving 85 countries and has

partnered with 70 percent of the Fortune 500 and 80 percent of the Global 500 companies.

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

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Sally Barnes
DBM
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