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Bay Area Hiring – Victims of Our Own Success?

The Bay Area jobless rate hit 2.7% in April. That’s pretty good, considering the record is 2.6%. Job growth is diverse with strong gains in technology (no surprise there) as well as health care, construction, restaurants, entertainment and hospitality. A recent headline from The Mercury News even read “Bay Area, California running out of people to hire.” That is indeed suggestive! However, not having enough people to hire may well hamper our economy. Will we become victims of our own success?

There is hiring pressure occurring across all industries in the Bay Area. Execuforce, being focused on hiring for accounting and finance positions, has definitely seen increased pressure and need to hire both staff level accounting and senior finance leaders. In past posts, we have mentioned that the Bay Area has been fortunate enough to be the recipient of the lion’s share of VC funding in the U.S. This insulated us from the downturn in the past and is a main accelerant for our continued growth. However, VC firms are looking for a way to cash out, and most often this comes in the form of an IPO.  As highlighted in a recent article in the WSJ and what Execuforce has seen firsthand, there are very few CFOs that have the experience to both build an organization and successfully bring a company public. During their search, many companies go without a finance head for a long period of time, which can slow their momentum and stunt their growth. Also, having a good CFO in place gives a company credibility, which is attractive to investors. As Ash Ashutosh, CEO of Actifio Inc. put it, “You need a CFO ready to go learn new things when the market changes. That’s hard to find, because accounting and finance people by the very nature of the job are about predictability and removing uncertainty.”

Most economist foresee a slowdown in the economy occurring in the next few years. What goes up must always come down. It is still hard to say how big an impact a shrinking labor pool will have on the slow down. However, it is clear that many companies are having a hard time finding the right people to grow their businesses. On the flipside, although VC funding may not be at the record pace of 2018, funding for the first quarter of 2019 looks to be really strong. There are a lot of startups out there that are building organizations that are worth investing in. In the end, 2019 looks like it will be a solid year of growth in the Bay Area.

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