San Diego’s technology, life sciences and health care sectors remain the region’s largest sources of employment growth and are expected to continue hiring at a steady clip throughout the next year, economists say.
The impending mass layoffs at Qualcomm, however, may dampen some companies’ drives to add positions. There were almost 55,000 ads for jobs in the San Diego metropolitan area in August, up from about 35,000 postings in February 2014 and the most recorded since at least 2009, according to the California Employment Development Department (EDD).
The top prospective employer was the University of California, San Diego, with 1,008 ads. Staffing companies including Robert Half, Kforce Professional Staffing and Aerotek had a combined 1,500 postings. Accenture, Oracle, General Atomics, Northrop Grumman, Sharp HealthCare and Kaiser Permanente each had between 285 and 450 job ads, according to the EDD.
The top occupations in demand are software application developers, registered nurses and retail salespersons.“San Diego employers have increased hiring substantially, with jobs gains occurring in most major industries,” said Lynn Reaser, chief economist at Point Loma Nazarene University. “Hiring is particularly strong in hospitals, the shipyards, tourism, education and construction.”
The job postings echo what San Diego County has seen over the past year, with an overall gain of 42,000 jobs since August 2014. The unemployment rate fell to 5.1 percent as the professional, scientific and technical services (PST) field added 9,200 jobs. The field includes lawyers and accountants, along with biotechnology, software, information technology and research firms. It was the greatest year-over-year growth of any field.
Health care was not far behind, recording a net gain of almost 7,200 jobs since last year. Michael Combs, research manager for the San Diego Regional Economic Development Corp., cautioned that using only past employment statistics to predict what will happen over the next year is inherently flawed, but that other metrics are not pointing to widespread downturns in San Diego’s core industries. PST companies in particular work with a global customer base, and the high-tech sector is still in the midst of a “boom of sorts,” he said, as employers still struggle to find enough qualified people to fill their open positions.
“We can safely assume we’ll sustain some level of this growth for the foreseeable future,” Combs said.
That projected hiring growth, however, may be tempered by Qualcomm’s announcement that it will lay off more than 1,300 full-time staff in San Diego as part of a companywide restructuring driven by falling profits on its chip products. Cubic Corp., iBoss Inc.,
Illumina and others have said they will try to hire some of the displaced workers, especially engineers, but the layoffs may end up affecting industries beyond technology.
“It’s is a significant blow, made worse particularly by Qualcomm jobs being economic drivers that pay well and have a multiplier impact on other jobs in the region,” said Kelly Cunningham, an economist at the National University System Institute for Policy Research. “For every Qualcomm job lost, another one to two jobs will be lost in the region as well.”
Cunningham explained that Qualcomm has a so-called employment multiplier of 2.3, which means that on average, every job created by the company will add 2.3 other jobs in San Diego County. Qualcomm’s higher wage jobs mean worker spending can buoy other businesses, such as clothing stores, and the technology giant’s worldwide business brings money into San Diego from around the world. That helps create work for power companies and others Qualcomm works with.
“It works both ways,” Cunningham said. “Though it will take a while for that ripple effect, up to a year or more. We’ll see it in real estate, housing, groceries and department stores.”
The Qualcomm layoffs’ depression on local hiring assumes that the workers aren’t able to find new jobs in San Diego. While some will certainly land comfortably here, many may leave the area.
Cubic, for example, said last month that it needed a host of engineers and was interested in ex-Qualcomm employees, but that its jobs were not necessarily in San Diego. The better salaries and perks in Northern California are also likely to attract some away from San Diego. Phil Blair, CEO of Manpower San Diego, said he has a list of companies that want access to Qualcomm employees, including many from outside the county.
The potential layoff of about 1,200 Haggen Food & Pharmacy workers is unlikely to have as significant an effect. Haggen, which filed for bankruptcy protection, is closing its 25 local stores by the end of the year. The lower paying jobs there only have a multiplier of 0.33, according to Cunningham.
There is also a better chance any laid off Haggen workers will stay in San Diego. Though Haggen’s financial problems could indicate the area is saturated with grocery stores, other grocers are bidding on more than half of the Haggen stores. And Albertsons, which sold the stores to Haggen, received permission from federal regulators last month to solicit its former employees.
Combs, the EDC research manager, said the retail sector is expected to add 3,000 jobs next year while leisure and hospitality is projected to add 6,000 jobs. That, combined with any moves by other grocers, is likely to absorb most of the Haggen workers locally.
“If the economy was contracting, it would be a much bigger concern for grocery store employees,” he said. “The layoff number sounds like we’re losing those jobs, but that’s not necessarily the case.”