Two-thirds of U.S. employers and recruiters plan to scale back hiring plans over the next six months, according to a new survey. One-third of companies believe that layoffs are likely.


Those are some of the results of a survey from Dice Holdings, Inc. (NYSE: DHX) of hiring companies and recruiters. The more-than 1,000 respondents, drawn from a wide variety of industries, paint a picture of a job market for professionals that has deteriorated since the summer, when the economy was already in turmoil.

Companies expecting layoffs represented diverse industries including gaming and hotels, pharmaceuticals, technology, manufacturing and advertising.

Dice Holdings surveyed an equivalent group in June, and their responses were not as severe, with 20% expecting layoffs and 52% planning to scale back hiring. The shift in outlook underscores how quickly companies are adjusting their plans to the current economy.

"Companies were uncertain about the economy back in June, and were adjusting hiring plans," said Scot Melland, Chairman, President & CEO, Dice Holdings, Inc. "Now we're seeing more companies express the need to cut back on hiring or discuss layoffs, preparing for what they see as a difficult year in 2009."

In fact, 29 percent of respondents indicated hiring reductions would be substantial -- double the number expecting that level of cutbacks when surveyed in June. Some 27 percent reported no change to their hiring plans and six percent were unsure.

When will hiring return to normal? A plurality of respondents (44%) say they are not sure and are waiting to see how the economy evolves. Of those willing to take a calendar guess, the largest percentage, 33 percent, are expecting hiring to normalize in the second half of 2009.

"Companies need clarity on their own businesses and are reassessing their staffing needs on a case by case basis," said Melland. "At the same time, there are companies that are indeed hiring, and they may be able to acquire talented professionals at advantageous salary levels."

Companies with open positions are benefiting from an increase in candidates applying for positions, as seven in ten are reporting an increase in the number of candidates applying for jobs. In addition, there appears to be a flight to safety as larger companies, those with more than 500 employees, are finding an even larger candidate pool to choose from.

With more qualified professionals looking for an opportunity, companies are holding the line on salaries with the majority of respondents - 62 percent - indicating no increases in starting salaries from the previous year. Fifteen percent expect to be able to offer less compensation - up from just 3 percent in June. Nearly a quarter (22%) of the respondents expect salaries to be slightly higher.