Washington area is beginning to bounce back from recession, economists say
Monday, February 14, 2011; 12:28 AM
No, there aren't huge signing bonuses, or personal concierge services, or the jaw-dropping luxury perks that companies threw at top talent back in the boom days of the '90s. But with the pall of the Great Recession finally lifting, some Washington area companies are handing out iPads at interviews and rewarding employees with $5,000 referral bonuses and trips to France.
As other parts of the United States continue to stagger under nearly double-digit unemployment, large swaths of the Washington region's economy are beginning to bounce back, even if fitfully, economists say.
After 17 straight months of job losses, the District and its suburbs had nine consecutive months of employment growth through the end of last year, totaling more than 23,000 new positions, according to the Center for Regional Analysis at George Mason University. The last four months of 2010 were particularly strong, although economic forecasters said it could be years before the recovery is fully realized. Some sectors, including construction and manufacturing, continue to face significant slides.
With a relatively low unemployment rate of less than 6 percent, the Washington region has long been buoyed by the economic engine that is the federal government. Although the government is helping the recovery, the area's increasingly diversified economy is paying off: Businesses from a variety of sectors - including tech start-ups, hotels and retailers - have begun to open their wallets and hire, a positive sign, given sharp cuts expected in defense spending, officials said.
"The Washington area economy is leading the way, or at least recovered the fastest and is generating jobs at a much greater rate than any other metro area," said Stephen Fuller, director of the George Mason center. "The private sector is beginning to pull away from its dependence" on the federal government.
He predicted that the recovery would "accelerate this year and then continue growing well for several more years." But, he said, the peak would not come before 2015.
The job growth has helped stem a second wave of home foreclosures in Northern Virginia, said Anirban Basu, chief executive of the Sage Policy Group, a Baltimore-based economic and policy consulting firm.
"With job growth expected to remain in place for the rest of the year, the expectation is that other segments, like the housing market, will continue to improve," he said.
Fueling the local growth are companies such as Hilton, which moved its headquarters from Beverly Hills, Calif., to McLean in 2009.
On Friday, the hotel giant announced that it would invest $1.8 million to expand in Fairfax County, adding 100 jobs to the 572 local employees the company hired last year.
Bethesda-based Marriott plans to open two hotels in the region - one in Crystal City this year, and the other at the Walter E. Washington Convention Center in the District in 2014 - bringing 1,400 new jobs, a spokeswoman said.
CACI, an Arlington County-based defense contractor, hired 3,500 people in its last fiscal year and plans 4,000 hires this year. It has been adding so many people that it recently had to bring on five more recruiters to help sort through the candidates.
"We're right in the sweet spot," said Larry Clifton, the company's senior vice president in charge of recruiting.
With such a high demand for top employees, he has started to go after promising undergraduates in their junior year, "taking them off the market before competitors get to them."
Instead of offering just a summer internship program, the company has year-round internships for Washington area college students so they can work part time and make money for school.
ManTech, another defense contractor, grew by 25 percent last year, to 10,000 employees. Currently, it's looking to hire 1,000 more and as many as 4,000 this year, said Amy Gooen, a spokeswoman.
In addition to the area's biggest employers, several tech start-ups, fueled by venture capital funding, have popped up.
Clearspring Technologies, an online widget maker based in McLean, had to lay off dozens of employees in 2009, but the firm rebounded last year and plans 30 hires this year, said Hooman Radfar, the chief executive.
"We're hiring like crazy," he said. Any employee who refers a new hire gets a $5,000 bonus.
Executives at Opower, an Arlington-based company that works with utilities to promote energy efficiency, reward successful referrals with biking trips to France. Late last year, the company landed a $50 million venture capital investment, which helped it hire 100 employees, said chief executive Daniel Yates.
Opower expects to hire the same number again this year, so the company begins every day with a meeting of top managers, who discuss their "white-glove candidate list."
"It's like a war zone, where you have an operational morning meeting to make sure everyone is in sync," Yates said. "Companies are going gangbusters to find the best talent and are pulling it from all across the country."
Come in for an interview, and the company gives you an iPad equipped with an app that showcases its products.
"When you're competing for the top talent, it's always boom days," he said.