Employment’s still down in leisure and hospitality, health care and manufacturing. But ‘all the stars are aligning’ for a year of record job gains in North Texas.
It’s a cliché to say the pandemic year was unlike any other, and don’t be surprised to hear the same about 2021, because both descriptions are likely to be true.
In Dallas-Fort Worth, where job growth feels like a birthright, the region lost nearly 122,000 jobs last year, according to seasonally adjusted data from the Federal Reserve Bank of Dallas. That’s the highest annual job loss ever for D-FW, and 12,000 more than in 2009 during the Great Recession.
But a turnaround has begun as COVID-19 vaccinations climb and people circulate again. Texas business executives are confident about their companies’ outlooks and long-term prospects, and measures of revenue growth and new orders have been hitting record highs, according to Dallas Fed surveys.
“All the stars are aligning to have a great recovery,” said Luis Torres, research economist at the Texas Real Estate Research Center at Texas A&M University.
The Dallas Fed projects Texas will add 816,000 jobs from December 2020 to December 2021. That would be nearly double the statewide job gains in 2014, the highest annual increase since at least 1940.
If employers make the projected hires, D-FW is likely to set job records, too. Since 2000, D-FW has accounted for 31% of the state’s job gains, and if it holds that share this year, North Texas would add over 250,000 jobs in ‘21.
That would more than recoup last year’s job losses, and some companies are already on the case.
“We’re hiring like crazy, and 2021 is shaping up to be the biggest growth we’ve ever had — in employee count and top-line revenue,” said Calvin Carter, founder and CEO of Bottle Rocket, a local firm best known for creating mobile apps and websites for dozens of well-known brands. “We’ve hired 50 people since the beginning of the year and we have to hire another 40 or 50 in the next three months.”
Bottle Rocket had 240 employees before the hiring binge, so the additions represent a major commitment. It’s due, in large part, to two lasting effects of the pandemic: a surge in digital life and the broad adoption of remote working.
Apps and websites are more popular — and necessary — than ever. One example: Grocery stores, restaurants and fast-food clients are using Bottle Rocket’s digital tools for online ordering, curbside pickup and delivery.
Consumers embraced those options early in the pandemic and continue to use them, Carter said. So clients want more.
“Companies have woken up and realized, ‘Wow, this connected lifestyle thing is real,’” Carter said. “They found a way to do business in a completely different way, a much less expensive way, and they don’t want to go back. Everyone’s trying to leverage technology as much as possible.”
About half of Bottle Rocket’s new hires will be in engineering and quality assurance, with the rest split among project management, product management and designing the user experience. These are tough positions to fill, and Carter is recruiting far beyond North Texas.
A big part of the pitch: Employees can work from wherever — and forever.
Carter embraced remote work early in the pandemic, saying people could do their job from an RV in Yellowstone Park as long as they had a good internet connection. The company later made remote work a permanent option.
“It’s a big benefit [for employees] and makes us much more competitive in recruiting,” Carter said. “It opens our hiring pool to the entirety of North America.”
That’s important because there aren’t enough qualified candidates within a 30-minute drive of Bottle Rocket’s headquarters in Addison, he said.
In February, government researchers updated 10-year projections for occupations based on the pandemic’s potential lasting effects, including more remote work and less business travel. Under a “strong impact scenario,” demand would grow faster for information workers and those in professional, scientific and technical services. Jobs would fall sharply in food services, hotels and more.
From 2019 to 2029, the number of software developers, computer research scientists and web developers is projected to grow 19% to 26% under a strong impact scenario, according to the report by researchers at the U.S. Bureau of Labor Statistics.
Demand for hotel clerks, cashiers, reservations agents and restaurant hosts is projected to fall by high double-digits over the same decade.
In another report on pandemic effects, researchers at the Dallas Fed warned of slower job growth in the short term, particularly due to mismatches in the labor market.
“For example, the large number of workers displaced from the leisure and hospitality sector likely won’t readily transition to growing sectors such as information technology and financial services,” they wrote. “They may more easily find employment related to e-commerce, such as in warehousing and parcel delivery services.”
Since the pandemic, D-FW has lost 42,100 jobs in leisure and hospitality while adding 10,700 positions in the sector that includes transportation and warehousing.
Other job gainers include food and beverage stores, building materials and garden supply retailers, financial activities, and professional, scientific and technical services.
In D-FW, employment still remains far below pre-pandemic levels in restaurants, health care and social assistance, and manufacturing.
The U.S. construction industry added jobs on the residential side, but losses on nonresidential projects surpassed the gains. Many expect demand for office space to decline or grow more slowly because of remote work.
Jamie Dimon, CEO of JPMorgan Chase, has been a staunch proponent of getting workers back into the office. But in an April letter to shareholders, he wrote: “For every 100 employees, we may need seats for only 60 on average. This will significantly reduce our need for real estate.”
If other businesses follow, that would threaten dense employment centers, from New York City to downtown Dallas to Plano, where Chase has a large regional office.
Carter said Bottle Rocket won’t need as much space, either. About 5% of employees come in regularly, and turnout can be 25 one day, a couple the next. In general, workers say they’re happier, according to company surveys, and productivity is higher.
He still believes it’s important to draw everyone together to collaborate and feed off one another’s energy. He’s planning a big company picnic for staffers and families, hoping the gathering will prompt more folks to show up at headquarters.
“We’ve already proven we can do the job with no one coming into the office,” Carter said. “But I want a future where people have variety and the freedom to choose. Really smart people get bored quickly, and we have a lot of really smart people.”
Features in our State of the City project’s look at the Dallas economy:
Real estate: Why building homes in Dallas is tough
Small business: Can small businesses bounce back?
Mayor Q&A: Eric Johnson discusses the Dallas economy