Newspaper Hiring Unlikely to Surge

By: Lucia Moses After the launch of INtake, a planned free weekly for young readers, The Indianapolis Star expects to employ 14 ad sales and editorial positions it didn't have before, a 1% staff increase. "We have a new publication. It doesn't just happen by itself," said Star Publisher Barbara Henry. "If you have revenue to support it, you hire."

If papers hire at all next year, these are the kinds of positions they're likely to add: sales and editorial people to staff news enhancements or new publications. But, as public companies are likely to say at two major investor conferences this week, hiring will remain conservative next year -- despite signs that recovery is under way.

Companies "see some improving advertising trends right now," and that keeps them from continuing to downsize, said Kevin Gruneich, newspaper analyst with Bear, Stearns & Co. But he predicted industry employment will stay flat next year. Most companies have "tackled health care and benefits costs pretty well, as they've pushed most of that cost to the employees. ... But given that the advertising recovery has been choppy, we just don't see much movement to hire at this point."

Peter Appert, who follows newspapers for Goldman Sachs, said that after having cut an estimated 10% out of the workforce over the past three years, publishers could still trim as much as 1% next year. Companies are intent on protecting or growing profit margins, and he projected labor costs would rise about 4% to 5%. Reductions will come through attrition in manufacturing, distribution, and administration, rather than news and sales, he predicted.

Even expansion-minded companies aren't necessarily looking at net staffing increases. At Belo, which has started niche publications in its newspaper markets while exploring more such opportunities, "We do not expect our new product launches to have an impact on head count," spokesman Scott Baradell wrote in an e-mail. The McClatchy Co. said it would continue to seek production efficiency gains that will let it add to the news side without increasing total employment.

After the bloodletting of recent years, and given the high cost of benefits, publishers will be extra cautious about making new hires. "They're going to have to prove hiring new people pays off," said Mike Walker, partner at executive search firm Youngs, Walker & Co., Inverness, Ill. "The litmus test for proving that is going to be tougher."

The downturn has affected not just the scope but the nature of hiring. Gone are the days when papers sought new blood in the consumer packaged goods industry; publishers are back to seeking people with traditional newspaper backgrounds.

Papers also are more likely to fill openings by shuffling existing staff, rather than hiring additional bodies from the outside, recruiters said. "It's difficult for most papers to create new positions outright, or to make external hires," said executive recruiter Jeff Kohler of Jeff Kohler & Associates, North Wales, Pa.

Will such conservatism come at a cost? "I think a newspaper company potentially limits itself if it does not occasionally recruit externally to bring in new talent, new perspective," Kohler said.

An improvement in ad spending doesn't necessarily mean people on the business side can rest easy. Walker said ad directors and publishers will be measured against their peers when the economy picks up. "We've seen a lot of companies looking for ad directors in the past year," he said. "It's a trend we've always seen when the economy gets tight. As the economy speeds up, pressure remains on executives."