State sees surge in high-paying white-collar jobs

Developer Rick Caruso's firm, Caruso Affiliated, had several projects on hold during the recession but now wants to double the size of its construction department and is looking to hire seasoned professionals.
(Gary Friedman / Los Angeles Times)

One of the fastest-growing employment sectors in California is also among the highest paying.

Professional services jobs — engineers, architects, lawyers, accountants and consultants — are growing in California at more than twice the rate of overall employment since the recession ended in 2009, according to an analysis of state economic data.

That’s faster than both the healthcare and hospitality industries, two other high-growth segments of the labor market.


“This is where we want the jobs,” said Christopher Thornberg, founding partner at Beacon Economics, who specializes in the California economy. “These are high-skilled, high-paid jobs.”

Professional services firms are crucial for local economies because they tend to serve clients across the nation and the world, economists say. That brings outside money into the region, driving further expansion and more local spending.

“If we want the pie to get bigger, we want to see growth happening in these parts of the economy,” said Robert Kleinhenz, chief economist with the Los Angeles County Economic Development Corp.

Overall, California has been adding jobs faster than all but five states in the last three years.

But economists caution that much of the growth has been clustered at either the high or low ends of the income scale.

The high-end professional services industry has grown 17% since the recession, compared with 8% growth in overall employment.


During the recession, many companies held off on upgrades for internal accounting or IT systems, said Cyndi Karapogosian, a senior regional vice president in Southern California for Robert Half International, a major staffing agency.

With an improving economy, she said she has seen incredible demand for experienced accountants and database managers as executives feel more comfortable expanding operations.

“Companies that hadn’t invested in the past or held on to their capital expenditures are now loosening the purse strings,” she said.

The professional services segment now accounts for 8% of the state’s total workforce, up from 6% a decade ago.

By comparison, the lower-paying leisure and hospitality sector is responsible for about 11% of the state’s nonfarm workers. Healthcare makes up 13% of the state’s workforce.

The competition is stiff for skilled job candidates, Karapogosian said. A year ago, it might have taken two to three weeks for top talent to find a match; now, good prospects are being snapped up within days, she said.


“The shelf life of really good candidates has shifted quite a bit,” Karapagosian said.

Compensation for professional and technical services workers tends to be much higher than in the state’s other fast-growing job categories. In California last year, average weekly pay for the sector was $1,878 — more than twice the weekly pay of $889 in healthcare and nearly four times as much as the pay of $481 in the leisure and hospitality sector.

And those wages are rising. Since 2010, professional and technical services workers got a 7.6% pay boost to an average $117,494 annual wage, according to inflation-adjusted data from Economic Modeling Specialists International. That figure includes bonuses, stock options and severance pay, as well as supplements such as employer contributions to a 401(k).

Unlike some other higher-wage sectors, including manufacturing, professional services workers face less risk of outsourcing.

“These are jobs that to some extent need to be done in the U.S.,” said Enrico Moretti, an economics professor at UC Berkeley. “Therefore, the wages have faced less pressure from low-wage competition.”

The demand for the professional services industry reflects the overall improvement in the economy, as businesses of all types need skilled workers and consultants to keep up with growing demand.

Los Angeles retail developer Caruso Affiliated had several major projects on hold during the recession, and the company was reluctant to make new hires, said Judy Johnson, a company spokeswoman. But over the last six months, the company has had several new hotel and residential developments come online.


Caruso is now looking to double the size of its construction department and has been looking for veteran land-use attorneys, architects and consultants — both in-house and through outside contracts.

“Obviously the market appetite was low for what we want to build,” Johnson said. “Now the financial markets have opened up, and finding lending partners has been a lot easier for businesses than it was five years ago, let alone three years ago.”

Jacob Yadegar, president of Empyrean Funding, a mortgage company, is back to hiring skilled bookkeepers and accountants after shedding jobs in the wake of the financial crisis. But he said the company is being more selective in its process.

“We’re not being overly optimistic and aggressive with our expansion,” Yadegar said. “We’ve got to find the right people. These are higher-paid positions, so we’re not in a rush.”

Twitter @c_kirkham


Times staffer writer Tiffany Hsu contributed to this report.