'Your World': Recruitment Company CEO Having Trouble Filling Jobs

This is a rush transcript from "Your World With Neil Cavuto," July 8, 2010. This copy may not be in its final form and may be updated.

BRIAN SULLIVAN, GUEST HOST: All right, later on this month, more than three million people may lose their jobless benefits. And, today, new claims for unemployment insurance reaching its lowest level since May on a continued basis.

But the numbers may not be all that they seem and may still be higher than they need to be.

Our next guest runs a recruiting company in California. He says people are turning down jobs that pay as much as $60,000 a year, and he suspects it may be because of extended jobless benefits.

Karl Dinse is CEO of Management Recruiters of Sacramento and joins us now.

Karl, welcome to "Your World." Thanks for coming on.

KARL DINSE, CEO, MANAGEMENT RECRUITERS OF SACRAMENTO: Thank you, Brian.

SULLIVAN: All right, you had a couple positions open at a manufacturing company in Oregon. They paid pretty well, engineering jobs, 60 grand a year.

DINSE: Right.

SULLIVAN: And you couldn't fill them. How come?

DINSE: Right.

Well, this happened a couple of months ago, Brian. It was really interesting. Growth — manufacturing firm client we have worked with, oh, gosh, over the last five years, expanding their operations, believe it or not, enjoying nice growth, they had several design engineering positions they're wanting us to fill.

Right at the same time, in that same area, there's a manufacturing — another manufacturing firm that is shutting down, having to lay off, and has similar engineering — engineers with similar backgrounds.

So, we start contacting some of these engineers, and we're getting turned down. And the positions were in the $60,000 range.

(CROSSTALK)

SULLIVAN: Are these people that — Karl, are these guys turning it down, are they folks that already have a job or are you talking to people that are unemployed?

DINSE: No, no, this is — well, we're talking to people that are unemployed. And this is the part that was frustrating to us. What's going on here?

So, when my senior recruiter came to me and explained, I said, well, we have got to — what's going on? And, so, as we probed this, here's what we learned. Well, one of the answers was, well, you know, I have got another — a spousal income. My spouse is making money. You know what? I can sit on the sidelines, I'm picking up $400 a week unemployment. You know, we don't have to pay child care if I stay home.

So, he said, do the math. One of them said to us, if they will pay $80,000, I think I would consider it. Well, this individual was making $60,000 before. And that's what we were offering. So...

SULLIVAN: Yes. Well, I'm thinking, OK, $5,000 a month on a gross basis. Factor in California taxes or Oregon taxes, I guess, you're probably netting...

DINSE: Right.

SULLIVAN: You're probably netting about $3,000 a month. Child care could cost you two grand a month. So, you're right. Without paying a babysitter, the unemployment benefits are going to pay $1,600 a bunch, vs. the $1,000 on top of child care. That person, unfortunately, sounds like he just made a pretty rational economic decision.

DINSE: Well, what they're doing, too, is they're staying on the sidelines, figuring — they're holding out for the perfect position. So, they're not willing to go for the lesser one, which I understand to a certain extent, if they're getting $400 a week.

And then, sometimes, too, as I may have mentioned, they're picking up some jobs on the side, cash jobs, maybe $200 or $300 a week. So, again, you do the numbers on this, and hey, it doesn't make sense.

(CROSSTALK)

SULLIVAN: Karl, how common is — I mean, is this one fringe guy or is this something that's a little more common?

DINSE: Clearly not an isolated incident. Interesting, as this story broke on The Wall Street Journal, where I was quoted, a number of the other management recruiters, MRI offices within our network sent me e-mails and gave me some very similar examples and situations, one out of Indiana, one from Michigan, Wisconsin.

It was really interesting. So, it's certainly not an isolated incident. I really think it's more just — it's kind of a mentality, unfortunately.

SULLIVAN: Yes. It does sound economically rational, although not good for anybody, probably.

DINSE: Yes.

SULLIVAN: Karl Dinse, CEO and president of Management Recruiters of America, thank you — or Sacramento, rather. Karl, thank you very much.

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