Where's the Work?

Is it time for job seekers to trade in their fuzzy slippers for tasseled loafers? While recruiters and agencies say a tide of optimism has washed over the industry with the start of a new year, most shops are waiting for new business before expanding their scaled-down ranks.

Upbeat ad-spending forecasts for this year—fueled in part by the Summer Olympics and the elections—have boosted morale, if not hiring levels just yet. “It’s as if somebody gave somebody a positive pill,” says Fifi Jacobs, a partner at creative recruiters JacobsKozuck in New York.

Any glimmer of good news is welcome in the agency business, an industry that employed a 10-year high of 207,000 people in mid-2000, shrinking 20 percent by last November to 165,000, according to the most recent numbers from the Bureau of Labor Statistics.

In the wake of these layoffs, many agencies are working with such lean staffs that new business is...