March 7th, 2012
With a career dedicated to recruitment and staffing, I am a student of the workplace and workforce. I pay close attention to the realities of the industry as trends emerge and realignments change the way we do things. What do I mean? Workforce realities are the collective impact of globalization, technology, government, demographics and social norms on running a business. And currently, there is a lot of debate about how business is doing workforce planning.
Post-recession thinking has it that business is prone to using a contractual workforce for six months–one year after a recession ends to handle increasing productivity needs. This mild, tenuous recovery followed right along with history, with one big exception! That one year quickly became two, and now three years. So what gives? What happened to the shift where companies stopped using temps and started hiring directly to the payroll? There has been a fundamental realignment in workplace planning thinking.
The business leaders of today know that the range and fluctuation in business can be extreme. Does anyone remember the last recession? Of course we all do. The last recession was akin to that 100 year flood that none of us can imagine happening to our town. But this time around, it was us that lived through it.
We will continue to use temporary workers to be flexible and adaptable to fluctuations in business demand. But the realities of today’s workforce is that we need to get used to it. The social norms still suggest that everyone should go get a good job and work for a great company where they can feel secure. But that security may come from our skills and our focus on building them — more so than where we work. Loyalty may not be completely dead, but almost. No company can make forever employment promises any longer.
Today, we are all responsible for our own career. It is our job to build our skills and to manage our career. And with a shift like this, skill building will come in the form of projects, contract work and temporary assignments.
Are you ready for the shift?
December 7th, 2011
Wait, maybe it is not that easy! Whether you are in a big company or a small entrepreneurial business, the fourth quarter is a time of planning and forecasting for the year ahead. 2012 is coming, and I am not sure we are all ready. But guess what? 2012 will come whether you plan or not. Why not be as ready as you can? Budget time, yahoo! The largest line item in all of our budgets? People!
You would think that with all of our advancements in IT and software that people planning would be easier. Workforce analytics and executive dashboards have come along way, however there is still a lot of managing to be done for most of us. Let’s look to history for our explanation. Traditions in budgets come into play. Long-range planning used to be much longer, 5 years or more. Business did not change as fast. We did not have as much information. The world moved a little slower. Today, one year can be a long time. Business moves up and down much, much quicker too. When it comes to the workforce, everything was more stable. Most of us stayed with one company a little longer. Companies could afford to be “parental” and careers began in the mail room and ended years later with the gold watch.
Wow, that sure is not true today. Budgeting for headcount did not change much year to year. Just add a few percentage points to last year for cost increases and move on. NOT ANY MORE. I have a good friend and customer who is in manufacturing. Every year they run an extensive process to plan for people within the business. And every year it is completely wrong. Planning how a business will do is one thing, but planning a business and its people needs? We are talking a completely different level of complexity.
The workforce/worker issue today is so complex. Each of us will have 7-10 different careers and many will change paths completely. There are multiple generations in the workforce. Some that remember and miss parental companies and many that know they will never exist again. Why? They grew up in households where their mom/dad/uncle/aunt were caught in down sizing and the realities of today’s world of work. Now there are options for free agency, contingent workers, contractors, temporaries. There is so much for managers to absorb and for the workforce to deal with. And yes, it makes planning for people and budgets harder.
Our managers psyche is forever changed. The economy is still so uncertain in its recovery and slowwww to rebound. We see high employment numbers and assume that people planning can and should be an afterthought. “There is so much available talent, just keep them coming.” My company hears this everyday. So many business plans are finished and then HR is asked to fill the openings. The War for Talent still exists. The War is just taking longer. The War is just different than we thought. Many critical skill sets remain difficult to staff with “A” players. Ask any head of engineering or VP of sales. The right talent is still rare.
Work is different today too. Most work we need done can be project oriented. Jobs and people are rarely perfectly matched. Change happens. People and jobs outgrow one another. This phenomenon has always happened, it is just speeding up! Technology has made most jobs portable — jobs can be done anywhere one has good Internet and telecom. Staff can be and is global.
So what does all this mean for you?
- The world of work and workers has never been more complex for your business. And our mindsets and tools to manage have not kept pace. We all need to change and evolve.
- Learn to embrace that the way work is viewed is forever changed. We must become workforce experts as managers of our businesses.
- Get a rolling forecast going. Yes, build a budget that allows for changes and inevitable surprises. Roll with it.
September 14th, 2011
President Obama outlined a $447 billion American Jobs Act this week that would cut payroll taxes paid by businesses and offer tax incentives for firms to hire new workers. But is this simply stimulus #2? Can our government really spend our way out of the iffy economy? Can building bridges and other infrastructure projects build long-term sustaining jobs? I am not so sure.
Government is a partner in a successful economic environment. Government’s role is to create an environment that encourages business. If we look to history we can see periods when government was not involved enough — times of monopolies and Robber Barrons. Currently, government’s position on business is uncertain at best. This uncertainty does not bolster confidence. And without confidence, there is no demand.
We cannot legislate our way out of this one. Nor can we spend our way out. Confidence from business leaders will come when they feel government is a willing and equal partner. The Jobs Act reduces employer costs for hiring. Sure, less payroll taxes help, but they do not create demand. If we feel that a reduction in taxes and a change tax code will help the economy then why not change the tax for the long run? The temporary nature of the Act does not instill the long term confidence necessary for leaders to make long term investments in their business. Lack of confidence = less demand.
Speaking of demand, a large percentage of our economy is driven by consumer confidence — as much as 70% of it. Without the commitment from businesses, new jobs will come slower than we need. Which means the real spark that can be ignited by the consumer will be slow to come.
I am just an entrepreneur. I don’t have all of the answers. But it is my sole job to know what my customers want and need to run my business accordingly. I either react and respond, or I don’t. That is really every leader’s job — to know their customers, their employees, their stakeholders. All Leaders have constituents. If business leaders fail to listen, their business fails over time. Government leaders? They get voted out of office.
All of this is about creating confidence as a leader. Demand will follow. Trust me. I live this every day.
For those of you that want some of the factoids on the “Act”, I outlined some key points below from an industry report for the staffing industry. The American Jobs Act would:
• Cut the 6.2% employers’ portion of the Social Security payroll tax in half on the first $5 million in wages
• Eliminate the 6.2% payroll taxes for any growth in payroll — whether through new hires, increased wages or both, up to $50 million above the previous year.
• Provide a $4,000 tax credit to employers that hire workers who have been looking for a job for more than six months
• Provide tax credits to encourage the hiring of unemployed veterans, both a “Returning Heroes Tax Credit” up to $5,600 and a “Wounded Warriors Tax Credit” of up to $9,600
• Prohibit employers from discriminating against unemployed workers when hiring
• Expand a payroll tax cut for workers. The tax cut would equal $1,500 to the typical family earning $50,000 a year.
• Fund infrastructure projects and other stimulus programs as well as provide for unemployment insurance reform.
September 7th, 2011
Sometimes seeing and acknowledging workforce and workplace change happens very slowly. For the past fifteen years there have been predictions that almost 50% of our total workforce will be contingent workers. To be specific, contingent means temporary, contractual labor, even seasonal and part-time workers.
We are not close to 50% yet, however, it seems with each economic business cycle the numbers edge upward. And you know what? I am beginning to wonder what ‘temporary’ means when it comes to jobs. But I will get back to that premise in a minute. First, let’s talk about the business side of the workforce.
Smart businesses have learned to manage their labor costs. Much attention and press has been given to our slow moving economy and the minimal job growth. Companies survived through the recession by trimming their “core” jobs and by reducing their contingent workers. In fact, from 2007 through mid-2009, the temporary workforce dove by 33.7% while the total private workforce dropped by just 5.8%, according to an analysis of Bureau of Labor Statistics data in The Atlantic.
For years the staffing industry has been espousing the benefits of a “contingent workforce strategy.” The numbers from 2007-2009 are evidence that businesses could reduce their costs and were able to do so quickly. In other words, the plan worked. Typically cost comes into play, simply put, there are less employee benefit costs. And for most, cost is a driver for using “temps.” However, the real benefit has been flexibility. The flexibility to lower labor costs quickly. The flexibility to change your workforce overnight. The ability to NOT have to build a permanent Human Resources department to screen, qualify, hire and fire. And finally, the ability and flexibility to add skills and competencies for project work.
And the numbers support that. In 2010, employment in temporary help services rose by about 300,000 to 2.21 million, according to the BLS. “By 2012, contingent employment will have returned to 2008 levels,” says Dana Shaw, senior vice president for strategy and solutions at Staffing Industry Analysts in Mountain View, Calif.
Growth and decline and temporary jobs will happen as a part of smart business. But isn’t every job temporary anyway? Have you ever looked at the average tenure of leaders of public companies? Some studies support that they average a little over year. I know some contract work that is longer than that! Besides, think about your job. Yes, the one you are in right now. Think about how much project work there is with a beginning and an end. Think about how frequently you are challenged to do things that aren’t written in your job description. Businesses demand both productivity and a growth in skills from its workers.
Burkhard theory suggests that most people are congruent or right for their jobs just a few times a year. Companies change fast. Jobs evolve. We grow in interest and in skill, and our job might not. Or the job changes around us and we might not be capable or even interested in how it evolves. If you’re in a fast-growing company, skills and work experience will change faster than people can settle in. If your business is shrinking? Many employees become too experienced for their role.
It seems like just yesterday that we all wanted was to work for parental companies and retire with the gold watch after thirty years. Many of us lived through the “age of free agency” in the workforce and perhaps scoffed at it for our own careers. Change comes slowly. However, change does come. And perhaps we are beginning to realize that every job is in fact “temporary.”
May 11th, 2011
Over the past few years we have all gotten quite used to operating in down times. As leaders we were looking for ways to reduce our overall costs, delay investments, or find ways to focus on being more efficient in our business. It took a while for most of us to fall in line and practice this form of tough love, but once we started it became what we know and do. And evidently, recession style leadership practices have helped many companies build cash and improve their balance sheet while streamlining their operations for future growth.
Unfortunately, this recession mindset impacted the “people side” of our business. It was hard to stop hiring at first, than BAM, everyone went cold turkey! Then the media continued to report rising unemployment and that the masses could not find meaningful work. At the height of the recession, there were seven unemployed for every job. I believe this perspective has seeped into our consciousness; we expect to have talent galore lining up for the few openings we have. And our people practices began to shift — we believed that:
We had unlimited choices to fill our open jobs.
We should slow down our hiring practices and bring in more candidates.
We could scoop up a potential bargain at real value and that people would appreciate having any job!
We should not have to compromise, negotiate or move off of our perfect candidate because of the perception of available talent.
Every day, my company coaches leaders on hiring around the shifting and changing realities. People are getting jobs more quickly, they have more choices and they are receiving raises again — not big ones, but compensation is beginning to increase. The reality is, despite the labor stats you may read, there are not as many talented people to go around. Having a recession mindset is dangerous because we don’t know when to change our behavior or trust that now is the time to hire or take risks again.
Perhaps you have been thinking that these thoughts are not your reality. I know my customers in the “ist” (scientists, biologists) and engineer category know that regardless of the reality of the total job market, some talent never went “on sale”. So as things change, we must all adapt. So how do you go about changing your recession mindset?
Gathering information and observing your company and its behaviors are good steps to start with. After all, observing and coaching people is what leaders do, right?
Think about the way you and your organization hire. What is your team’s mindset? Perhaps it is time to have some training on the shifting workforce and workplace realities and trends?
Are you starting to lose talent through your hiring process? Are you moving through the process with pace? Or does your company think it has “a recession time line” to make its decisions?
Is recruitment in your company not working well? At CBI Group we see issues with recruitment processes every day. A recruitment organization that was built structurally to hire less and more slowly will not compete with today’s faster pace, higher volume recruitment world.
Bottom line — what got you here, won’t get you there! The survival instincts that got you through the recession must now shift. Are you ready to leave your recession mindset behind?
April 6th, 2011
In talking with our customers and prospects, it has become all too common to hear the phrase, “My company has forgotten how to hire.” The economic meltdown impacted hiring in some interesting ways. Of course it slowed it down or, in many cases, stopped altogether. Things became easier for employers due to the increase in job-seekers with limited choices, who were often willing to work for less. Now that times are improving, there is a very new reality; organizations have generally lost the organizational competency it takes to hire, even for “normal” hiring volumes.
One of our large customers had moved all of their recruitment staff into other projects and few wanted to return to recruiting. A small business customer was ready to hire sales staff again and their management team needed several sessions to get reacquainted with their hiring process. Companies are still cautious, yet ready to hire when necessary. Businesses are once again launching new products, which requires new staff. Positions that were downsized are now being replaced and companies need new talent. The why is somewhat obvious; the point is companies are hiring again and have forgotten how.
I’d like to help. If you are responsible for hiring again, consider the following:
Hiring challenges are systemic.
Human Resources has their hands full and their problems will take time to fix. Applicant tracking systems sit unused. Hiring managers don’t remember how to interview and forget to debrief afterwards. There are a lot of pieces to the puzzle, so take the time to remember how they connect.
How much is enough for now?
Workforce planning is a strategic competency that many firms struggled with even when they had the resources to hire fast. Hiring needs have changed primarily because leaders don’t know how long they will need to sustain a certain hiring output. Today there are so many good options to get the hiring done. Temp firms, recruitment outsourcing firms, research and recruitment companies exist to augment and complement a strong strategic recruitment game plan.
Hiring is a true team sport.
Hiring managers and Human Resources staff must work together, know each others’ role and understand both the process and the possible outcomes. Attracting talent and evaluating talent are done at the same time, sort of like slow dancing and fast dancing simultaneously. This is hard to do! Making hiring an organizational strength takes real time – just like any team sport.
Keep it simple.
There is a tendency to over-engineer your recruitment strategy because you have been given the chance to start over! Don’t. This is the time for simplicity, teamwork and education across the business. Be careful about adding too much too soon to your process!
I don’t have enough volume yet.
Business is now hiring. Energy is building and the pace is quickening. Yet most find themselves in-between sizes. There is not enough hiring volume to justify additional recruitment staff. Or hiring needs are difficult skill sets that are beyond the level in volume and difficulty of the current recruitment team. Now is the time to build flexibility and scalability into your model.
If you can relate to any of these issues, know you’re not alone. Hiring the right people isn’t simply matching a resume to a job description. People matters will never be that black & white. If you have any questions, I’d be happy to help.
March 9th, 2011
Oh, what a difference a year brings. Last year recruitment departments were hopeful for any marketplace news that might influence hiring at their organizations. Just how many “special projects” can one do anyway? Compliance and reporting can only carry us for so long. Eventually, Talent Leaders needed to manage the down cycle by reducing talent acquisition head count (albeit at least temporarily). And we did just that. Whether corporate, outsourcing or third party, we trimmed.
Now that the world of recruiting is coming back strongly, I propose that as leaders, we take our experiences to heart and not let traditional corporate experiences influence our fiefdom building tendencies. It is only natural that we all want our own stuff — we want our own teams and for our people to direct and mold our own people. This is the old, easier way right? Not if you were the one who had to let “your people” go. Even if you’ve tried hard to bury the experience, the memories of the recession linger. We all will remember for a long, long time.
So I propose that talent acquisition is all about twisting the facts into fiction. Here are my favorite “facts.” You decide if they are fact or fiction.
Talent acquisition fact or fiction #1. Every organization follows a predictable cycle with their hiring. Busy spike, leveling off, down time. The distinct cycles of growth, maturity, and declines influence both the complexity of the work and scalability of the recruitment organization!
Talent acquisition fact or fiction #2. Most organizations do not have great workforce planning tools and resources. Hiring needs can be like a surprise birthday party. Surprise! 50 new reqs for the first of next month!
Talent acquisition fact or fiction #3. Despite the pain experienced during the recession, leaders have egos that trump their memory and still feel inclined to build teams of their own.
Talent acquisition fact or fiction #4. A Leader’s decision to outsource or insource is based on experiences and the approach of companies they have worked for in the past.
Talent acquisition fact or fiction #5. Culture is the only determining factor on recruitment strategy. To outsource or insource is a cultural decision.
Regardless of your view of my “facts,” all of us in talent acquisition have an obligation to think differently today. The “facts” acknowledge that we are in for a turbulent, wild ride. Everything is changing and we must change as well. We need to anticipate and build a talent acquisition strategy that is flexible, technical and scalable enough to address the ups and downs associated with the cycles of corporate recruitment.
October 1st, 2010
Most entrepreneurs hate to take risks. In fact, the more we take the more we try to mitigate the risks we can control. We scrimp and save and have conservative investments in our stocks and 401k’s. When we borrow for the business, we avoid borrowing in our personal lives. When we invest in our business, we reduce our expenses at home any way we can. Entrepreneurs know how hard it is to get one dollar that is spent back into their business.
When we started our business, we were real believers in the American Dream. We bought into the notion of being your own boss. We wanted to take our idea, build a great place to work, grow it and have it create a “lifestyle” that few ever achieve. Many want this but will not attempt it because of the risks and sacrifice required.
Over the last two years we have seen the “entrepreneurial dream” fractured for many. There are countless examples of good businesses that could no longer support themselves and their owners. We’ve all heard stories of homes in foreclosure, loans called in and bankruptcies filed. This is the really dreadful bottom line that many have faced. There are those that have to go find jobs in a marketplace that will not even pay them unemployment (one of the risks of being your own boss).
There are also the stories of those companies that survived through the recession. They have made their payments and negotiated to lower their business costs. They have lowered employee head count and strategically executed plans to squeeze out more top line revenues. Yet they have little left to invest, cannot borrow and probably would not if they could get it. They cannot hire. They cannot grow. They are wounded….The question that comes to mind is, “When can we trust that risk taking might be rewarded again?“.
This is not intended to be all doom and gloom. In fact, my message around all of this is that there is real hope. I have learned many important leadership lessons through this recession that helped me survive and thrive with CBI Group.
My risk taking list:
1. You really have to be willing to canabilize your business. No sacred cows here please. Times change. We must launch new offerings all of the time. This life cycle is critical.
2. Balance. Gone are the days where business is like a constant happy hour! Get your life in order. Stay in shape. Have a life. Take a simple day off or vacation. Your staff and your business will thank you.
3. Business is an ultra-marathon. Not a marathon. Or half marathon. Many of us start our businesses like a short sprint and attempt to do it forever. I have been doing this for nine years and have come to understand that one must pace themselves for a long run. When a great runner runs a 100 mile race, they run 16 minute miles. A snails pace compared to what they can do in a short run and more than twice as slow as a training pace. What does this mean in business? That recessions happen; there is a cycle to business and one must plan for the ups and downs of the business race!
4. Know when to get back in the race or stock market or whatever metaphor you like. Everything evolves. This market is improving. Many of us are making good things happen.
When will you trust the entrepreneurial dream again?
April 7th, 2010
I think you would have to be living under a rock lately to not have noticed the sudden shift and change in the marketplace. The jobs report from last Friday was extremely positive. Temporary jobs are up again now four months in a row. Service jobs have spiked; manufacturing is up; almost all sectors saw some spike. Yes, some are government census jobs, but even construction made solid job gains. We still have a long way to go. We have lost over 8 millions jobs over the last few years, however, momentum is just that – momentum. We will take all of the good news we can get!
If it is all good news how can the marketplace be considered schizophrenic? Because there is so much ground to make up! Because of the depth and breadth of the challenge ahead. Because organizations continue to be cautious and careful. Because there are still a record number of unemployed on employment for more than six months. And the good news? Less newly unemployed each month over the last 6 months.
Generally speaking, jobs come 6-12 months after the stock market corrects. Well, the recession officially began to end in the second quarter of last year according to those that know. And one year later, jobs begin to happen!
The great thing about business is that no one likes to be left behind. No one wants to miss a wave. If your business has survived; it is most likely somewhat weakened. Every business needs each new project, every new customer. No leader wants to miss opportunities when they have been so few and far between! And hopefully we can pull out of this a little faster with all of us afraid that we might miss something!
Are you ready? Times are a-changing? This is why we hunkered down right? To get back to good times. To be there when the opportunities re-emerged. I, for one, am ready! Thanks to my lessons learned during this recession, so is my company.
March 17th, 2010
I was honored to be the speaker at last night’s DelMarVa SHRM event. View the presentation above or download using the link below.
“The Economic Tsunami: How Businesses Are Rethinking Recruitment & Retention.”
Delmarva SHRM – Economic Tsunami Presentation