New Employment Realities ~ A Right Recruiting White Paper, February 2012
The last 4 years have been tumultuous for professionals and the employment world. Sometimes, change comes incrementally and sometimes it comes with a bang. Oddly enough, it’s often the sudden, revolutionary changes that go unnoticed rather than the slow incremental changes. Slow, evolutionary change gives you time to notice, understand and manage the process. Revolutionary change can happen so quickly that both business managers and professionals can end up operating under obsolete assumptions because they haven’t had time to recognize and digest new operating parameters. The last year has, in my opinion, created a whole new series of operating parameters for employment. These parameters are a microcosm of more generalized changes that have occurred in the business world over the last 3 years. Since I live in the world of employment I would like to explore these changes under the employment microscope. The reader can draw any parallels available to business in general. I will begin by listing general assumptions from 2003 when I started Right Recruiting and how they have changed in the last few years.
High Unemployment Gives Employers Leverage
It has been about 2 years (spring 2009) since Right Recruiting saw professional hiring pick up. Each quarter and year since has seen an increasing pace of hiring. Right now there are more open jobs in the US since mid-2008, almost a record high. Yet, we still have a period of high unemployment. Many people have been without work for years. Many employers who have entered the market over the past year are shocked at their difficulty in attracting quality candidates. I receive calls weekly from companies who have advertised attractive jobs for month to no avail. We’ve discussed this phenomenon in earlier White Papers so there is no need to go over the reasons now. The last few years have demonstrated that high unemployment can actually shrink the pool of qualified candidates rather than increase them. This eliminates any leverage that employers can use to gain from a high rate of unemployment.
This new reality is very important to businesses who are trying to hire this year. It is a competitive landscape for talent and will be more so throughout the year.
Candidates Apply For Jobs and HR Manages the Process
This is something that line managers MUST internalize into their hiring process. In the past, people would meekly apply for a job. They would send in a resume, wait to be called, accept a one-sided screening call from HR and wait 3 weeks for the manager to consider calling them in for an interview. If a good candidate fell through the cracks it was either meaningless to a manager because there were others or it was HRs fault for some unexplained reason. In the past, managers were able to use HR as a scapegoat for continuously unfilled jobs. “I am not getting support from my HR person”, they would cry. I hire, I don’t recruit, was a managers default mindset.
Three things have changed that.
One: HR as a function has more on its plate. Government regulations, benefits, salary issues have gotten enormously complex. Any generalist who adds recruiting as a full-time function to their job is superwoman or superman. They are also a masochist.
Two: the nature of recruiting has changed. There is no common market for all types of people. In the past, the local Sunday classifieds morphed into CareerBuilder and Monster. These were large marketplaces where all employers and candidates would gather to meet. No matter what the level of the job was, the default place to meet would be the equivalent of the Sunday classifieds. That has changed as age groups, disciplines and locality preferences have fractured into different meeting places. Looking to meet a candidate in a market where that type of candidate never visits is a frustrating experience.
Three: candidate behavior has changed. Rightly or wrongly, candidates demand more attention now once they are in the employment process. Maybe it’s a younger population or maybe it is just a higher sense of self-worth but candidates don’t meekly line up and apply for jobs anymore. They don’t patiently wait their place in line. They want info on why they should consider an employer rather than a passive voice telling them there needs to be a 4th interview to meet someone new who works 3 levels away from the job. Put simply, candidates for jobs at all levels are less forgiving of employer rudeness in the hiring process. They go in and out of the market at a whim and can disappear in the middle of the process. I am not saying this is right. I am saying it is a fact.
The new reality for managers is that they need to be an active part of the employment process and to connect with the candidate as a fellow human being early on. The image of the boss as a remote figure disappeared once teachers started wearing jeans. The concept that recruiting is just HRs job disappeared when employment became a complex area of its own.
Business is Weak, Manufacturing is Dead
I was interviewed on the radio last year on a Philadelphia business call-in show. The host’s first question to me revolved around the premise that all employers were struggling in this “dark economy”. I said that wasn’t quite true and that I was in daily contact with many firms who were optimistic about 2010, having come out of 2009 in fine shape. I emphasized that some businesses were indeed prospering. The host laughed in disbelief and asked me what industries were hiring. I told him that my clients were mostly manufacturing firms and they were all seeing an increase in business. He claimed that statement could not be true. He said to me “Everyone knows that manufacturing jobs are all being outsourced”. I responded with some facts. Over the last few years manufacturing had been the only sector of the economy that had grown. Finance and construction had both shrunk, for example. I also pointed out that the US manufactures more goods than any country in the world. Look it up, I said.
A well run US-based manufacturing firm is the most competitive toughest business in the world. These businesses, large or small, are staffed by similarly minded people who believe they can compete with anyone based on innovation, speed and smarts. They know that they are in a tough global economy but they see that as an opportunity rather than a negative.
The new reality for people choosing career tracks now is that good US manufacturers have driven the economy for the last 4 years. Making stuff is the new glamor profession. Factories can be sexy now.
Local Is Good
When I started Right Recruiting I emphasized local candidates. After all, I grew up here and so did millions of others. There is a large, labor pool here. Why move someone from 1,000 miles away for a job when there might be someone as good 20 miles away? Back then that was logical. Right now it is not. There are two reasons why. One is obvious and the other is unpleasant but true.
The first, obvious answer is that businesses are more specialized and run at a faster pace. That requires a greater degree of specificity in candidate backgrounds. There are probably 2,000 mechanical engineers within 20 miles of Reading, PA for example. But how many of them are mechanical engineers with 5 years of experience in customized machine design on SolidWorks with knowledge of PLC programming who will travel 25% of the time? Maybe 40 of them? And of the 40, how many are looking or interested in a new job? Maybe 3 or 4? That is not a high number of potential employees. You can play that numbers game with any discipline. Increasing your candidate pool can only be done by increasing your recruiting radius.
The second reason to increase your recruiting radius is a bit unpleasant. We’ve talked about businesses getting more complicated and running at a faster pace. Candidly, having a professional career requires more of the employee now and rewards that professional more as well. Have you ever been at a car wash or a supermarket checkout line and watched the group of 7 or 8 people basically doing a similar job? Of those 8 people, how many are actually working and how many of them are actually working hard? Isn’t there always only 1 or 2 that seem to take pride and enjoy their job? Don’t the rest just go through the motions, at best? If those were 8 applicants, which ones will you hire?
Anyone who thinks that everyone with a salary instead of a wage works hard has never run a business. The second reason to look beyond local people is a cultural reason. The commitment required from your employees is more intense than ever. Not every local person wants to give you that commitment. People have different value systems about work. The one that shares yours might live 500 miles away.
The new reality is that employers, even small firms, need to look beyond their neighborhood and to attract people to their location, not just to their company. Thriving companies have worked hard to expand their market. It’s time to expand your labor pool, if necessary.
Avoid Sponsoring Candidates
Sponsoring a candidate already here from another country used to be awkward and used to be unnecessary. For reasons stated above, your candidate pool now needs to be expanded. Sponsorship is not as hard to do as it used to be and is sometimes more necessary. Skill sets and education aside, the commitment to work hard that we mentioned earlier can vary dramatically from person to person, especially for more junior jobs. Look at the LinkedIn profiles and Facebook pages for many bachelor degreed junior people from different countries of origin and compare them. You will sometimes see a surprising differential in professionalism and eagerness to work.
The new reality for employers is that if you want to hire the best people, you need consider targeted sponsorship for specific jobs and understand how to identify and integrate non-native professionals into your operation before your competitor does. Once again, you’ve expanded your market. Expand your labor pool.
The New Realities
Let’s face it; the days when a small company could survive in a niche or local market are gone. As much as I loathe sports analogies, you can’t stand pat while your division improves itself in the draft or free agents. In the past, the competition was either a few other easily identifiable niche firms like yours or a few other small companies near you that carved up a local market. Right now, the competition could spring up suddenly from 6,000 miles away or a large player can buy one of your comfortable competitors. Your competition is the future, not the present.
The new realities I listed above are a part of the world now. Here is what the facts above mean to a business right now.
You must change how you see salaries. I know this hurts. If you are properly evaluating and targeting the best people, salary is an investment not an expense. If you want to hire the best person available, don’t base your salaries on the average person in your department.
1) Corporate culture has meaning. If you want a dedicated, cohesive workforce your reaction must be immediate if you spot a bad cultural fit. Committed, dedicated people can be made to feel foolish when they share a working environment with someone who doesn’t share their commitment. But don’t mistake culture for a high school clique with paychecks. Your culture should be performance and effort based and not superficial.
2) Make a meritocracy and value those who take advantage of that fact.
3) Be constantly on the lookout for better staff and for people who can and want to contribute. Make sure your employment process is attractive and not repulsive to such a person.
4) Invest in recruitment. It is now a specialty. Of course I know that’s self-serving advice but it is true nonetheless. A company that sees itself as a high-margin provider of products can’t have a “candidate equals commodity” employment process.
5) Don’t allow managers to avoid early participation in the employment process. A manager who can’t or won’t hire or who constantly hires the wrong people is not doing a significant part of their job.
6) Lastly, something I have learned in my business: NEVER RELAX.
As ever, thanks for getting this far. Contact me directly with any questions or comments and don’t forget Right Recruiting for all your employment needs.
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