January/February
2002
Are
you ready for the recovery?
WHY
NOW MAY BE JUST THE RIGHT TIME TO START HIRING AGAIN.
TRECESSION
AND RECOVERIES both have a way of sneaking up on the unsuspecting.
With
the benefit of 20-20 hindsight, government economists now
believe that the current recession began last March. In fact,
the warning signs of an end to a decade of seemingly boundless
growth stretched back to the previous Fall, when various engines
of growth began to sputter. Those warning signs included the
implosion of the dot-com economy, lagging sales of telecommunications
and computer hardware, a sagging stock market, the drying
up of capital investment and the curtailment of corporate
hiring.
It just
took a while for all this to sink in.
At the
end of the day, however, the demise of the 1990s boom years
proved once again that the economic cycle has yet to be abolished.
In the manner of a sine wave, bust had to follow boom –
but, just as inevitably, boom will come again. And, like the
current recession did, it will sneak up on little cat feet.
Because it will come in bits and pieces, we won’t know
for sure that it has arrived until the turnaround is well
under way.
The consensus
forecast remains that the U.S. will emerge from recession
in the second quarter of 2002, with other nations to follow
as the year goes on. Various wild cards, such as further terrorist
attacks or economic collapse in Argentina, could delay the
timing of course. Currently, however, the consensus view is
supported by such encouraging signs as surprisingly resilient
consumer spending, new home and office construction, and declining
inventory levels for a variety of products.
Until
recently, corporate hiring practices have been a lagging indicator
of economic change. Historically slow to react, most companies
used to reduce headcount well after a downturn had begun –
and were equally slow to rebuild their workforces after recovery
had begun.
Compared
though to the last recession from 1989 to 1992, companies
entered the 2001-2002 recession with more advanced information
systems that could process and analyze mountains of business
data in a few nanoseconds. As a result, the speed with which
employers began to trim their workforces and compensation
packages was unprecedented. This time around, employers may
resume their normal hiring and compensation practices in a
much more timely fashion as well.
Getting
the drop on competition
That
same band of government economists who declared the U.S. in
recession just eight months after it began will get together
next Christmas season or so to declare it officially over.
Employers
who wait for that word will be waiting far longer for the
job candidates they desperately need in order to catch up.
Sanford Rose Associates search consultants, from their discussions
with hiring managers across a broad spectrum of industries,
report that many companies already are giving serious consideration
to hiring once again. Pent-up demand for senior-level managers
is especially strong. At the moment, the supply of highly
qualified executives outweighs the number of active position
openings, but that situation can – and probably will
– change overnight.
As it
does, and hiring freeze changes to hiring thaw, the competition
for available job candidates will heat up too. What has been
a buyers’ market will become a sellers’ market,
with a shrinking pool of candidates commanding ever-higher
prices. That situation will be exacerbated by the fact that
the total population continues to age, while the supply of
employees aged 35 to 50 continues to decline. And as the economy
strengthens and new job creation resumes, the candidate pool
will become even shallower.
Thus,
there may be no time like the present to begin filling key
vacancies. Granted, most headcount reductions, excluding temporary
factory layoffs, are designed with the expectation that they
will be “permanent” – i.e., reductions will
result in a sustainable increase in productivity over a long
period. (Whether that proves to be the case is another matter.)
But even under the best of scenarios, large-scale staff reductions,
hiring freezes and early retirement programs always end up
getting rid of a few roses along with the weeds.
Wise
employers will begin looking for ways to fill in the bare
spots while supplies are at their peak. That kind of selective
hiring can avoid the problems of turning on the spigot all
the way, can proceed at a measured pace and can be stopped
– should the economy take an unexpected turn for the
worse.
Another
reason not to wait too long
There
is much anecdotal evidence of workplace stress today. A portion
of that stress relates to 9/11 – e.g., fear of flying
and/or traveling in general, a feeling of lost control, a
sense of increased vulnerability, etc. But an equally significant
source is the economic downturn that was well under way before
September. Based on a recent survey, a third of all workers
fear their jobs are at risk, while probably close to 100 percent
feel they are being overworked. (Productivity increases do
not come without a price.) Those of child-rearing age may
feel additional pressures outside of work as they rush to
ferry their offspring from soccer game to music practice to
ballet lessons and beyond.
It is
one thing to ask two employees to do the work of three if
some sort of definable goal is in place – such as restoring
the organization to profitability, weathering a downturn in
orders, saving other jobs, etc. The tacit quid pro quo is
that when the goal is achieved, the hardship will stop. It
is quite another thing to turn the exception into the rule.
Morale declines, quality suffers and productivity tanks. Sick
days increase. Employees wonder if things will ever return
to normal and begin to lose faith in the enterprise. The grass
looks greener and greener at other companies, and the very
employees one counted on keeping begin to leave.
Asking
the right questions
For those
about to re-enter the hiring market, or consider a possible
return, here are three good questions to ask:
1. What
are the most urgent positions I have to fill in terms of impact
on the bottom line?
2. What
are the most urgent positions I have to fill in terms of length
of time to fill them? And,
3. What
are the most urgent positions I have to fill in terms of positive
effect on employee morale?
Clearly
the answers may not be the same. (In one company, for example,
they might be sales representative, design engineer and payroll
clerk.) Nonetheless, they will help narrow the list of priorities
and will encourage a rational discussion of tradeoffs. (Do
I hire the sales rep first or begin the longer search for
a design engineer? And what about the payroll clerk?)
There
is no reason to go it alone. A professional search consultant
can provide important input about the ever-changing employment
marketplace and help sort out priorities, based on his or
her knowledge of your company, its needs and its competitors.
A popular
scrimshaw reproduction showing a team of sled dogs bears the
inscription, “If you are not the lead dog, the view
never changes.” That is a sobering reminder to any manager
– but especially these days to hiring managers in need
of top talent. Where in the pack do you want to be?
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