MAY
2001
Why
Aren’t Job-Seekers in Greater Supply?
THE
UNEMPLOYMENT NEWS FOR MARCH told a seemingly grim
tale: U.S. unemployment had risen from 4.2 to 4.3 percent,
putting an additional 86,000 people out of work. Layoffs since
the beginning of the year had surpassed the quarter-million
mark. In response, the stock market – which had rebounded
the day before on positive earnings news – sank once
again.
Currently,
most observers believe the economy hovers at the brink of
a modest recession. Workers’ confidence in job security
is growing less. The candidate shortages of the past several
years should be diminishing. Yet many employers find turndowns
for job offers increasing instead of abating. What is going
on? And why isn’t the recruiting game getting any easier?
The
Downturn with a Difference
On the
one hand, the present downturn has followed a classic economic
pattern. An overheated and over-valued segment of the economy
— aka the “New Economy” —expanded
until it burst, triggering widespread stock sell-offs, market
losses, margin calls, declining savings and net worth, reduced
consumer confidence, lower demand for goods and services of
all kinds and corresponding corporate cutbacks in plants,
equipment, inventories and personnel.
That
whole pattern is generally referred to as the “economic
cycle,” which means that we’ve seen it before
and will see it again. Of course, because the most recent
recession ended in early 1993, about a quarter of the workforce
has not seen it before. Some of those first-timers, as dot-coms
have become dot-gones, actually have had to buy a suit and
learn enough table manners to survive an interview at an Old
Economy company. (Who knows, maybe Brooks Brothers will rise
again!)
Companies,
on the other hand, which are generally run by folks old enough
to recall a recession or two, have learned from past mistakes.
Across-the-board job reductions and hiring freezes have been
replaced this time around with selective cuts that trim fat
without reducing muscle. Thus, the corporate travel department
may bite the dust, while the customer relationship management
(CRM) unit survives unscathed and may even add to staff.
Likewise,
most employers are taking great care to communicate their
intentions clearly, so as not to immobilize the entire workforce.
The employee who believes that his or her company is acting
rationally is far more likely to be supportive of organizational
change.
Last
but not least, a growing number of companies are realizing
that, while good times require good people, bad times require
really good people. Thus, few organizations have curtailed
all hiring. Strategic hiring is more the norm – as evidenced,
for example, by the recent trend in cutting-edge companies
to designate “Chief Talent Officers” to guide
the effort.
The
Gun-Shy Employee
Let’s
remember one thing: March’s 4.3-percent unemployment
rate is still within most economists’ definition of
statistical full employment. Yes indeed, 86,000 newly unemployed
people are nothing to sneeze at. But many will find work within
four to six months, while the others are scattered across
the country, represent all income levels and come from a broad
range of industries and occupations. By definition, few would
fall under their former employers’ definitions of “keepers.”
The huge
majority of the workforce still employed would just as soon
remain that way until the economy shows clear signs of recovery
– and “safe” chances can be taken once again.
Many, especially on the lower job rungs, are fearful of the
LIFO principle (last in, first out) should they change jobs.
With economists of all stripes predicting an end to the downturn
during the third or fourth quarter of this year, postponement
of major career decisions for a few more months does not seem
like a major burden to risk-aversive employees. Better the
devil one knows than the devil one does not.
The strategic
employer, of course, does not set its sights on the huge majority
of the workforce – that portion which search consultants
refer to as “low-hanging fruit.” In fact, companies
that have critical position openings and/or want to build
share in down markets can’t afford to wait for conditions
to improve. They need to act now, and they seek neither the
safely employed nor the desperately unemployed. Instead, they
seek the aggressive individual who can recognize an extraordinary
opportunity and seize it. Sanford Rose Associates calls such
individuals the “people who make a difference”
in their organization’s performance.
The
Executive Search Consultant’s Role
During
the mid- to late 1990s, numerous people entered the search
and staffing business with two beliefs: (1) that employers’
demand for candidates had become – and would remain
– insatiable; and (2) that the Internet would become
an inexhaustible source of their supply. Finding superior
talent the old-fashioned way – one person at a time
– was predicted to become a relic of the past.
Of course,
the New Economy bubble burst, and those millions of “active”
candidates on the Web started acting amazingly passive. In
addition, employers began to question what value was being
added by the mindless processing and forwarding of candidates
from this or that job board. If this was all there was to
filling position openings with truly qualified people, why
couldn’t companies do it themselves and eliminate the
middleman?
(The
decision of a well-known recruiting firm to post its search
for the next CEO of Yahoo! on the firm’s website recently
caused a commotion within the search community. Even though
the decision was very with-it, was that the way to fill a
multi-million-dollar position? Moreover, was the firm conducting
a real search or simply advertising on Yahoo’s behalf?)
Electronic
recruiting will remain an important weapon in the search industry’s
arsenal, especially as it advances beyond database searches,
but it is only one of many weapons. It may demonstrate the
necessary degree of cool when recruiting the next leader of
a major Internet search engine, but it may be next to useless
in locating the right person to fix a smokestack company teetering
on the edge of bankruptcy.
In surveys
conducted over the last two years by a major business publication
and by an industry association, employers have emphasized
that the one thing they want the most from outside search
consultants is the added value that comes from personal commitment,
expert knowledge and sound advice.
Avoiding
False Starts and Wrong Turns
“It
was a dark and foggy night.”
While
the economy indeed is murky, and the word has come down from
the highest levels to control expenses, you still may be in
the market for a few strategic hires. You need the very best
people you can find, but where to look?
Discuss
your problems with a trusted search consultant. Take advantage
of the consultant’s knowledge of the market, where the
“keepers” are hiding and what it will take for
them to make a move. Be candid about any restrictions or budget
limitations that you may have. Make the consultant your business
partner and authorize him or her to speak on your behalf –
with full knowledge of your needs and the position’s
opportunities. Expect your consultant to know the candidate’s
situation well enough to practice “no surprises recruiting.”
There
are indeed really good people available, but they are in short
supply and often not readily apparent. Empower your search
consultant to find them – before your competition does.
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