Talent Surplus – Not!

The U.S. Department of Labor reported that year-to-date totals of layoff events (12,542) and related initial claims (1,274,765) in 2008 were the highest January-August totals since 2003. Over the year, jobless rates were up in 47 states and the District of Columbia and down in 3 states. The national unemployment rate rose to 6.1 percent in August, 1.4 percentage points higher than a year earlier.

Does this mean that the scarcity of talent has become less and talent is readily available for the few openings employers have come up in this uncertain economy? To answer this question, first answer these questions:

1. With declining revenues and fewer opportunities on the horizon, is every employee’s contribution even more important to the success of your business and to justifying the role in your organization?

2. If you have made reductions in staff, have you considered performance as one of the deciding factors respecting who to let go, and released the lesser producing employees first?

If you answered yes to either question, take pause as you contemplate hiring from the pool of available “active” candidates. Likely, these candidates are “first wavers” who in a robust economy “flew under the radar” and now find themselves “redundant” in an economy that requires top talent to produce results. This doesn’t mean all unemployed or job-seeking candidates are bad or mediocre, but for many it is indeed the fact.

As the numbers of candidates on the market increases it becomes increasingly difficult to “separate the wheat from the chaffe” and choose the people that are of high quality from a group of mixed quality.

Does it make sense then to continue to employ the services of a search firm to find talent for your organization? Consider that a professional executive search firm is in constant contact with candidates and hiring managers across the segments in which they specialize. This “constant contact” is with “passive” candidates who, when facing economic instability, are more likely to entertain a new opportunity if presented by a known, trusted advisor.

The bottom line…great people are hard to find in even the best “employer's market” circumstances, and only great people are a good investment when resources are dear. An investment in a search fee pays dividends when a new employee not only joins your organization, but contributes with the high level of skill, talent and character commonly found with employed “passive” candidates who “fly under your radar.”

STAFFING INDUSTRY ANALYSTS BRIEFING

Posted On: 9/5/2008 http://www.staffingindustry.com

BRIEFING - Economic indicators August 2008
ECRI weekly leading index contracts
Manufacturing and nonmanufacturing indices running flat
Four-week jobless claims up 11.5% from July
Craig Johnson

Event
August was a tough month for economic indicators. Several indicators fell and others posted little change.

Background and analysis
The Economic Cycle Research Institute's weekly leading index contracted in August. The index declined 11.7% in the week ended Aug. 29 versus the year earlier. This is 360 basis points worse than the comparable number of a month ago.

In the U.S. manufacturing sector, economic activity in August was about the same as in July, the Institute for Supply Management reported. The ISM's key purchasing managers' index for manufacturing registered 49.9 in August, nearly unchanged from 50.0 in July. Readings of more than 50 indicate expansion.

"This continues the 2008 trend toward negligible growth or contraction each month, but ultimately results in very little overall change in the sector," said Norbert Ore, chair of the ISM's manufacturing business survey committee.

Economic activity in the U.S. service sector edged up slightly in August after contracting in July, according to the ISM's nonmanufacturing index. The index rose to 50.6 in August from 49.5 in July with readings above 50 indicate expansion.

The employment portion of the nonmanufacturing index fell to a reading of 45.4 in August from 47.1 in the previous month.

In the week ended Aug. 30, the advance figure for seasonally adjusted initial unemployment claims was 444,000, the U.S. Department of Labor reported. The four-week moving average was 438,000, an increase of 45,000, or 11.5% from the previous month's average 393,000. A Department of Labor program to locate those who may be eligible for jobless benefits may have contributed to the recent rise in these numbers.

Meanwhile, The Conference Board's U.S. leading index of economic indicators fell 0.7% in July, its most recent reading. It now stands at 101.2. The organization said weaknesses among leading indicators continue to be widespread.

However, one bright spot in the economic picture was the upward revision of second-quarter growth in real gross domestic product by the U.S. Department of Commerce on Aug. 28. Real GDP grew at a rate of 3.3% in the second quarter, according to the revision, up from an earlier estimate of only 1.9%.

Staffing Industry Analysts' perspective
Overall, there appeared little good forward-looking news from the economic indicators in August.

Both the manufacturing and non-manufacturing indices are at about 50, meaning flat performance, neither growth nor contraction. Jobless claims rose 11.5% from the previous month, but it's unclear whether the increase is real or simply reflects a new program on the part of the Department of Labor to aggressively seek applications for unemployment claims by locating those unemployed. More troubling is the consistently negative character of two forward-looking indices, the ECRI and the leading index.