Market Conditions Change - Good Advice Doesn't

SPECIAL REPORT

'Greatest economic challenge'
Obama sets sights on economy - vows to confront global financial crisis
NEW YORK (CNNMoney.com) -- President-elect Barack Obama said Friday that the United States is "facing the greatest economic challenge of our lifetime."

The economy ranked as the top concern among voters. The issue...Jobs.

Layoffs and hiring freezes announced by Companies in the broader economy can ripple throughout the Staffing Industry by causing management to cut back on their costs by "making do" with less staff, and this can make it harder for these companies to maintain market share, fueling the ongoing decline in revenues and profits.

Given the weak labor market, only the most skilled, talented and motivated employees will uncover and leverage opportunities to contribute. The economy may be weak, but it is not without prospects.

Staffing Industry employers might be well served by taking a hard look at the capabilities of their employees and how they are deployed. To preserve a place in the market and prosper for longer term benefit, only the best and brightest should be "on the team," so to speak, in revenue generating assignments.

Tolerating mediocrity is risky. Finding talent is difficult with the unemployment rate increasing. As the numbers of candidates on the market increases it becomes increasingly difficult to “separate the wheat from the chaff” 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. 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.”

We can help make an investment in finding and hiring talent produce sustaining, material results. Recognizing that in times like these, cost is a factor, we are offering cost-savings options to initiate the search for top talent.

1. Stretch Your Budget with Extended Payment Terms
Have the option to make that critical hire in the near-term and spread payment over time. This "layaway" plan allows you to manage the impact on your budget and begin to realize a return on the investment in talent before making the full investment. Pay in 3-equal payments after the start date: 10-days, 45-days and 90-days.
Extended payment terms do not apply with any other discounts.

2. Take advantage of our Search Sale
Make a hire and receive 25% off the search fee. Even in a challenging economic market, customer-facing, revenue-generating and leadership talent are essential. If you have to make that one great hire, make it at a deep discount.
25% off applies only with standard payment terms of net 10-days.

3. Choose the Best of Both Time & Money
Focus on your core business and let us find you a top performer. Take a 15% discount off the search fee, pay only half the fee 10-days after the start and hold on to the balance for 60-days. Manage your cash and benefit from revenue-producing productivity.

Direct Search Alliance is a Search and Talent Consultancy specializing in the Staffing, Professional Services and Outsourcing Industries. I invite you to visit our website and blog to learn more about our company. Click the links below to download online brochures.

The upside of recession

Instead of cutting back and cowering, why not see it as an opportunity?

COMMENTARY
By G. Michael Maddock and Raphael Louis Vitón
BusinessWeek.com
Tues., March. 18, 2008

Pop quiz, hot shot: What do MTV, Trader Joe's, and the iPod have in common? Yes, of course, they're all now ubiquitous and make our lives much more agreeable.

But to us, the most interesting thing about all three is that these great brands were born during recessions. (Trader Joe's: 1958; MTV: 1981; iPod: 2001, if you are scoring at home.)

And therein lies a point everyone seems to be forgetting in the midst of the current economic slowdown. If handled correctly, a downturn can be a good thing for your company. It can give you the opportunity — and the funds — to innovate and get a substantial leg up on the competition. But only if handled correctly.

It is never going to happen if your company — or your department — goes into the recession saying, "We have to tighten our proverbial belts; let's cut spending 22.73% across the board." People are going to be demoralized. And even worse, that is what most firms are doing, and you are never going to gain a competitive edge doing the same thing as everyone else.

A catalyst for innovation
Cutting across the board is the coward's way of dealing with a downturn. It assures that no one is going to yell — how could anyone possibly object to sharing the pain equally — and it gives the timid a built-in excuse to fail. ("Gee, I know no one liked our new product, but they slashed our budget 22.73% right before launch, so, it wasn't my fault.")

But suppose you use the recession not as an excuse or a reason for hiding under your desk but rather as a catalyst for innovation? Instead of cutting everything by 22.73%, why not see the downturn as a chance to whack 90% (or the whole darn thing) out of stuff that isn't working well?

Cutting off funding to your laggards would free up a lot of money to back the one, or possibly two, big ideas you have been working on, ideas that have a chance to become breakthrough brands. If you want to be less aggressive, you could place more resources behind the existing ideas/programs/products that are already working well.

A two-pronged approach
Two key assumptions are necessary to make this possible: First, you should already have in a place a solid strategy, one that has identified your company's competitive advantage, so you know where to place your relatively big bets. If you don't have a sound strategy, you are at a huge disadvantage. And two, it assumes you have the intestinal fortitude to react to the recession in a way that is not like everyone else.

It is never going to happen if your company — or your department — goes into the recession saying, "We have to tighten our proverbial belts; let's cut spending 22.73% across the board." People are going to be demoralized. And even worse, that is what most firms are doing, and you are never going to gain a competitive edge doing the same thing as everyone else.

If you are the chief executive officer, you can make this gutsy call on your own — assuming, of course, you get the board to go along. The rest of us probably need to take a two-pronged approach.

First, when the word comes down from on high that you need to belt-tighten, go through the usual drill. Explain you probably can fly everyone in for a meeting three times a year instead of four, and why you can get by with 12 people in the department as opposed to 13.

Increase advertising while others cut back
But then go to your boss, and say, "Instead of dealing with the need to cut like everyone else, why don't we use these hard times as an opportunity," and then outline how you plan to create an MTV, a Trader Joe's, or an iPod of your own, complete with an aggressive launch timeline to ensure it is firmly established in the marketplace when the recession ends.

As Harvard Business School professor John A. Quelch noted recently, "It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times."

Time to attack
You can also point out that what you are advocating will leave your company perfectly positioned once the recession ends. While your competition is withdrawing, you will be charging ahead, taking market share. Maybe neither argument will carry the day. But if it does nothing else, this kind of innovative thinking gives the boss another reason to keep you around, no small thing when the phrase "reducing headcount" is in the air.

Recessions by definition are temporary. Great companies and great executives don't abandon their growth strategies in light of temporary setbacks. They attack aggressively, while everyone else is pulling back.

G. Michael Maddock is founding partner, and Raphael Louis Vitón is president, of Maddock Douglas, a company that invents, brands, and markets products "for companies driven by innovation."

Copyright © 2008 The McGraw-Hill Companies Inc. All rights reserved.

Barack Obama Becomes the 44th U.S. President

The economy ranked as the top concern among voters who cast their ballot for Barack Obama, elected President Tuesday night.

The issue...Jobs.

A total of $100,032,604 was spent to broadcast 52 ads related to the presidential campaign on the issue of jobs from April 3 to Oct. 27, 2008, according to statistics compiled by Campaign Media Analysis Group, which tracks political advertising expenditures.

Layoffs and hiring freezes announced by Companies in the broader economy can ripple throughout the Staffing Industry by causing management to cut back on their costs by "making do" with less staff, and this can make it harder for these companies to maintain market share, fueling the ongoing decline in revenues and profits.

Given the weak labor market, only the most skilled, talented and motivated employees will uncover, discover and leverage opportunities to contribute. The economy may be weak, but it is not without prospects.

Staffing Industry employers might be well served by taking a hard look at the capabilities of their employees and how they are deployed. To preserve a place in the market and prosper for longer term benefit, only the best and brightest should be "on the team," so to speak, in revenue generating assignments. Tolerating mediocrity is risky. Finding talent is difficult with the unemployment rate increasing.

We can help make an investment in finding and hiring talent produce sustaining, material results.

Direct Search Alliance was established by Staffing Industry leaders to provide an alliance between America's best employers and executive, management and professional people already successful in their role and area of specialization.

Our organizational mission is to represent, serve and inspire talented individuals to nurture and propel business performance.

Selling in a Down Economy

You may need hunters rather than farmers.

Here are a few thoughts for growing your sales organization in these challenging times.

First, stop accepting excuses for lack of performance… even if they have a basis in truth. It’s always easier for someone to blame the economy, the competition, the lousy sales leads, or even their own company than it is to accept responsibility. The fact is that successful people find a way to succeed regardless of the circumstances. Hardly anybody actually likes to prospect, but hungry successful salespeople who need to generate revenue will become prospecting animals. Are your salespeople making enough calls to generate the business you need? Are they doing everything possible to succeed?

In better times, many salespeople focused on telling prospects about the benefits and advantages of their company’s products or services. They sent lots of proposals and followed up consistently. Business was good. But as soon as the economy slowed, this approach stopped working. The reaction was often to cut price and to add extra value (often by throwing in extra functionality) in an attempt to close deals. Margins eroded and the sales pipeline slowed to a trickle. The very salespeople who seemed like Supermen in the good times now act like kryptonite is in their office.

There are two basic questions that need to be addressed in order to turn around a languishing sales organization.

First: do you have the right people?

Many successful “salespeople” really were more like account managers who farmed their existing client base very effectively. These “farmers” are patient and will say, “Wait until the economy turns around”, or “Nobody is buying right now”. Salespeople who are excellent account managers are not necessarily willing and able to prospect for new business (i.e. become hunters). Find those who have both a strong desire for success and a commitment to do whatever it takes, then get rid of the rest!

The second question is: do your people have the abilities and skills to compete in a tough selling environment?

Many sales organizations, especially those selling technology during the boom times, failed to develop the selling skills of their sales team. Some salespeople were functioning too much as order takers and simply didn’t need to prospect in order to meet their targets. Marketing generated an abundance of leads so the biggest challenge salespeople faced was simply following-up on what was handed to them. Everything was wonderful until the economy took a turn for the worse. Many formerly successful salespeople simply don’t have the skills to compete in this new economy, or they aren’t willing to do what it will take to be successful.

In order to answer the above two questions, consider evaluating your existing organization using some sort of objective assessment methodology. Like any good change process, establishing the current condition is essential in determining an action plan for future change. Knowing strengths and weaknesses of the sales team allows for an action plan to be developed. It is entirely possible that some on the team simply will not be effective in this new economy, so making personnel changes may be the first step. If training is needed, it should be targeted to address those issues that will have the greatest return on investment. For instance, if salespeople are too easily cutting price, then some intensive focus on a good budget step would be prudent. If they send out lots of proposals but don’t close enough, developing their questioning skills and closing strategies would be appropriate.

Additionally, a growing organization should look to systematize the selling process. Determine your best sales practices and then make sure the whole organization consistently follows those practices. What are the best ways to find new leads? How do they get qualified quickly? How are budgets determined? When and how will the decision be made? Answer all these questions BEFORE you spend a fortune on software. Contact management, sales automation, and customer relationship management (CRM) software is abundant and readily available for virtually any size sales organization. Unfortunately, software alone will not fix a weak sales process or a weak sales team.

Lastly, take the time and energy to hire salespeople who not only can sell, but WILL SELL for your company. When looking at those impressive resumes be sure to ask lots of questions about how much prospecting the salesperson did in the past. Many top salespeople inherited accounts and grew an existing base. If that’s what you’re offering them, then they may be a good fit, but don’t expect this former superstar to necessarily cold call and prospect consistently for new business. Again, use good evaluation tools to screen for those attributes that will insure success in your organization. Never hire based strictly upon your “gut”.

Put it all together and you’ll probably find that selling in a down economy really isn’t much different than selling in a good economy. Hire the right people, provide them with great training and tools, and don’t accept excuses. So when the economy picks up again don’t forget the fundamentals. Winners succeed because they are prepared more than others and are committed to be the best. Good Selling!

-- by Kevin Hallenbeck

Bringing it Back

Intuitively, you know that something must be done to offset the steep decline in revenues as demand lessens for new or interim staff. You want to do something, but are confounded as to what to do - it seems insurmountable and that any one thing won't be enough to turn circumstances around. Thus far, staring at the computer screen hasn't worked. Talking about how bad is the economy hasn't either, although it makes for a good excuse and makes one feel nervously better.

Confidence comes with action and it is an amalgamation of doing basic "right things" that work together to make business come around.

INTERVIEWS
it seems silly to interview when you have more candidates than jobs, but continue to do so in numbers and dig in a little deeper--where has the candidate interviewed, with whom have they been out on assignment, what employers have contacted them, who do they report to and to whom does their boss report? These are names, names that might be hiring. In times like these when the instance of hiring or needing supplemental staffing is less common, you must increase the number of chances to sell by increasing the number of potential hiring authorities on your prospect list. When you use interviewing as a means to gather market intelligence, you can, at the same time, cross reference the name to the profile of the candidate which can be used to target your marketing efforts on a go forward basis.

Going back to the files and pulling old applications is a target-rich source for names that were passed over when business was too brisk to pay attention to the details.

REFERENCES
Everyone hates to check references - they seem like an annoying obstacle to placing a candidate. But in reality, every professional reference is not only another name, but a person you have a good reason to engage in conversation. Grab up a pile of unchecked references and get busy dialing. Your "connection" ratio will increase multi fold when you are calling about a professional reference. It is an easy transition to turn a call like this to the business of learning about the individual, their organization's needs and prospective opportunities. Go back through old checked references, and voila...more names.

MARKETING CANDIDATES
Once you have a long list of prospective hiring authority names, cross referenced with the kinds of skill classifications that they hire, you can market great candidates on a more macro, but targeted, basis and reach a large number of prospective clients. Do a thorough job writing a profile of the candidate to market and what they can offer an employer, along with a compelling and persuasive overview of your experience and your firm's area of specialization. You will find that if you "hit the bulls eye," you will generate a business opportunity and if you present yourself in the right light, you might generate interest in your services for an alternate opportunity.

The adage - "It is a numbers game" has never been more true. The survivors of this downturn are the individuals and companies who leverage high volumes of data with high levels of activity to touch prospects on a frequency that "makes your own luck" by increasing your chances of being "in the right place and the right time."

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.