Despite Layoffs and Hiring Freezes, The War for Talent is Not Over

According to a renowned study conducted by McKinsey Co., the most important corporate resource will be talent. It's also the resource in shortest supply, most of all in tough economic times. Are you ready to fight for your fair share?

An underlying fact in the American workplace is the shortage of qualified workers available to fill jobs. The principal business challenge of recruiting, retraining and inspiring talent continues, even in a slumping economy - just like in good times - as employees retire, quit, are terminated, find a new job, enroll in school or move away.

With layoffs the remedy for economic ills, it is often mistakenly thought that hiring is linked to economic growth. Statistically; however, economic growth makes up only about 5% of overall hiring actions in the U.S. Turnover is the overwhelming and primary reason for the majority of a company’s need to hire.

When headcount is monitored closely and managers must “made do” with less people, poorer performers are less tolerated and are “performance managed” out. As such, managers look for top performers from outside the company to ensure their teams are able to perform at high levels in challenging times.

At the same time, in a weak economy, top performers seek out opportunities they perceive as recession-proof causing employers to compete against rival employers.

Under a hiring freeze, overall headcount is targeted to remain at an established number. In these circumstances, when an employee leaves, managers still must make “backfill” hires to cover key positions.

After a period of reactionary cutting and freezing, hiring activity will return to a level of normalcy, business as usual. Then, employers will find that that they are lacking talent in a competitive job market—the market for “employed” top performers.

During times like this, employers will be flooded with candidates from which to choose. A nice change…or not? Hiring managers are well advised to proceed with caution as you contemplate hiring from the pool of available “active” candidates—recently available due to layoffs. 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.”

Direct Search Alliance is exclusively a direct recruiting firm, targeting passive candidates (we do not use ads or postings of any kind; we source top talent directly by researching the market and reaching out to working processionals to develop relationships and share connections). We are the Staffing Industry’s best resource, with multidisciplinary depth and breadth across Commercial and Professional segments, to source a top performer for your organization in 2009.

Season's Greetings

To our Client and Candidate Business Partners and Friends, all of us at Direct Search Alliance extend our sincerest best wishes for a happy Holiday Season.

May the New Year bring optimism, innovation, the coming together of talented people, support from colleagues and leadership, aspiration to overcome difficulties, and the power to make the best of trade and industry in the marketplaces we serve.

Teamwork brings everything together.

2009, a time to hope for peace and think green. A time to step it up in the face of adversity. A time to renew the spirit of service and go to work.

Employment Situation

It's official: the U.S. economy is in a recession. The Business Cycle Dating Committee of the National Bureau of Economic Research announced last week that, after six consecutive years of healthy growth, the U.S. economy peaked in December 2007. "The peak marks the end of the expansion that began in November 2001 and the beginning of a recession," the committee stated.

Employment is one of the primary measures NBER uses in tracking the economy, and it noted that U.S. payrolls peaked last December and have declined every month since.

Historically, temporary and contract employment drops precipitously during recessions. In the last recession, for example, staffing employment began to fall several months before the recession actually began. Over the course of a year and a half, the industry lost 29% of its jobs, according to the quarterly ASA staffing employment and sales survey. In year-to-year comparisons of employment data during that period, there were four consecutive quarters of double-digit rates of decline.

So far in this recession, the pattern has been different. Unlike with previous recessions, staffing employment remained relatively unchanged for 10 months. For example, staffing employment declined only 2.5% from the first quarter through the third quarter of this year, according to the ASA employment and sales survey. And the ASA Staffing Index, which measures changes in temporary and contact employment, had been flat for most of the year, until it started showing sustained weekly declines in late September.

The November employment situation report from the U.S. Bureau of Labor Statistics suggests that precipitous declines in employment may now be upon the staffing industry. How long those sharp declines persist will depend in part on how long the recession lasts.

This recession is already longer than the last one. The 2001 recession lasted eight months. The U.S. economy, according to NBER, is currently in the 12th month of contraction. Until now, there had been 10 recessions since World War II, and they lasted an average of 10 months each. The longest recession in that period, in 1981–82, lasted 16 months. Even if this recession becomes the longest since World War II, it is probably more than half over. Many economists predict that the economy will begin to pull out of this downturn by the middle of next year.

Steve Berchem
Staffing Week December 8, 2008
American Staffing Association

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