Week End Roundup: July 31st

The latest unemployment and economic figures round out this month’s Week End Roundup.

1. Fed Survey, Economic Data Signal Recession Is Easing (Wall Street Journal)

The latest numbers from the U.S. Federal Reserve and the Commerce Department show that the steep drop in business-investment spending is bottoming out, indicating that the recession may be nearing an end. Several regions have reported an increase in hiring in the health care, technology, and manufacturing industries. However, some expect the pace of recovery to be slow given pressures on household incomes and wealth.

2. Unemployment Rises and Prices Fall in Europe (New York Times)

The unemployment rate for the 16 countries using the Euro rose to 9.4% in June, a 10 year high but less than the 9.7% unemployment forecasted by economists. Analysts attribute the lower-than-expected rate to state-funded programs, such as subsidies for part-time work and training programs.

3. Japanese Jobless at Six-Year Record (BBC)

Japan’s unemployment rate rose to a six year high to 5.5% in June, an increase of 0.3% since May. For every 100 people looking for a job, there are 43 positions open.

4. German Program Cuts Jobless Ranks, for Now (New York Times)

Germany’s unemployment rate remained stable at 8.2% in July, with 52,000 workers losing jobs last month. The resilience in the labor market indicates that Germany’s state-subsidized program of short working hours is averting layoffs (estimate of about 400,000 jobs). However, some economists argue that a relatively lower short-term jobless rate may mask long-term recovery concerns.

5. Silicon Valley's Jobleess Unplug From Tech (Wall Street Journal)

Out-of-work techies in the U.S. Silicon Valley are turning to jobs in other industries, such as clean air and health-care industries. The clean air industry expects funding on solar and wind power projects to increase, and the health care industry saw a hiring increase of 4.2% in the region. U.S. government funded programs, such as ProMatch, are retraining the unemployed to become skilled in these other industries.

Sluggish Hiring in Second Half

Despite recent economic news of “green shoots” in the economy and the slowing of GDP contraction, a recovery in the labor market appears to be nowhere in site. The number of organizations planning on trimming their labor force over the next 12 months has decreased substantially from earlier this year, which will help slow the increase in unemployment. However, organizations are not planning on increasing their hiring in the second half of the year. In a recent Roundtable quick poll we asked organizations how their hiring plans for the second half of 2009 compared to the first half of 2009. Over 70% of respondents indicated they planned on making no changes or decreasing hiring in the second half of 2009 compared to the first. Thus, while the number of workers entering unemployment shows signs of decreasing across the rest of the year, limited hiring will make it more difficult for the unemployed to find jobs, increasing the overall unemployment rate.

Week End Roundup: July 24th

In this week’s Week End Roundup: In the U.S., job cuts are outpacing the overall economic decline and economists do not expect hiring to improve until the second half of 2010; “green” jobs may increase in the near future as a result of the American Recovery and Reinvestment Act of 2009; the Bank of Canada is declaring the recession is essentially over but hiring is not expected to improve quite yet; and in South Korea, temp workers are feeling the brunt of the global downturn.

1. Job Cuts Outpace GDP Fall (Wall Street Journal)
At 9.5% unemployment rate, U.S. joblessness is outpacing the overall economy by about 1 to 1.5 percentage points higher than expected by economists. This disconnect could result in a number of scenarios, including a surge in productivity as companies find ways to increase output with fewer remaining workers or perhaps a continued deepening of the recession as workers struggle to squeeze their existing wages. Earlier this week, Federal Reserve’s Chairman Bernanke stated that although there are tentative signs of stabilization, the labor market has continued to weaken.

2. When, Oh When, Will Help Be Wanted? (New York Times)
U.S. economists are predicting that although the recession may improve by the end of this year, hiring may not improve until the second half of 2010. Health care and education will likely lead the way for job growth, with energy and oil industries, pipeline construction companies, computer design firms, and the federal government adding jobs as well.

3. Now Hiring: Green-Collar Workers (BusinessWeek)
The U.S. federal government is poised to inject billions of dollars into the economy under the American Recovery & Reinvestment Act of 2009. This stimulus package includes money for solar farms, wind turbines, electrical grid updates, mass transit, and the weatherizing and retrofitting of buildings, which could create about 1 to 1.5 million jobs.

4. Bank of Canada Says Recession Over, Growth Returning to Economy (The Canadian Press)
The Bank of Canada is declaring the recession is essentially over, saying Canada's economy will begin growing this summer after nine months of stagnation and lead most of the industrialized world next year. However, experts say the renewed growth after three quarters of economic shrinkage won't lead to job growth until much later, when companies regain confidence and begin hiring again.

5. In South Korea, a New Workers’ Grievance (New York Times)
A recent labor law passed in South Korea is requiring employers to add temp workers who have held a job for more than two years at a company to their permanent workforce. This new law is encouraging employers to dismiss temp workers, adding to the increasing number of temp cuts. Temp workers make up about 33% of the country’s wage earners and a large portion of the laid off workers.

Finding the Right Employee Referrals in a Downturn

Despite their general effectiveness, it is easy to go wrong with employee referrals in a down economy. Most employees have friends and family who are looking for jobs, and they feel obligated to refer them even if they are unqualified for your positions. When this happens, recruiters lose valuable time providing a high-touch recruiting process for unqualified referrals, and the referring employees and referrals themselves are dissatisfied when a hire does not result.

Consider a two-pronged approach to getting the benefits back into your employee referral program:

• Target referrals for critical positions (for instance, promote referrals at appropriate business unit meetings among employees in critical positions)
• Dissuade unqualified referrals (for instance, explain the downsides of referring unqualified candidates in referral messaging to your employees)

Job Seekers Should Commiserate with Recruiting’s Pain

Job seekers are aplenty these days, and in their search for work, some may forget that many recruiting departments are knee-deep in applications. A recent article in the New York Times, quoting our latest Roundtable research (members only), speaks to the application volume pain that many of us in Recruiting are currently feeling. The article also offers helpful suggestions to job seekers on how they can go beyond merely applying online to stand out amongst other applicants.

Although for once popular media is commiserating with Recruiting, let’s make sure we do not forget that candidate care still matters, even in a “buyer’s market.”

Week End Roundup: July 17th

In this week’s Week End Roundup: Unemployment in developed countries is estimated to reach 30 million; UK jobless rates for the most recent quarter is the highest on record; Canadian business outlook is improving; organizations are using delayed retirements to their advantage; and the unemployed are taking a summer break from job search but employers are moving full speed to hire for critical positions.

1. Developed Countries Seen Losing 30-million Jobs Between 2007-’10 (Financial Post)

According to the Organization for Economic Cooperation, developed countries are expected to lose about 30 million jobs from the end of 2007 through to 2010. With labor markets typically lagging economic recovery, as employers try to squeeze productivity out of the remaining workers, unemployment is expected to remain high.

2. Record Rise in UK Jobless Total (BBC)

The Office of National Statistics reported UK unemployment rose 281,000 to 2.38 million in the three months to May, increasing the jobless rate to 7.6%. This quarterly rise in unemployment is a record since the International Labor Organization measure began in 1971. Young workers – 24 years or younger – are among the hardest hit by unemployment with 726,000 out of work. The number of people unemployed for more than a year rose to an 11-year high to 528,000.

3. Bosses Across Canada Readying for a Recovery (Financial Post)

According to the Canadian central bank’s Summer Business Outlook, Canadian business sentiment has improved dramatically since Fall and Winter of last year. 61% of businesses are expecting an increase in sales and 39% are expecting an increase hiring over the next 12 months. Hiring intentions also improved in all sectors.

4. Delayed Retirements: Boon and Bane for Firms (Wall Street Journal)

Delayed retirement by baby boomers could mean good news for organizations worried about “brain drain.” Employers are using this opportunity to plan more strategically in retraining or transferring knowledge to new workers. However, some organizations are struggling to shed workers or worrying that delayed retirement may limit opportunities for younger workers. To bridge the skills gap between older and younger workers and to address the limit in upward mobility, employers are developing internal mentorship programs to allow employees to share expertise and skills.

5. Summertime, and the Job Hunting is Crucial (Globe and Mail)

With jobs scarce and summertime in full swing for the northern hemisphere, some unemployed workers have opted to take a hiatus from actively searching for jobs to enjoy the season. However, with competition for jobs increasing, this delay in job search could be detrimental for unemployed workers that are taking a break from job search. In Canada, employers are most actively recruiting for executives and middle management in certain industries, such as oil and gas, health care, government, social assistance, mining, and pharmaceuticals.

Helping Recruiters Source Smarter

No matter how hard recruiting executives work at the strategic level to focus resources on more effective sourcing channels, in the end recruiters are ultimately the ones who are doing the sourcing.

Recruiters need to follow high-ROI sourcing practices to gain the cost and quality benefits to sourcing smarter. This includes having access to data that shows how positions have (truthfully) been filled in the past, as well as new trends and tools that could potentiall make sourcing easier in the future (e.g., new LinkedIn Recruiter tool). Do recruiters have insight into both the history and future of sourcing at your organization?

Migrating from Ineffective Sourcing Channels

Following up from yesterday’s post about sourcing channels, it sounds easy enough to identify sourcing channels that aren’t serving us well. The harder part is making the decision whether to migrate from the channel completely for a given position family. This is an especially timely decision given that attraction and sourcing activities take up more than a third of the overall Recruiting budget when cost efficiency is more important than ever.

In general, use two-part test to guide your decisions:

1. Is the channel performing at least at an average level on quality-, speed-, and cost-related measures?
2. Does the channel have potential for improvement across any of these measures?

If you answer “no” to both questions, discontinuing use of the sourcing channel may be a smart decision.

From Ineffective to Destructive

Most recruiting organizations find more than 25% of their sourcing channels to be less than effective. With the active labor market today even more aggressive, recruiters are saying that ineffective sourcing channels can easily become pain points for application overload.

The best sourcing channels in today’s labor market are those that allow you to target your outreach to the highest proportion of high-quality candidates in a cost-effective manner. To pinpoint ineffective channels, add a quality-, speed-, or cost-related sourcing channel metric to track in your scorecard. Alternatively, require vendors to provide results-oriented reporting; for example, see the new pricing model among some major job boards.

Week End Roundup – July 10th

In this week’s Week End Roundup: Australian and Canadian unemployment rates increased to 5.8% and 8.7%, respectively; unemployed white-collar Koreans turn to blue-collar jobs; U.S. government passes law requiring federal contractors to use the E-Verify system for new hires; and the number of job postings on major job boards fall sharply as budgets are cut and Web 2.0 technologies offer competitive alternatives.

1. Australian Unemployment Increases (BBC)
Australia’s unemployment rate increased to 5.8%, a 6-year high. Jobless figures last month fell by 21,400. This unemployment rate is up from 5.7% in May but less than originally forecasted by analysts.

2. Canada to Lose 10,000 Jobs This Summer (Financial Post)
The unemployment rate in Canada rose to an 11-year high to 8.7%, with 35,000 jobs lost last month. Economists do not expect the labor market to improve until the fourth quarter of this year or 2010, and expect the goods and services industries to continue to see weaker activity. The Canadian government forecasts another 100,000 jobs to be lost this summer.

3. With Wounded Pride, Unemployed Koreans Quietly Turn to Manual Labor (New York Times)
In South Korea, where downward mobility has been commonplace, white-collar workers who have lost their jobs are turning to physically demanding jobs or traditional manual labor (e.g., farming, fishing) that pay relatively well due to chronic labor shortages within these occupations. In this competitive, status conscious society, however, these kinds of “demotions” have been particularly shameful to workers, and some have opted to hide their professions from family and friends. At 3.8% unemployment, South Korea’s rate is low compared to other major economies around the world, but high for this Asian nation.

4. US Targets Contractors Hiring Illegals (The Wall Street Journal)
The U.S. government is implementing a program that requires federal contractors to check whether new hires are allowed to work in the U.S. using the government’s E-Verify system, which compares names and Social Security numbers with the government database. Employers may initially have to verify the status of their current employees as well through the system. This new program, which goes into effect on September 8, has been unpopular in the business community, and opposition has argued that the government's E-Verify system is flawed.

5. Enough to Make Monster Tremble (Business Week)
Recruiting organizations are reducing or eradicating big job boards in the face of budget cuts. While Web traffic to major job boards have gone up due to increasing unemployment, job listings amongst these job boards have decreased nearly 40% since December 2007 to 34% as of May of this year. Recruiters have instead turned to Twitter and LinkedIn; the latter professional social network has revamped its recruiter products into a suite called “Talent Advantage,” which costs about $7,000 per user.

For more resources to help identify the Web 2.0 technologies most effective for recruiting, check out the Roundtable’s Web 2.0 Technologies for Recruiting Topic Center (members only) and read more about how one organization builds interactive talent pipelines (members only) to proactively cultivate relationships with candidates in a scalable way.

Unemployed Candidates Aren’t as Desperate as We Might Think

With news reports of unemployed candidates bombarding career fairs and ever increasing application volume it’s not surprising that many perceive today’s candidates as “desperate.” While there are definitely some desperate unemployed candidates, the vast majority are looking for a job that fits their job interests with comparable pay to their prior job. In fact, in our recent global labor market survey only one-third of the unemployed would take a job with a meager 5% pay decrease (from their prior job) and less than 10% would take a job that wasn’t aligned with their job interests. While the recession has shifted some power in the labor market from candidates to organizations, we would be remiss in assuming we can press our advantage with the labor market too much.

Economic Uncertainty Makes Recruiting Passive Talent Harder

Today’s passive talent is harder to dislodge than they were just three years ago. A huge hurdle for recruiting given the importance many organizations place on attracting passive talent. Job offers that used to pique their interest, like salary increases and better managers, are less appealing in today’s uncertain economic environment. In our recent global labor market survey we found that only a meager 21% of passive prospective candidates would be likely to accept a job that offered a 15% salary increase. This represents a decline of over 40% from 2006, when over 35% of passive prospective candidates would be likely to take a job with a significant increase in pay. Recruiters trying to attract passive talent will need a lot more than a small salary bump to get the attention of today’s passive talent pool. After all, no one wants to be the "last in-first out."

Impact of the Economy on the Labor Force Varies by Talent Segment

The recession has dramatically impacted the labor force as a whole, significantly increasing the overall unemployment rates and scaring employed potential candidates out of the job market. Despite increased unemployment, many organizations are still struggling to fill critical positions in large part because for many talent segments, regions, and industries unemployment still remains relatively low. For example, in the US the unemployment rate for participants with a bachelor’s degree or higher is only 4.7% and the unemployment rate in the Utilities industry is only 4.2%. The effect of the recession on labor force segments has been far from equal. Consequently, many critical positions still remain difficult to fill despite high unemployment.

Despite Weak Labor Markets Quality of Hire and Quality of Slate are Not Improving

Despite unemployment rates of 9.5% in the US and near 9.0% in the 27 nation EU, organizations are not hiring better candidates. Using the Roundtable’s ongoing survey of hiring managers, the Recruiting Effectiveness Dashboard (RED), we compare quality of hire and slate ratings between Q1 2008 and Q1 2009. The increase in talent availability is not translating into better quality- quality of slate increased a meager 3% and quality of hire remained statistically unchanged with an increase of only 0.1% year over year. Thus, despite the looser labor market we are failing to get better results.

Economic Uncertainty, and What it Means for Attracting Talent

As recent economic news from around the world suggests, there continues to be confusing signals to the market as to whether or not recovery is near. Nonetheless, this challenging economic context has reduced aggregate talent demand across the globe as evidenced by increasing unemployment rates and fewer job postings. Recruiting teams are feeling the pain acutely—lower budgets and smaller teams remain yet hiring still exists mainly for challenging, difficult-to-fill positions. With talent supply exceeding demand, does that mean it’s easier to attract talent than before?

The challenge of attracting critical talent in today’s uncertain economy is the focus of our recent research initiative, which we first blogged about last month. Across the next several weeks, we will introduce new insights every day from this latest research. Stay tuned, and visit the Recruiting Roundup often to get your daily dose of insights.

Week End Roundup - July 2nd

This week’s Week End Roundup: Job loss in the U.S. and Europe quickened compared to the previous month; Australian employers are hesitant to hire in the IT space; the U.S. government is cracking down on illegal workers and holding employers responsible; and U.S. employers evaluate their hiring and promotion assessments after the recent Supreme Court ruling in an employment-discrimination lawsuit.

Note: Our “Week in Review" has been renamed to the “Week End Roundup" as of today. We look forward to sharing with you weekly employment and recruiting-related news from around the world in these posts.

1. Job Losses Rise in June as Unemployment Reaches 9.5% (New York Times)

The latest U.S. Labor Department data shows that job loss in the U.S. quickened in June after slowing in May. The U.S. economy cut 467,000 jobs last month, sharply higher than the originally forecasted number of 365,000 jobs. The unemployment rate rose to 9.5%, which totals to approximately 14.7 million unemployed people in the U.S.

2. Unemployment Up Again in Eurozone (BBC)
The unemployment rate in the Eurozone rose to 9.5% in June, and in the 27-nation European Union, jobless rate rose to 8.9%. Economists believe the unemployment rate could have been higher, if countries, such as Germany and Netherlands, had not instituted short-term working schemes. These schemes are similar to the U.S. work-sharing programs, as discussed in a New York Times article that we highlighted last month.

3. Tech Employment Pool Drying Up (Australian IT)

The Australian IT sector is hesitant to hire, a recent survey by Michael Page (search firm) shows. Demand for IT workers have slowed, and many employers have either cancelled or put on hold new IT projects. However, critical positions, such as technical specialists for statistical analysis software and enterprise resource planning, remain in demand.

4. U.S. News: Immigration Crackdown Shifts Focus to Employers (Wall Street Journal)
This week, the U.S. Immigration and Customs Enforcement unit announced a crackdown on hundreds of companies that were suspected of employing illegal immigrants. It will be auditing 652 U.S. companies to verify whether their employees are eligible to work. It is not clear at this point what the repercussions will be or how severe.

5. Job-Test Ruling Cheers Employers (Wall Street Journal)
Monday’s U.S. Supreme Court decision in the employment-discrimination case is putting the spotlight on employer assessments used for hiring and promotions. Some employers are considering using more assessments to make hiring or promotion selection decisions more fairly. Others that already use assessments are scrutinizing these tests even further to ensure they do not discriminate against one race or ethnicity. Lawyers and execs believe that this ruling will have a greater impact on how federal employers recruit than on private employers, citing that private employers “are less likely to use a test as the single, or predominant, criterion for a job or promotion.” There has been no definitive guidance as to how employers should approach assessment tests.

For best-in-class approaches to screening, selection, and assessment, check out the Roundtable’s Screening, Assessment, and Selection topic center (members only).

Rethinking Recruiting's Role: Succession Management

Our conversations with recruiting executives, supported by a recent Deloitte inquiry, indicate that the world's largest organizations are increasingly focused on developing strong leadership pipelines from within. This is not a huge surprise given the array of benefits this priority provides in the current economy.

Recruiting should play a strategic role in succession management—if not to decrease the risk of losing relevance in the eyes of the business, then to provide much-needed expertise to partners in talent management.

Too often, though, succession management is an unfamiliar topic for many recruiters. With this in mind, we’ve outlined four key opportunities for Recruiting to contribute to the success of succession efforts. To do this, we’ll use a frame created by the Corporate Leadership Council (a sister program of the Recruiting Roundtable), which provides a nice primer for succession management (members only)that we can use to pinpoint opportunities for Recruiting to play a larger role.

According to the Council, effective succession management achieves the following:

Safeguards Business-Critical Capabilities: Not all executives, nor all roles, are created equal. Succession management helps identify those capabilities most critical to business success and most scarce in the labor market, and prioritizes succession risks and interventions accordingly.

• What This Means for Recruiting: You provide a critical input with in-depth knowledge of the executive labor market. Too often, HR teams make faulty assumptions about the external abundance (or scarcity) of particular types of talent. In turn, our organizations under- or over-invest in internal development for these roles. Make sure your expertise and advice is heard.

Accelerates Executive Development: While organizations realize the importance of development, they often fail to act on development needs. Succession management helps identify and act on development areas, and it provides rising executives with diverse experiences to ensure successors are prepared to assume leadership roles.

• What This Means for Recruiting: For external hires, you are often the first to identify specific development needs and preferences. Make sure the information you gathered during the selection phase is carried into the development processes for executive hires. For internal hiring, make sure that you articulate the “developmental value” of placing a person into a specific job. Recruiting is uniquely positioned to ensure that placements are productive for the organization and development-focused for the individual.

Overcomes New Hire Derailers: While externally hired executives often bring new expertise and leadership to the organization, they also face a greater risk of failing. Through succession planning, you can understand new executives’ specific areas for development, provide feedback early and frequently, and ensure accountability for new hires’ success to prevent executive derailment.

• What This Means for Recruiting: This may be the area where your input is most significant. Continue your relationship with external executive hires well into their first few years with your organization. You can play a key role in making sure your hires are successful even after they start. Members, click here for our findings on the most powerful onboarding activities.

Deploys Talent Against Strategic Priorities: Succession management efforts are not discrete events, but rather part of an integrated system for managing talent in an organization. HR organizations should base succession decisions on the evolving needs of the company, and align talent capabilities and executive roles with strategic priorities.

• What This Means for Recruiting: Your recruiting efforts should reflect the evolving needs of the business. Meet with business leaders regularly to ensure your work provides forward-looking value to the succession plan. Challenge business leaders whether their recruitment efforts target the talent profiles needed in the future (rather than “cloning” the profiles of today’s leadership team).