Mr. Feeney

Human Resources, Recruitment & Training

Bad Economy: Good News for Employers?

By Paul Feeney, President, Sanford Rose Associates

The best advice: Don't assume anything yet.

Unemployment will vary from industry to industry, from region to region and from one occupational discipline to another. Moreover, in many cases it will be short-lived. The main reason that there will be any increase in unemployment figures at all is that many laid-off workers will lack the skills to fill the new positions and/or will live in the wrong place to take advantage of them. Thus some jobs will go begging, for lack of people to fill them.

Getting the Corporation's Foot off the Brake

Here's the bottom line: There are not legions of highly qualified, increasingly inexpensive job candidates out there who are out of work and anxious to join your organization.

Virtually all Sanford Rose Associates' offices continue to report higher demand and fierce competition for highly qualified candidates in recent months. Demand remains strong in such diverse business roles as marketing, engineering, knowledge management and general management. It can be argued that, in times of corporate belt-tightening, it is more important than ever to attract the very best talent for those critical positions that can make or break a company's performance. Since leaders and visionaries are always in short supply, don't look for them in the unemployment line; they are jealously guarded by their current employers and will need to be wooed away by skilled search consultants bearing exceptional offers from clients they represent.

One trend that economics can't change is the relentless march of Baby Boomers past the Age 50 milestone. By the year 2005, your pool of workers to replace them will have shrunk eleven percent from the supply in 1995. Unless new job creation grinds to a halt, there will be more open positions chasing fewer job candidates - and that's happening right now.

Smart employers will re-think their attitudes toward older, part-time and/or virtual employees and will actively recruit alumni, instead of banning them for life. Companies also will need to address employee retention issues in much more creative ways; what is the sense of the average manager changing employers every 2.3 years? And when companies look outside for people, they must come to terms with the fact that it's still a seller's market for candidates - meaning that prompt offers with competitive compensation packages are still required.

The Blessing and Curse of Instant Knowledge

During the last recession of 1989-1992, layoffs were a lagging economic indicator - with employers continuing to lay off workers up to a year after the economy had reversed its course. Today, the increased ability of all but the most dull-witted organizations to process and interpret scads of data has led to almost instantaneous employment decisions.

Thus, if the Australian subsidiary has a poor February, this is known at corporate headquarters by the second or third of March and analyzed by sophisticated computer programs (was it the economy, unexpected weather, expected seasonality, interest rates, currency translation, sales gains by competitors or what?). Headquarters then has the option to take immediate corrective action - including reducing the head count in Australia.

Layoffs hence have become a leading indicator in just one short decade. The term "layoff" still means what it says in factory circles; you can lay off a worker and then bring him or her back when orders improve. Managers and professionals, however, are rarely idled. They are terminated. Out of work, they find other work. They aren't waiting to be recalled.

So here's the rub: Fast on its feet, our hypothetical company terminates 53 salaried employees at the Australian subsidiary. Two months later, the Australian business takes a dramatic turn for the better. It's time to get back to full strength, or at least fighting weight (maybe 30 new hires instead of 53). It will take longer to find the replacements (not to mention train them) than it did to fire their predecessors.

No One Size Fits All

In general, the best maxim is "the more drastic the illness, the more drastic the remedy." Fortunately, the average company today is not in financial peril; consequently, most do not need to engage in widespread layoffs or cancel hiring decisions - especially for critical position openings. Unless sales have shriveled or the strategic plan has proved to be a bust, it's unlikely that normal employment patterns need to be changed; they are difficult and time-consuming to put back together.

Aggressive hiring of the best and brightest during periods of economic uncertainty may even pay two special dividends. One is the opportunity to build market share at a time when weaker-willed competitors are losing theirs. The other is the security of knowing you are way ahead of the curve when the economy rebounds and demand for people heats up.

Paul Feeney is President of Sanford Rose Associates, an Executive Search Firm. Sanford Rose Associates was founded in 1959, is a full-service executive search organization conducting retained and contingency searches through a network of 60+ offices worldwide devotes its practice to all areas of finance, accounting, general management, operations, technology, management consulting and project management for national and international searches. Paul has over 18 years of executive search management and corporate recruiting experience while working in New York, London and Prague. Mr. Feeney can be contacted at 973-492-5424 or pffeeney@sanfordrose.com Extended Bio...

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