Jobs, the HR Hurdle, and Housing

http://wwwom/2009/10/11/jobs/11search.html?emc=eta1.nytimes.c

http://www.nytimes.com/2009/10/11/business/economy/11view.html?emc=eta1

At the recent G-20 summit in Pittsburgh, world leaders agreed that getting Americans to save and produce more while encouraging the Chinese to consume more is essential to placing the global economy on a stable footing. Well, you see, there it is - the solution was staring us in the face all along and it was in Pittsburgh! Who knew?

Most striking, on average, 6.3 unemployed job seekers are trying to fill each open position (Labor Department figures) in the U.S. economy. When the recession started in December, 2007, 1.7 people were competing for each open slot.

This makes it an employer's market right now, so the issue is what to do about it? The NY Times article attached addresses a perspective on that situation. And, they rightly point out that HR people, faced with hundreds of faceless online applications, have one main goal: to weed out as many people as they can. However; establishing personal contact with someone on the inside (sounds like networking to me) can help make a person's case. As the article says, job seekers who don't fit all the requirements (some of which are deliberately unrealistic) "need to go around the gatekeeper; they need to find another door." When someone that a hiring manager "knows" introduces them to a candidate, there's a trust link there that can make an opportunity happen. Many times, your personality will sell you when a two dimensional "career summary" won't. Having spent a career in human resources and, ultimately, with the responsibility for it as a part of larger responsibilities, I can endorse this perspective. I can also add that humility and the espoused ability to act as a team player are critical to creating a positive impression.

From December, 2007, when our friends the economists were busy telling us there was no recession (until, of course, they could retroactively declare one following two consecutive quarters of negative GDP growth), "housing" was what to watch and "housing" is what to watch now. We said then (and since) that, when the housing market rights itself (or, put differently, when the housing inventory overhang snugs up), the recession, and its most critical "lagging indicator" - JOBS - will come back. Robert Shiller (at Yale) created the Case-Shiller Home Price Index 20 years ago (Case is at Wellesley) to keep track of the housing market. Their just completed 2009 surveys (article attached) show the sharpest upturn that Shiller has ever seen! The suddenness of this shift surprised even Shiller. Good news like this has been hard to find. Certainly, it could be short term, but their own (Case-Shiller) home price index has stabilized. So, there is hope.

Whenever there is "hope", we must mention Nouriel Roubini, the Great Recession "predictor", who has the capacity to find the negative in anything. His most recent contrarian outlook (Reuters, 10/08/09) stated that U.S. housing prices may still fall more than 10%, killing an incipient recovery, as demand from first time buyers fades. He goes on to add that massive losses in commercial real estate loans will add to the problem, forcing banks to raise more capital. This was part of Roubini's presentation to the World Economic Forum.

In spite of all of this, Roubini sees a greater chance of a "U-shaped" recovery in developed economies, with a 20 to 25% chance of a "double-dip"(recession).

Catherine Rampell, writing in the Times "Economix" blog, has discovered the most recent unemployment numbers from across Europe with some striking "outliers". So, while the 27 member European Union is at 9.7%, both Spain and Latvia were nearly double that. If a "convoy" is only as fast as its slowest ship, one wonders where Europe's numbers are going.

So jobs, our lagging indicator here in the U.S., could come back consistently with housing, or Roubini could burst another hope by being right again (this time about commercial real estate). However; even Roubini sees, as indicated above, the possibility of light at the end of the tunnel. We have to drag him along kicking and screaming, but that's OK. Every 25 years Roubini will be right, as he was with his prediction in 2007. Meanwhile, we have hopeful signs.