http://www.msnbc.msn.com/id/39604781/ns/business-careers/
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"Advice is seldom welcome, and those who need it most like it the least." (Samuel Johnson)
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HR professionals have a name for the highly sought but elusive job candidate whose skills and experiences precisely match an employer's needs: the "purple squirrel."
What's happened with the aftermath of the Great Recession is that the process of hiring back staff in the "average" organization has been delayed by both software/computer upgrades that allow companies (especially manufacturers) to do more with less people, and, the predisposition by employers to fill "open" positions with upgraded personnel (those that may have broader skills and/or certifications).
All this makes "productivity" (as measured by output per hour worked) go up: 3.5% last year. This is certainly laudible but it is brought about by a slowness to rehire that, in many cases, puts a strain on those left behind after layoffs. Only 49% of people laid off from 2007 to 2009 were re-employed by January 2010.
Companies are complaining that they can't find qualified people. Well, if those employers have now combined business analyst and systems analyst positions into one job, for example, the pool of people who can qualify for that "opening" substantially reduces. So, those "openings" are now there but info tech companies now want "dual threat" people.
So, the statistic for the number of unemployed Americans, on average, competing for each opening is still high at 4.6 to 1. Prior to the recession, it was 1.8 to 1.
In a new survey released yesterday, 46 economists forecast that the economy will grow this year and next at a slower pace than previously thought (National Association of Business Economists). The new forecast predicted economic growth to be 2.6% for 2010 and 2011. That's down from it's May forecast of 3.2%. During that period, these same economists don't see the official unemployment rate going much below 9.2% and they don't see home prices rising much.
While this forecast is not considered "optimistic," it does not seem to reflect the most recent official GDP growth number (actually, they say it does - we say it doesn't): 1.7% for the U.S. second quarter.
The survey expectation for "hiring" is that the economy will add 150,000 jobs per month until the middle of 2011 after which the numbers will increase to 175,000. Since the economy needs to add 125,000 net new jobs each month just to keep up with population growth, these numbers are positive. But, there is a generally accepted number for GDP growth that correlates with the 125,000 jobs number and that's 2.5%. That's the GDP growth number that most economists feel is needed to keep unemployment from rising. As we indicated above, the NABE economists' 2.6% GDP growth number doesn't look supportable to us, given the most recent quarter at 1.7%.
Last, foreign trade was not seen as weighing on economic growth. The NABE economists said trade deficits would remain constant as a share of GDP. In addition, those surveyed forecast a one-third chance of a "bubble" in China's economy which, to them, means not a high level of concern.
So, between purple squirrels and slower than expected economic growth, things are not as good as they could be.
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Wow, excellent article - thanks for sharing :) I'm very passionate about this, as you know, since I help out with recruiting for my company at UTD.
ReplyDeleteI see this as an opportunity on two fronts:
For current students - branch outside of our degree plan! Get experience in areas outside of what you're doing. I was talking with Frank Anderson the other day about some finance openings at my company, and he said everything requires SQL & Database knowledge these days, even for an entry-level financial analyst. It's unbelievable!
This also makes the internship during college THAT MUCH more important! My experience is that this is the only time that employers are willing to somewhat bend on requirements, since they know that you are training an intern as much as you are bringing them on to be productive.
Also - NETWORK NETWORK NETWORK!! Networking is not just about who you know, but who THEY know. Don't network when you need something from people, because any person half worth knowing can see through the facade. Chris Brogan says that for every 1 "ask" you do of someone, you should have 12 "gives" - times that you give to that person without any expectation of something in return.
For employers - the opportunity here is that you can bring in people with diversified backgrounds that could potentially bring a new way of approaching problems. Sure, you'd have to spend some time retraining your employees, but there's so much value! Charlie, we learned in your class that at Citi, they would bring in people with just completely different experience, and throw them into the fire to see how they come out. You want people that are willing to bend and learn, not someone so rigid they can't see outside of that exact job description.
I also don't buy the facade of "X years of experience." Part of the reason why I have a job today is because I was someone's "pet project" to prove that in a company where we only hire principle-level employees with "8 years of extensive experience), an undergrad finance kid could come into marketing and be successful. It's worked so far (I think!), but unfortunately we're "fat" again and willing to overpay people who supposedly have "more experience."
More experience also means you have a stuck way of doing things, and sometimes having a fresh look can help you.
As I was reading this article, Marcelo, I was totally thinking you.
ReplyDeleteYou're a purple squirrel. It's a huge compliment. But I'd argue equaling that success isn't a trivial venture (as I'm sure you would too), but also probably requires much more than a simple formula for success.
Luck, intuition, knowing the right people, etc. all plays a part as well, as I'm sure you'll also agree.
That's not to say that students today can't maximize their chances - they can and they should. But that doesn't guarantee an outcome.
It's the lack of the guarantee that's the problem. At no point was it ever really guaranteed. We're just so far from that state now that going to school, working hard, getting good grades, doing some networking, and even an internship oftentimes isn't enough anymore.
At some point we all have to agree that the situation is almost untenable for the average (or even above average!) student.
I don't know how you fix it, precisely, without heavy-handed government intervention. Corporations are sitting on record piles of cash and have little incentive to hire new American employees.
I'd argue that government is in a unique situation to incentivize that. The anti-offshoring bill that was just filibustered in Congress would have done precisely that, in my estimation.
Yes, by all means do everything you can to help yourself get a job. But we, as a society, should not be content with anemic job growth and blame the victim, either.
But Craig, that's the POINT - You can't just be average any more, you have to be more than that. If the only reason why students aren't doing this is because there's no guarantee of payoff, then I guess they are the average Millennial that expects everything to be handed to them on a silver platter. What ever happened to hard work? It's wrong to think that the only reason why someone should work hard is because there is an expected payoff in the end.
ReplyDeleteI used myself as an example precisely because I am NOT a purple squirrel. Today I'm working in marketing, managing product developments and roll outs after getting a degree in Finance. I did nothing associated with my job today in college, but because of networking ended up with my job because of someone I met through Charlie, hence my point that it's about who your network knows.
I know I'm preaching to the choir to you, but it wasn't hard to spend time in his office during my undergrad and happen to run into my eventual hiring manager toward the end of my undergrad (as a matter of fact, by accident because I was coming by to talk with him). I never expected something in return, I just did it because it was something I enjoyed.
To expect just a degree to get you a job today is presumptuous. You have to do more than that, or be ready to move back home with your parents after undergrad and job hunt for a while. I wasn't too close with a lot of people during my undergrad, but the ones who were and had internships are all employed today, especially the ones that started early during their junior year. An internship is also an opportunity to network outside of your direct group at the company, which should lead to other job opportunities when you graduate. It's not an equation, but definitely sets you up for success above a huge chunk of other college grads.
Also, my point is that this opportunity is two fold - companies have a great opportunity to snatch up great young talent today, and trust me, I'm doing what I can for my company to get them to do this.
Also, you have a business degree, you took economics classes in undergrad, you should know that protectionist policies like the offshoring bill do nothing but stunt economic growth. Without offshoring, prices will go up which will hurt sales of existing goods. It lowers the quality of life for the majority of the population, and eventually companies will move to more business friendly environments. You can see this on a micro level with different taxation policies between states. I just saw an article in another class that Adobe, EA, and other California-based companies are looking into moving to Nevada because of tax benefits. DFW also lost the relocation of the Boeing plant because Chicago provided better incentives.
Use government intervention for incentives, not to protect. Protecting the status quo (keeping jobs in the US) sounds great, but it's the easy way out. People need to work hard and retrain to be in new jobs.
Marcelo, we have to take into account that some people, even with all the training we could ever provide to them, will never be ABLE or WILLING to learn database programming. What do we do with them? Do we send them on a cargo boat to China?
ReplyDeleteYou seem to have a solution for the WILLINGNESS part (kick in the butt???--pardon my French). As for the ABLE part of it, our brain transplant procedures are not fully ready yet.
Christine, I can see what you mean. As you said, the willingness should be something that any person comes up with on their own.
ReplyDeleteThe able part, I disagree with - I truly believe that the majority of people (finance majors in this example) are more than capable of learning database programming. It's not as if they have a learning impairment. The fact is, what Charlie writes about above just goes to say that job requirements are evolving - being an entry level financial analyst now requires more skills than just finance, and that is an enormous opportunity for any students coming out of college. The fact is, you'll never have more "free time" in your life than during your undergraduate education (except maybe those who are working their way through college).
Here's the thing - it's not as if in this example, basic entry-level finance jobs don't exist anymore, there are just fewer of those positions at companies. Also, the people who ARE employed in those positions, most likely are learning new skills, such as database programming only upping the job requirements.
I'm just not understanding this backlash for my comments - all I'm saying is that for a student to better set themselves up for success coming out of college, they should be willing to take an extra step above all their peers to learn and network. Sure, it doesn't guarantee success, but in my experience, my friends who did do this are all employed today. I'm sure most of the people on here already do these things - that's why it seems so foreign, but it reminded me when I'd go into non-honors classes and the majority of the people wouldn't even show up to class! That's not setting yourself above. When I think of "average student," I don't think of "average MHP student" I think of those people who show up to a class of 75 only on test days and sit in the back of the room watching YouTube videos on their laptops...That's not how you get a job these days.
I think the idea that Craig and I are trying to express is that even if everybody showed up in class and networked as they should, they might not find a job in the end.
ReplyDeleteMy belief about the "able" issue comes from the realization of my own limitations. I am 5ft2''--I could clearly NEVER be a basketball star. And I have also studied enough math and programming to know that I will never win the Fields Medal--no matter how hard I study. I could "maybe" become a doctor--but I would need to study a decade to do so.
My point is that things are not as simple as "People need to work hard and retrain to be in new jobs. " It obviously takes time to begin with, and then there needs to be jobs waiting for them.
Christine summed it up pretty well. I'm not disagreeing with your method, Marcelo. I'm just disagreeing with your conclusions.
ReplyDeleteYour way is certainly the best way. But it's by no means any kind of recipe for a guarantee. If everyone did everything they were supposed to, roughly 15% of them still wouldn't get jobs because of current unemployment. Your plan can (and does) give an edge over those who don't work as aggressively at a job. But an edge is just that, an edge. It's not a solution for a crappy economy.
(and I still think you're a purple squirrel!)
ReplyDeleteI can see what you two are arguing, but we also don't live in this beautiful utopian society where the government guarantees that people with a college degree get a job. I disagree with you two that it's up to the government to get people jobs.
ReplyDeleteThe fact is, we will never live in a society where everyone gets a job, and all that individuals can do is set themselves apart from the rest to ensure they have a job.
We always see the "net jobs lost" number, but what we don't see is the "jobs created" raw number, which shows companies are hiring - it's even possible that the jobs being lost are in other sectors anyways.
Also, retraining isn't something that should be done when you lose your job, it's up to you as a smart person to constantly be learning and growing in your job so that you're setting your job requirements, not just fitting into one.
Right, but at what point does employment become a big enough issue that you even agree the government needs to step in?
ReplyDeleteNever? Not at 30%?
Is government responsible to control inflation? Why inflation? Why not unemployment?
It's these kinds of questions that I think a lot of people have a hard time answering. It's more rhetorical. Just food for thought.
I actually read a pretty interesting counter to those thoughts: http://mises.org/daily/4724. The point is: government intervention isn't really fixing the underlying problems in unemployment, they're just masking the true causes.
ReplyDeleteAlso, the government isn't responsible to control inflation - the Federal Reserve is, and while the president appoints the chairman, the board operates independent of the government, for good reason too. Could you imagine politicians getting involved in monetary policy?
This paragraph rang particularly true in light of this discussion:
Now the unemployment as such could be relatively easily fixed if the labor market were free of tampering by the government. In an unhampered labor market any individual that wants to work would be able to find a job at the going wage for his particular skills. Obviously, if an individual demands a salary unrelated to the market or is not prepared to move to other locations, there is no guarantee that he will find a job. For instance, if a market wage for John the baker is $80,000 per year, but he insists on a salary of $500,000, obviously he is likely to be unemployed.
Over time a free labor market makes sure that every individual earns in accordance to his contribution to the so called overall "real pie." Any deviation from the value of his true contribution sets in motion corrective competitive forces.
--Essentially, this is my point. There is a market (and supply and demand) for labor. That market is willing to pay people a certain amount for their jobs. Let's say a car manufacturer. All of a sudden, with offshoring of labor, there is a lower price because of the increased supply of labor. The government doesn't impact this - they COULD by enacting protectionist policies, but that only hampers economic growth.This is basic supply & demand economics, not anything advanced. Everyone assumes the government has all this power to fix things, but in reality markets will operate independently, the government can only mask true issues. It's like breaking your leg and just popping a tylenol to stop the pain. You still have a broken leg.
Other highlights that stuck out to me:
But does it make sense that the key to economic growth is the lowering of unemployment? If this is the case then it is valid to conclude that changes in unemployment are an important causative factor of real economic growth.
Now, the main driver of economic growth is an expanding pool of real savings. Fixing unemployment without addressing the issue of real savings is not going to lift the economy.
It is real savings that fund the enhancement and the expansion of the infrastructure. An enhanced and expanded infrastructure permits an expansion in the production of final goods and services required to maintain and promote individuals' life and well-being.
The artificial lowering of interest rates cannot lift the supply of credit if the pool of real savings is in trouble. Remember that banks just fulfill the role of intermediaries — they can facilitate available real savings. However, they cannot create real savings — the key for economic growth.
Hence, bank activities as such cannot boost real economic growth.
It follows then that an artificial lowering of interest rates cannot generate more lending that is fully backed by real savings. The only credit that commercial banks can expand is credit out of thin air, that is, inflationary credit.
Great comments all! Might I just add that my most recent discussion with our Dean on Zakaria's study depicting the lack of capital investment in the U.S. by Top 500 CEOs elicited his input that somebody should take a look at why Halliburton now has its headquarters in Dubai. I see Halliburton as an oil services business (others may see it differently) that was "logically" located in Houston. The CEOs in Zakaria's study told him they're not going to start spending in the U.S. until the tax and regulatory environment is clear to them. Tax breaks (read "incentives") have a lot to do with where a company locates and regulatory issues have a lot to do with where a company invests. Dubai threw out an "incentive" for Halliburton to move its headquarters there. Why didn't the U.S. government match it?
ReplyDeleteYou guys know that I'm not wild about "Economics" but one axiom of that science(?) is that capital investment creates GDP growth (which creates JOBS).
So, tax policy, regulatory policy and even government investment in "infrastructure", which in the U.S. is sorely needed, all contribute to the "capital investment environment."
Marcelo-
ReplyDelete"Also, the government isn't responsible to control inflation - the Federal Reserve is..."
To cite Wikipedia:
"It was created in 1913 with the enactment of the Federal Reserve Act, and was largely a response to a series of financial panics, particularly a severe panic in 1907."
Are you alleging that the federal government didn't create the Federal Reserve with the express purpose of doing things like moderating inflationary pressures?
Whether or not you technically label the Fed as being a governmental institution is splitting hairs - Congress saw financial macroeconomic problems as being large enough to create this entity to try to ameliorate them.
That view clearly supports my point that government handles inflation, or, if you want to get technical, created an entity to do so that is managed largely outside the auspices of the federal government.
You also never really responded to my question, which was at what point is unemployment high enough, in your estimation, that the federal government should get involved?
I can guess that perhaps you've answered "never" because it's your belief that the federal government could never create jobs, but I'm only guessing.
My point re: inflation holds with many other entities as well, if you consider the Fed example a problematic one.
Unemployment insurance, Medicaid, and a host of other societal issues we deemed too important to let slide have been handled by the federal government.
I'd submit that pervasive, persistent unemployment should also be addressed.
I don't think it should be addressed by suddenly allowing employers to pay workers $2.00 an hour if they see fit.
At what point does a job become a veil for abject servitude?
Craig: you're making outstanding points as is Marcelo. Having been thru high (!) inflation, wage and price controls, and double dip recessions, my generation would rather see inflation with full employment than what we have now. I read today that the Fed is going to spend substantially on bond purchasing with the hope of jump starting the economy - does anybody remember the point we made last year about Krugman and Buffet BOTH saying the "stimulus" was not large enough? Make tax policy clear. Make regulatory policy clear. Incentivize young industries (wind power: China is). Then the CEOs will spend! It's basic "Zakaria."
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ReplyDeleteNonprofits make great opportunities to sharpen skills and network too.
ReplyDeleteTo inflate or not to inflate, that is the question. Come on, you know their will be no more stimulus. China is limiting exportation of rare metals used to build alternative energy technologies... Obama did put a huge research spending bill on the table, but that went nowhere surprisingly fast. Software will probably lead to cutting more jobs too. I cannot exactly explain it, but software companies will try automate as much of businesses as possible. This will lead to more tech auditors and cyber security people, but less demand for an undergrad degree level of business education. Pay attention to the direction of software companies. They will alter your opportunities over the next 5 to 10 years.
A few things:
Employment situation analyzed further:
http://www.nytimes.com/2010/10/03/business/economy/03view.html?ref=economy
Running government more like a business:
http://www.businessweek.com/managing/content/jul2010/ca20100712_681461.htm
Government can save about 1 trillion with IT:
http://www.cio.com/article/622331/Tech_CEOs_Tell_US_Gov_t_How_to_Cut_1_Trillion_From_Deficit
Josh: thank you for your inputs. That was additive. We need to remember that the "Founding Fathers" probably did not have in mind that government needed to bail out businesses. And, for you and others who may have enjoyed my perspective on "Zombie Economics," our government's attempts to "regulate" (Greenspan: "The financial markets are self-regulating.") and "de-regulate" (The airline industry.) have been nothing short of spectacular failures. What do these people learn about macroeconomics at Harvard and Yale? For that matter, what did they learn about foreign policy?
ReplyDeleteThank you for your inputs too. Although I am disappointed by economic, regulatory, and foreign policy, there seem to be no professionals able to create better policy. This notion bodes gloomily, but we can always take comfort in the innovative prowess of our economy. American demographics, culture, and values aggregated together provide the necessary stability and environment to sustain innovation in ways other nations can only dream to rival. Maybe governments cannot handle such complexity as the economy, regulation, and foreign policy, but we can still survive by making new and better products.
ReplyDeleteIf some of you envy Marcelo so much, you should network with him. Use connections and knowledge to benefit each other. We are all aiming for relatively similar goals.
That NY Times article in my previous post is very interesting. Hint. Hint.
Thanks all of you for your comments on this post. I know that there are many more of you who have read it. Your comments have doubled the power of the original post and I salute you all for that!
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