Filed under: Business, Change, Human Resources, Leadership, Marketing, Recruitment, Resources, Travel, Uncategorized | Tags: AIESEC, alumni, exchange, internships, opportunities
Filed under: Business, Human Resources, Recruitment, Society, Sustainability, Technology
What’s stopping equitable recruiting? If recruitment isn’t a level playing field, then the recruitment industry is at least partly to blame.
Across Europe and the rest of the world, institutional process has a definite and damaging impact on increasing executive diversity in the workforce. While a few voices work to erode that impact, we’ll still be facing discrimination — both conscious and unconscious — far into the foreseeable future.
While deliberate discrimination still happens far more than anyone admits, the battle against this barefaced prejudice is well advanced, although it may never be conclusively won. Unconscious bias, on the other hand, is far more subversive and wide reaching.
Even the most enlightened, diversity- and equality-conscious individuals and organisations are prey to it, and we all need a better understanding of it if we are to diminish its impact.
I have seen it where I least expected, a woman discriminating another woman based on gender. A mature manager discriminating another one based on age.
Unconscious bias often starts with the first thing a recruiter experience of a candidate — their CV. Recruiters, helplessly are conditioned through long practice to review CVs in a certain way and to look for certain characteristics and features in them. Every recruiter gets reprogrammed when starting in another firm and we are effectively given a blueprint for assessing a CV against a job specification.
When I review a CV, I run through a checklist of what I expect to see and deviations from that ‘normal’ are exclusions or extraordinary happy surprises. With most recruiters, non-standard CVs are quickly discarded in the first or second cut and rarely see the light of day.
Unfortunately, a large proportion of diverse candidates have an ‘irregular’ career progression and ‘irregular’ educational backgrounds and I was right there at that pile. This barrier, at the very first link in the chain, is arguably the most pernicious form of unconscious bias — and almost certainly the most widespread.
Even for recruiters who do understand the value of increasing capability in such non-standard career paths, a common challenge is coping with generalist vs specialist experience. Candidates with broad generalist experience across 20 roles, for example, are difficult for a ‘straight-line thinking’ recruiter to cope with. Assessing overall competency across those 20 roles is far harder than assessing someone with a narrow field of focus, with the result that we tend to favour the specialist, at the expense of people who might bring far wider experience and diversity of thought.
Again, a large proportion of diverse candidates bring that generalist background to the table, and again, they stand to lose out.
Those two elements of unconscious bias are compounded in recruitment process outsourcing (RPO) situations, where the large organisations delivering the recruitment (and the third parties they employ) tend to rely on rigid processes because of their economic models and service-level agreements that inadvertently promote the kinds of unconscious bias described above. I have seen poor RPOs in action and they tend to draw talent from a very narrow band, risking the organisation’s employee value proposition with unsophisticated social media campaigns.
The same can be said about some preferred supplier frameworks that appoint ‘the usual suspects’. When the usual suspects recruit on your behalf, you’ll tend to see the usual suspects in terms of candidates as well. It’s potentially a negative cycle in terms of diversity, since those kinds of recruiters and recruitment firms typically lack the desire, client relationships or leverage to promote diverse candidates.
The simple elements of unconscious bias barely scratch the surface of the issue. Add them to the current market pressures, and the result is a narrowing talent funnel, drawing candidates from a narrow, homogenous group of people. Understanding and overcoming unconscious bias is the next big barrier for diversity champions to break down for sustainable progress.
Filed under: Branding, Business, Goals, Human Resources, Leadership, Marketing, Planning | Tags: Emerging markets, Employer branding, Globalization, Market expansion, Recruiment
What are the divergent challenges global talent professionals are currently facing?
As the UK, Europe and the US start having the feeling of catching a breath after recession, businesses continue to follow strategies mapped out when an economic recovery appeared within reach, and are under pressure to grow despite an increasingly shaky economy. This has left organisations striving for growth with fewer resources, leading many to rely on growth in emerging markets to propel their businesses forward (few will do it for other reasons, like truly appreciating the potential of these regions).
This has created a dual challenge for global recruiters. In regions and countries in which the organization is well established, organisations struggle to improve the performance of the workforce in the face of declining employee engagement and effort levels as well as cutting through high volumes of applicants to find the often very specialised skills the organisation still requires.
In new markets, organisations are struggling to attract enough talent in very competitive labour markets with short supply of technical and managerial skills and high levels of staff turnover.
As a result, talent professionals are faced with a set of challenges that represent themselves unevenly across global labour markets and find solutions to new challenges in new markets.
Despite an influx of applicants in established markets driven by a soft labour market, recruiters continue to struggle to find the right skills to meet the needs of the organisation.
Another challenge for organisations recruiting for roles in developed economies is that, unlike many emerging economies, the talent they require is becoming even more entrenched in their current roles. Rising unemployment has made the most talented employees fearful of leaving their current roles with just a small part of those employees actively looking for a new job.
The situation is very different in emerging markets or new markets. For multinational companies, attracting talent in emerging markets has always been a challenge, and one that has grown since the financial crisis. Until recently, local employees favoured international companies, believing them to offer better career prospects and higher status than their domestic rivals.
Memories of the economic crisis and the rounds of redundancies made by multinationals however, means that many local employees now perceive local companies to offer more stable career paths and better prospects.
The stakes are high for international businesses operating in emerging and new markets, as their ability to capture market share will be largely dependent on the quantity and quality of their local team. A ‘one size fits all’ approach to talent across global labour markets is destined to fail. While high levels of unemployment in the developed economies have resulted in a flood of applications for every available role for established organisations, it is becoming increasingly difficult for organisations to attract and retain talent in emerging and new markets where their brand power might not be the same.
To cope with the divergence between new and established markets
Differentiate your sourcing strategy across global markets
When recruiting in the markets where an organization is already established, companies need to take a more strategic approach towards recruiting and move away from the mass branding they have undertaken previously to attract candidates. In new markets however, companies need to focus on promoting their employment brand, communicating their commitment to the country, their focus on individual employment development and their overall employment value proposition.
Establish long-term workforce planning and forecasting
In many organisations staffing planning focuses on identifying and responding to current talent needs and does not address longer-term strategic gaps within the organisation. In both established and new markets companies need to think about the skills the company is likely to need in the future and to build a pipeline of candidates that will meet this need.
Focus on skills not just experience
Recruiters need to encourage hiring managers or boards to focus on candidates’ skills rather than their knowledge, experience and education. For example, one friend’s employer, an insurer, wanted to ensure that new hires for a particular role were qualified actuaries. Having struggled to identify candidates the company changed its approach and began hiring people with backgrounds in banking and consultancy and found their new hires to be just as effective as the actuaries hired previously. I believe special approaches to technology and software development could also benefit from such an approach.
Use succession planning to build a pipeline of external talent
Business leaders should be encouraged to consider both internal and external candidates for key roles. Nowadays business leaders focus on strategies such as to identify three candidates who could fill a key role, one of which must be an external candidate, helping to build a pipeline of ready candidates based on the incumbent’s own network as part of the annual succession planning process.
Start building your employment brand in new markets
In addition, there are further, specific steps that we believe companies must take to build their employment brand in a new market:
Develop local career opportunities
While most employees within multinational companies in new markets once hoped to be posted overseas, more and more employees now prefer to advance their careers at home. Companies need to design their international rotations accordingly, at the same time exposing a higher proportion of their global leaders to key new markets.
Provide compelling career paths
While competition for talent has meant that many employees in new markets demand unrealistic, rapid promotions; a more pressing concern is the alignment between their current role and their professional interests. Creating a credible career path that charts a trajectory to personally fulfilling jobs and leadership roles that are managed carefully on an on-going basis will help to reengage employees.
Be clever about pay
In order to secure the right talent, local companies in new markets globally are prepared to pay up to 50% more to lure employees away from multinationals. However, many employees in new markets continue to express strong preferences for careers with international companies, and so a more moderate salary increase is likely to convince employees to remain in their roles.
Develop local roots
International companies that are well established in emerging markets can develop many of the advantages that local companies are perceived to have. A global brand that can demonstrate strong local roots will leave companies better placed to acquire the domestic talent it needs to keep growing in those new countries.
Talent gaps in the English speaking countries and the rest of the world
The talent gaps in both the English speaking countries and the rest of the world are real but not insurmountable if companies focus on tailoring their approaches to recruiting in these markets. Developing a strong team will be crucial for all businesses wishing to compete in an increasingly competitive market place, and so businesses need to focus their talent strategy on a limited number of candidates with the right skills in order to fill requisitions in the established markets, while boosting their brand to attract candidates in larger numbers in new markets.
Note I : In this article I have used the terms “New markets” and “Emerging markets” interchangeably, given that most companies will think of new or emerging markets in terms of emerging and developing economies, but I believe similar phenomena can be observed in countries in which any organization is starting operations without previous support of a strong employer or product brand. The same struggles some of my friends face in the Middle East at the moment, are the same challenges I face in my current role in Germany.
Note II: I refer to “English speaking countries”for the large majority of multinationals have their headquarters or regional offices in English speaking countries. This has a large influence in the way multinationals attack new talent markets abroad. I believe treating a new labor market or searching in a new labor market, as it was the US, the UK, Singapore or Australia (among other regional powers) is a huge mistake that should be avoided.
Filed under: Business, Change, Human Resources, Innovation, Society, Sustainability
An organization that is truly diverse understands both the differences and similarities in people. Inside the organization you’ll see people from all different backgrounds working together and how a blend of employees adds intrinsic value to the business.
An increasingly global network, due largely to the expansion of technology, people from all different backgrounds, experiences and perspectives are all coming together to work in various capacities. Virtual connections have significantly increased the capabilities of doing business.
A more diverse business environment is rapidly developing through e-commerce, customer service practices, supplier relationships, outsourcing, partnerships and merges to name a few. As a result people are exposed to differences.
Businesses who embrace diversity go above meeting the confines defined by the law because they recognize the advantages from a both a business perspective and from a social one. They understand diversity shouldn’t divide employees, but instead unite.
There is a strong business case for diversity because companies who are genuinely diverse and invest resourcesin diversity initiatives have found lower turnover rates, and less discrimination lawsuits brought against them for sexual, race and age discrimination.
Additionally, what we all have heard before is: People who are diverse in culture, background, social class, gender, age or religion all bring something different of value to a company because of different life experiences and perspectives. Each employee helps shape a unique perception on work projects, processes and issues because of the differing backgrounds. These distinct viewpoints help businesses grow because of the innovative ideas inspired by diverse viewpoints.
From the social perspective, investing in diversity initiatives means equal practices for all people within their organization without exercising positive discrimination either is the right thing to do. Organizations that have become intensely aware of the value of diversity and from a humanistic point treat everyone equally and with the same respect.
A great case for this is made for example in the commented book, Womenomics while being careful once again of maintaining objectivity; As I mentioned before, exacerbating differences in a superficial way is too one sided. Only genuine appreciation for the unique value different people bring to business will drive growth and could in some cases become a key driver for organizations to operate in a true synergic and organic way, and this kind of adaptability is of utmost importance for those that want to be successful in the future.
What has been observed though is that companies which invest resources in diversity measures experience strong levels of growth. It has been proven customers like to see themselves represented within the companies they do business with, so in addition to the other business and social reasons for diversity, the market base is a high consideration and strong argument for diversity as well.
Also traditionally known… Diversity naturally drives innovation because the differences in ideas, incentives, knowledge base and experiences all promote new inspirations and initiatives. When people who work together think alike, this good to an extent, but it is the challenges which make a company grow.
Businesses which hold strong conviction and dedication to diversity illustrate they recognize the value and advantages that naturally follow diversity. The committed company celebrates the differences which exist amongst different backgrounds and realizes the worthy contributes people all bring to their organization beyond the obvious differences.
An immediate result of globalization is that many of us are faced with the challenge of participating in, managing or coaching a multicultural team. Not too long ago, I was a member of a highly international team based in Rotterdam, The Netherlands. The team members for the most part shared a background, even a set of shared values and opinions, so it was easy to assume that the most “serious” differences would come from their diverse cultural backgrounds. In this case we came from 18 countries globally.
The performance of our organization across more than 80 countries depended in large part on the ability of this senior team to work together as a cohesive group – within an accelerated and limited time frame. Have you ever found that the cross-cultural models you have learned are not always enough to solve the problem or improve the performance of a struggling international team?
Multicultural Teams are Complex
Cross-cultural knowledge is an obvious pre-requisite for working with any team whose members come from different cultures. We acquire this knowledge from our reading, from our studies, from company-sponsored seminars and most importantly by maintaining a very high level of self-awareness when we step outside our own cultural boundaries. However managing cross-culturally is complex because real business issues are complex and often require more than a linear solution. So, how do we avoid the trap of over-simplifying the complexity of the issues faced by international teams?
Let’s agree that there is more to understanding an international team than being aware of the diversity of national cultures represented by the members. We know from experience that there are key differences found on any team which may include gender, race, individual personality, cognitive and emotional intelligence, educational, and occupational backgrounds.
Working in this international team and living as an expat in multiple countries as a professional expat over more than 10 years has taught me that over-emphasizing the national cultural differences found in a team can sometimes be too one sided. Understanding cultural difference is key but alone, is not sufficient to achieve a highly performing team. Other factors include: the purpose for the team’s existence, the influence of personality differences, the impact of culture, professional identities, the level of emotional intelligence, and the importance of a robust support system for the team.
Purpose of the team’s existence
If we are involved in managing, coaching or participating in a team our first question should be: “what is the purpose of this team?” What brings the team together? Research has shown us that the secret to a strong team is a clear common purpose and identification of each member with that group task.. Indeed the very definition of a “team” is a group of individuals working on a common purpose. Our first analysis of a team should start with looking at the reason for its existence. If the team is composed of members from different cultures, once we understand the answer to the question “what is this group trying to accomplish?” we can move on to examine the impact of different factors on the team dynamics.
My international team was exceptionally good at this. It was the common vision, purpose and timeline that we had that allowed us to perform despite the professional and personal conflicts that arose in a year’s period.
The Influence of Personality Differences
One of the factors that became immediately apparent with the multinational Rotterdam based team was that some of the greatest difficulties between team members had everything to do with individual personality differences and very little to do with culture. It can come as a great relief to any team to recognize that “unpleasant” characters exist in all cultures. Much of the tension generated by some individuals on the team was a result of their personal style, which had little to do with our native cultures.
However, as I have observed in other multicultural teams, it is a risk for any team to almost unconsciously fall into the “political correctness” trap and was trying to tolerate unacceptable behaviour because of the assumption of it being culturally driven. Once teams realized that cultural difference is not an excuse for misbehaving or being inflexible it was as if a great weight had been removed from the collective shoulders. How to come to this realization?
Using models like the Myers Briggs Type Indicator (MBTI) or Personality Index (PI) to examine the differences in personality style and to practice ways to make constructive use of the differences.
Like similar personality indicators, the MBTI quickly enables a team to construct a “model” of personality preferences. Team members are able to recognize the contributions of the different personality “styles” and how they actually complement one another. Team members can learn to respect the differences in “style” which can begin to be valued as “strengths” which the team could leverage. Extraverts and the introverts can gain new understanding of their differences. The team can start to become aware of the profound differences, dictated by their genes and past through their personalities, in the way that they gather information, make decisions and structure their environment. Can you think of a better framework to begin examining cultural differences?
Unfortunately there are no bulletproof solutions for personality conflicts. Sometimes the personality of a team member can hinder him or her in understanding these principles and to be able to put him or herself in the shoes of a different team member. Finding this type of wall on someone else and how to get past this point is something I still have to discover.
The impact of culture
For the past many years authors on cross-cultural communication, such as Geert Hofstede, Edmund Hall, and Fons Trompenaars have illustrated the role that cross-cultural differences play within a team. Their work has provided us with the intellectual framework, the specific terms and the dimensions of culture to open our eyes to the differences in management style, which are influenced, by culture. The approach that I’ve taken to prepare others to for cross cultural team work starts by helping the individuals examine the values, beliefs and assumptions of their own native culture before they try to analyse a different culture. They quickly learn to see how geography, history and religion impact values, beliefs and assumptions, which in turn shape the characteristic behaviour of a group. They build a model to understand the dimensions of their own culture and only when this is done they move on to examine the points of convergence and divergence with the other cultures represented in the team. The point is to learn to recognize and respect the differences. Only then can the team begin to “reconcile the dilemmas” – as advocated by Trompenaars – which can arise from the clash of cultural differences.
The Rotterdam team for the most part shared a business related background – still there were few with Scientific or Humanities. As we worked through a time these different professional identities began to become apparent in different approaches to problem solving. These “sub-divisions” of cultural identity that members bring to a team can be the source of many dilemmas that need to be reconciled. For instance, it is my experience that engineers, as a group, are very loyal to their profession (fellow engineers) and are very similar in their ways no matter their national culture or the company they work for. The same is no doubt true for other professional groups such as Finance. These are true cultural differences that need to be taken into account. Are there other differences that need to be considered?
I would like to suggest that the “emotional intelligence” of a team is an emerging factor that should be considered and developed. Solid research shows that teams whose members exhibit a high level of emotional intelligence come together faster and achieve higher levels of productivity more quickly than teams with less emotional intelligence. “Emotional contagion” is a very real issue in the life of teams – team members “catch” emotions from other team-members. We have all experienced teams of highly skilled individuals who seem eager to achieve something together only to see politics, squabbling, private relationships and internal competition corrode the team. I have never seen a team that considered “emotional intelligence.”. Therefore, I have come to believe that this is of vital importance in team member selection.
Global Leadership Competencies
I believe that leaders who manage multicultural teams (which frequently are “virtual teams:” whose members reside in different countries) need to have a clear understanding of the dimensions mentioned above. The global leader has to develop a new set of competencies to deal with the challenges of culture. These skills include understanding that they do not have to know all the answers – they need to be able to learn new solutions with and from their teams. They need to be ready to “reconcile” the ethical dilemmas that will invariably result from different cultural approaches. Above all they need the patience, experience, emotional resilience and sense of humour (which correlates with the ability to learn from their mistakes) in order to be able to manage the ambiguity inherent in conducting business across cultures. These skills are not necessarily taught in business schools.
As for the team I referred to – physically based in Rotterdam – I believe we came together as a “high performance team” and managed in most cases to leverage the incredible synergies that arose from our individual differences. And today, after that intense year, years ago, we are close friends. An international team can deliver a life altering experience.
In your standard career site employer brand offers applicants little more than bland platitudes and empty promises. Open jobs are focused on the minutia of what the job requires, while the employment marketing speak surrounding the jobs emphasizes long-term careers, goals, and identity.
It’s no small wonder that applicants are often confused by the experience and expect very little from employers (that not considering that more of then not the user experience and accessibility of most career microsites is considerably poor). Applicants see differentiation in employer brand, certainly: the marketing speak and graphical style for employers differ wildly. From the complete non existant employer brand in hedge funds, to the visceral sexuality that retail employers often employ, to the vaguely cultist exclusivity of the top tech firms, at least on the surface, employers appear to offer a very different set of opportunities and challenges to their job applicant
Employer branding is, after all, marketing. Marketing puts not only a positivity over everything, but rather seeks to address fundamental human desires. You don’t want a job as a software engineer. You want to make an impact, find a home, fit in with your peers, discover the world, etc… Employers then just have to ask themselves about their HR policies, structures and benefits and consider if they can truly leverage on those urges and the promise they make. A recruitment slogan is developed to frame the question and then drive that messaging throughout the site and job descriptions. It is meant to communicate a common dream, the ambition of a team.
If you develop your career site or participate in employer branding, it’s not only your duty to develop impactful recruitment campaigns and branding that convert traffic to applicants, but to develop programs that accurately reflect your company. The whole “truth in advertising” debate is a separate topic, but most can agree that some more truth in emploeyert brand would be appreciated by most applicants. As a matter of fact a false employer brand may attract candidates under the wrong premises and waste a lot of work and resources when causing a large attrition rate.
However, before you develop your branding, copy, and slogans, you have to ask yourself a fundamental question of purpose. Are you talking about yourself or the applicant? If your vision is to address a fundamental human concern of your target talent pool and map it to your company’s career opportunities, should you be describing what makes you different or asking the candidate what makes them different? Should you portray a strong message of corporate unity or play up employee differences?
Two career sites to consider: IBM and Microsoft. Both companies are what you might consider large, rather conservative brands. Both are major employers and in roughly the same industry. But they have, at least at first glance, radically different employment brands. You can notice this instantly in the way recruiters from both of them approach you. Yes, it is like Googl, Facebook, Amazon and LinkedIn. They are all internet and yet they are definitely not the same.
IBM: The employer brand of IBM has somehow transcended description over the years. It’s almost pervaded our popular culture. If someone is carrying a Thinkpad there is a certain message sent across, and working at IBM despite the recent turbulent times the company faces carries with it a large set of inferences and IBM knows it. It is not surprising then, that on their career site their main marketing slogan is “Are you ready for IBM?”
IBM may in fact be taking a somewhat self-referential and tongue in cheek approach to the perception that their company culture promotes conformity. However, their primary question does make a strong assertion. It asks: Are you one of us?
Microsoft: When we think of Microsoft employee’s we also carry a number of preconceptions and stereotypes. We immediately think of their iconic leader, Bill Gates, that has framed their employment culture in much the same way as Steve Jobs has influenced Apple. We think Windows. Actually meeting former Microsoft employees will give you a big surprise… their loyalty is amazing, to the company and the products.
Microsoft, however, asks a very different question of applicants. They ask “How do you see the future?” and then follow this with a Nirvana lyric: “Come as you are” and “Do what you love.” It’s a different message at first. Microsoft isn’t asking if applicants are “one of us,” but rather implies: “We think you’re ok as you are.”
Notice, however, that although Microsoft wants you to come as you are, they do imply that they know who you probably are. You can “Do what you love” at Microsoft because Microsoft assumes that you like coding in C# and are an evangelist of Outlook. Their employment brand assumes knowledge of the audience, whereas IBM comes across more like a challenge to your identity. Where IBM checks your ID and sees if you belong, Microsoft lifts the rope and says come on in.
To develop your corporate employer brand and drive the right kind and volume of applicants, some corporate soul searching is required. Very few companies have the type of unified corporate brand and identity that IBM has. If you work at ABC Corp, what does it mean to be an ABCer? If you are like most regular sized employers, it probably means very little. To develop this type of brand unification requires you to come up with a definitive statement of company culture.
To develop the Microsoft employer brand actually requires the same introspection with the addition of some more subtlety. When it comes down to it, you don’t want applicants to come as they are, you want the right kind of applicants to come with the qualifications that you need for your job requirements. But what demographic are they appealing to with a Nirvana lyric? It’s actually pretty specific and pretty smart.
When looking at the two companies, we at first see radically different value propositions and employer brands: conformity versus individuality, exclusivity versus inclusiveness. However, upon closer examination, both ask the same question to applicants: Do you know the secret hand shake?
You can see how complex and thought-out these career sites really are. Unless you’re in the Fortune 50, chances are you haven’t paid as much attention or used the same level of marketing as these companies. However, if you are looking to develop your career site or position careers at your company, it’s good to understand the fundamental question that you want to ask of applicants. You have to ask “Do you know the secret hand shake?” only after answering the prerequisite question “Who are we?”
Disruptive with purpose… this is the one I am working to go very deep into. Exploring all the different ways in which the secret hand shake is presented, and if you know it, please write me a note.
Filed under: Business, Human Resources, Society | Tags: economic recovery, employment, employment agencies, hiring, labor, Temp work
The recession supposedly ended two years ago. Corporate investments and proﬁ ts are up. But unemployment remains, and many companies that do have job openings are taking forever to ﬁll them.
So what gives? If companies are making and spending money, why aren’t they hiring?
Countless experts and major news outlets have weighed in on the issue, and no one can offer a simple answer. Rather, there appears to be a number of factors that have come together to create the perfect storm—a jobless recovery. There is no easy ﬁx, and the result of these combined factors could be a permanent shift in the US and western Europe hiring . . . and the way you recruit.
But we’re getting a little ahead of ourselves. First, let’s analyze why a jobless recovery is happening. While we can’t possibly explore every reason that may be holding employers back, there do appear to be a few root causes perpetuating this jobless recovery that are worth discussing.
Reason #1: Uncertainty in the economy
The ofﬁcial end of the recession was in the summer of 2009. But the so-called recovery has been so slow, it’s hard for many people, especially those still on the unemployment lines, to decipher the difference between now and the thick of the recession. Every time there seems to be a little spark in the economy, something (natural disasters, high gas prices, the debt ceiling debate, etc.) quickly snuffs it out.
Meanwhile, several governments are anything but employer-friendly. New laws and “crackdowns” on existing regulations are making hiring increasingly more expensive and complicated. And then there are the unknowns. For example, how will budget cuts in the wake of the debt ceiling deal affect businesses? What will happen to Greece? When will it be enough for Germany? What will the still-to-be-enacted provisions of the healthcare and social reforms do to insurance premiums?
All these factors have some economists talking about a “double-dip” recession. With that fear lurking, you can’t really blame employers for being cautious. After the devastating layoffs of the Great Recession, the last thing anyone wants to do is hire employees they will eventually have to lay off.
Reason #2: Companies learned to run lean
Another thing the recession taught employers is that they can do more with less. In previous recessions, employers were reluctant to make deep cuts to their workforces, so they kept more workers than they needed and productivity fell. Not so in this recession. Companies cut to the bone, and workers were just expected to work harder.
Now that companies know they can run lean, they are reluctant to add to their overhead, even as their business picks back up. Every candidate that is hired direct (perm) adds a huge payroll expense, plus they have to ﬁgure at least another 40 percent or more for employer taxes, workers’ compensation, unemployment, medical, dental, and vision insurance, etc. So a $100,000 direct-hire now costs an employer at least $140,000.
As an interesting fact I know that the return on investment (in payroll) of top employers worldwide is something around 1:12. Yes, for every Euro or Dollar they spend in a person they make sure to get 12 back… if that is not lean management I don’t know what it is.
And as technology advances by leaps and bounds, it’s getting even easier to get more done with fewer people. When companies ﬁnally reach the breaking point where they have no choice but to hire, they are only hiring as much as they absolutely have to, which brings us to the next issue.
Reason #3: The candidate dilemmas
Even when companies say they are hiring, it’s taking them forever to do so. Recruiters already know this and won’t be surprised to learn that it is taking hiring managers up to four times longer to fill open positions, according to The Wall Street Journal.
Why? Well, with all of the people looking for jobs, some hiring managers ﬁgure it’s a buyer’s market and are not willing to settle for anything less than the “perfect candidate.” Even when a recruiter brings a hiring manager a great prospect, it’s not uncommon for the hiring manager to ask for more candidates.
There is a different candidate dilemma in sectors like healthcare and technology, where there appears to be a true skills shortage. The Wall Street Journal stated that, although there are 4.68 unemployed workers for every job opening, companies say they can’t find the people with the right skills they need at wages they can afford in those areas.
The result: A ‘fundamental change’
The fact of the matter is that every company that stays in business will at some point have to hire again. But that doesn’t mean they have to commit to direct hires. Many instead are utilizing contractors to get the additional help they need while maintaining flexibility. As a result, contract stafﬁng has been one of the few bright spots in the recovery. In August, temporary/contract stafﬁ ng revenue rose 16 percent over last August, and temp-to-hire revenue rose 19 percent, according to Stafﬁng Industry Analysts.
That’s nothing new. If you’ve lived through previous recessions, you’ve probably seen for yourself how temporary/contract stafﬁng typically increases following a recession as companies test the hiring waters. But as Adecco CEO Tig Gilliam stated in a recent CNN interview, this time it’s different.
This recession was so tough, companies are very much more focused on ﬂ exibility going forward, and I think they are going to be looking for increasingly ﬂexible work environments in the economy as we get this recovery going.
Yes, I wish everyone good luck in planning their lives with more than a one year view of the future. Even more to my fellow staffers who suffer even more because of this than anyone else in the business.
This is no short-term ﬁx. Results of a recent study published in The Wall Street Journal show that 58% of employers expect to hire more part-time, temporary, or contract workers, not just over the next several months or year, but over the next five years.
A new workforce model
So what we are seeing is more of a permanent shift where companies are maintaining a core of direct employees and supporting that core with a larger outer ring of contractors. This new workforce model can help them navigate around the issues we’ve discussed by:
1. Allowing companies to remain lean because they can quickly bring in just the amount of help they need and just as quickly reduce their workforce when business slows.
2. Eliminating the fear of devastating layoffs because contractors know from the get-go that their assignments are for a speciﬁc period of time.
3. Limiting companies’ overheads because there are no employer payroll taxes, beneﬁ ts premiums, or administrative costs with contractors.
4. Allowing companies to “try-before-they-buy” because if they are not sure they have the “perfect candidate” or question a candidate’s skill set, they can engage them in a contract-to-direct arrangement.
The harsh reality
Business has always been challenging, but for many companies, it’s getting harder to make money than ever before. There are more government regulations, taxes, and more types of insurance. There are more attorneys waiting to pounce when a business makes a mistake. Technology has increased the pace of everything. Competition has increased. Margins have decreased, etc., etc.
Many of these challenges are not going away even when the economy improves. The harsh reality is that, even if the economy bounces back better than ever, direct job orders may never come back to the level you once enjoyed. Contracting used to be just a nice extra source of income, but it quickly could become THE source of income for many recruiters and other project managers or sales reps.
Companies are changing the way they’re doing business to survive in this new economy.
But I am left to wonder… is this really the best solution?
Reason #1 Against contract hiring: Agency fees are ridiculous
Any given company will pay a fee to a temp agency of 70% – 90% of the salary the temp will receive every month.
Meaning, if a temp gets $1 per hour, the company they are working in will have to pay between $1.70 and $1.90 for the temp to get that $1. and temps are no longer only juniors… there are senior temps, temps with leadership responsibility. Now calculate… For the $50,000 net salary a temp recruiter earns per year in Germany, or the $45,000 she/he gets in France, their asignee will have to pay:
In Germany $85,000 (+70%) and in France $85,500 in France (+90%!!!!).
If the country’s legal framework allows fixed term contracts E.g. Employing someone directly for a period of 1-2 years this move will save the company a lot of money, fixed term hiring keeps its flexibility AND you get rid of the other monsters that these companies bring to us.
And another important thing… in many countries a 12 months contract in this framework will allow your employee to get unemployment insurance from the government (Germany, Ireland, etc.) which in the normal temp basis (only 11 months hire) they don’t get. If you are going to get the best out of this person, promising them nothing in exchange… is it not only humane and fair to offer a little comfort in case of the worst as you are hiring them to be thrown to full life uncertainty? Think about it, with this employment situation, your temp cannot get a credit to buy a car, a house or pay their wedding… look a little behind the curtains.
Reason #2 Against contract hiring: Give a punch to employee engagement
Contractors these days are no longer blue collar workers. Today contractors have university degrees and work hand in hand with permanent employees in the same level of complexity, with the same level of confidentiality and I dare say the same level of results. A top performer leaving for no good reason is a low blow to any team’s morale.
Plus… how could anyone give their best performance until the end knowing they are out anyway? If they know they will leave and they were told once the contract was a part of the process to get hired?
You tell me how productive you can be if you have no idea if you are worthy or not, or for the simple matter… if you have no idea what will happen to you.
And then contractors only get reference letters from their employers, aka. the temp agencies… really this has no value.
Reason #3 Against contract hiring: Service? What is that?
An employee will go to the Human Resources department with different issues. Contractors get sent to their agency contacts which in my experience provide little or no guidance to the contractors around issues like immigration, insurance, taxes, sick leave, etc.
Most contractors get payslips that are hard to decipher as Egyptian hieroglyphics. From the moment they sign a contract, the documents are so unclear that there is rarely clarity on what the person will earn… an index per hour plus minus something… surprise every month… oh… and holidays are not paid fully, not even if they are only those stipulated by law. And in case their is a salary problem, no one to back them up.
Yes, many contractors finish their contracts feeling betrayed, maybe you get even in legal trouble… who knows…
With close to a decade in Staffing, I just don’t think this is the solution.
Filed under: Business, Change, Human Resources, Leadership, Personal Discovery, Resources, Travel | Tags: brimm, complicated questions, cosmopolitans, different cultures, international careers, national boundaries
A couple of days ago I received a an academic paper from my friend Petroula. It lacked the statistical backup I have grown used to see in my day to day (my current employer is obsessed with numerical data) but it described accurately something far more complex.
Trapped in the every day frenzied life style I live, I didn’t reply to say thank you for sending it. It was the first time I read in the words of other person what comes to my mind very often for the past few years, what I have been blamed of, reproached and praised for for my entire adult life. Yes, my choice and achievement, that didn’t come for free. That thing that many envy, that many wish and set as a goal to achieve and that from time to time I feel I have been cursed with: A truly global life. Unstoppable. Unavoidable. Wanted… my only option.
Meet the Global Cosmopolitan – member of a talented population of highly educated, multilingual people who have lived, worked and studied for extensive periods in different cultures.
Global Cosmopolitans describes the world of some (me and my very close friends belong there), a world where national boundaries have become permeable through the opportunities for international careers and personal travel, a new breed of individual has emerged who both reflects this change and promises to be the key player in the next stages of globalization. This is the ‘Global Cosmopolitan’, a featured actor in this emerging drama who has lived in different countries, learnt to speak multiple languages and acquired an ease of moving to new situations. However, being a Global Cosmopolitan can also result in increasingly complex issues of personal identity. New and complicated questions such as ‘Who am I?’ and ‘Where is my home?’ are hidden under more easily discussed topics such as languages spoken, countries visited and passports obtained. This exciting new book by Linda Brimm affords a unique view into the world and experience of Global Cosmopolitans. The author combined the stories of many that could be me or my close friends, told in their own voices, with a variety of useful concepts for understanding the experience that seems to be very rare. So rare that I feel alone in it most of the times, and in company in it just when people like Petroula, sharing that same connection with me, are there.
It was beautiful to see how many of my friends reacted to this book in different ways. Many of us think about it, talk about it for long hours twice a year when we get the chance to meet, and now it is there, on paper… for anyone living with us, thanks to us or despite us.
When my boss described me once as “the first truly international person I have ever met”, I felt flattered. When a colleague at work calls me from time to time “a corporate gypsy” it hurts for reasons he doesn’t understand.
This paper describes accurately the circumstances, fear, frustration and strengths one person gains by choosing ”not to have a home” as most understand it; Bewildered by the wonders of the world, developing an addiction to change, to new information, to new people, to a different kind of success… You simply need to read it.
This type of thing really make you see how the world is flat.
And here some more http://www.globalcosmopolitans.net/
Filed under: Human Resources | Tags: Career, Development, Economy, Function, Jobs, Organization, Recruitment
There is an absolutely wonderful children’s book called 20 Heartbeats about a painter who paints a horse for a very wealthy man. I hate to ruin it for you, but I have to say what happens.
The rich man pays this famous painter to paint his favorite horse. But years go by and the painter won’t finish the painting. The rich man finally shows up at the painter’s house and demands the painting. The painter obligingly whips out a piece of parchment, dashes off a horse in black ink with his brush, and then hands the painting to the rich man. All this takes less than the time of 20 heartbeats.
The rich man is, of course, aghast. He storms after the painter to demand his money back. However, as he walks after the painter, he sees what has been taking so long.
All along the walls are hundreds and hundreds of painted horses. The painter wasn’t procrastinating, he was practicing. The rich man then finally takes a look at the painting that he purchased so long ago, now in his hands. It’s a perfect horse, a horse so real that he whistles to it.
As every art form takes discipline and practice to look easy, every kind of work takes years of diligence to perfect. Recruiting is no different, but few professions look so simple. It’s really hard to pass along a piece of paper, right? You can almost hear people in the business thinking to themselves, “Yeah, I’ll bet your fingers are really tired from dragging all those resumes from a folder into an email. Real hard work.” Few jobs seem so easy to duplicate.
The end product of recruiting, for one thing, is someone’s else’s work – it is someone else’s talent, ability to interview, and everything else they have that gets them hired that is the end product of the recruiter’s process. It’s hard to pinpoint the recruiter’s exact role in this pseudo-science. Did they identify the talent? Spot them? Find them? Assess them? Understand the job? The culture? Have the right database? The right connections? The right insight into the department or hiring manager psychology? Did they make a lot of calls or know some secret strings to search for in Google? It’s hard to say what it is exactly that the recruiter does and so it’s easy to discount the recruiter’s role entirely.
However, we might be looking at it wrong. A recruiter’s value can’t be found within the process of a single hire. It can’t be found in that space that sometimes spans twenty heartbeats between talking to a manager about a job to the identification of a possible talent.
You have to look at everything that comes before that identification to see the value of a good recruiter. A great recruiter creates the conditions for that magic luck to strike. They don’t talk to a lot of different people. They talk to everyone, they inspire and persuade many. They don’t want to know their clients or their company’s competitors. They want to know everything that’s happening at every company in their area. It’s a massive amount of work that requires constant analysis, rejection, failure, stress, and is compounded by the minutiae of job offers and the uncertainty of human emotion.
Yet the irony is in the nature of the job itself. The current working environment will give very few recruiters the opportunity of a long haul career in any organization. When the global economy is volatile, headcounts are more so. Obliged from temporary contract to temporary contract, many will start developing the paranoia of the jumping CV many of their clients reject and a career change becomes more than intricate… maybe because recruiters are not seen as members of an organization that interact with its external environment in the same way Marketing or Sales do (I dare say, often with more legal responsibility that these functions); Maybe the HR prejudice of an “inability to deal with data”… It is an interesting exercise to sit from time to time and realize the revenue impact a recruiter’s job has in his or her organization over a year.
I personally believe that a tenured recruiter’s skill set is much closer to that of someone in Marketing or Sales Consultancy than to that of their Human Resources counterparts.
That’s why very few succeed at recruiting. It’s not like there is anything special about that one placement. There is nothing about identifying a candidate and getting them a job offer that requires any particular kind of magic. Unlike a beautiful painting, anyone or any recruiter can luck out and make a placement or two. But the background required for long-term recruiting success is much different. It involves the deep study of companies, products, markets, assessment, and professions coupled with a kind of brute force stamina to doggedly pursue the talents of other people. This is the process that forges the recruiter’s talent. This talent, when functioning at its best, is impossible to find anywhere else in the organization.