With the current financial crisis, there is tremendous uncertainty in our economy. This is most obvious in the financial markets after Monday’s decline. The markets are worried and investors react to increasing risk by selling.
Now the decline in stocks doesn’t directly affect the job market. In some respects, it’s more of a symptom than a driving force. Unfortunately, because it is a symptom of the risk in our economy, we have to recognize the risk to the job market.
The Credit Crisis
For most people, the credit crisis has had no direct impact on them. The people are feeling this are the people that need to borrow money, and in reality, these people are not individuals, but corporations. The auto industry just received $25 billion in loan guarantees from the government. In a normal economic climate, it’s unlikely this would have been necessary. They could have borrowed from private entities, but today, that money isn’t available. Banks are very reluctant to loan money.
The biggest problem with the credit crisis is how it is stopping the expansion that should be occurring. With the decline in the dollar, manufacturing firms are finding it much easier to export, and much easier to replace imports. We continue to see the job market in manufacturing hold steady (outside of areas with heavy auto industry concentrations). What we’re not seeing is a boom in expansion. Manufacturing has been at capacity for a while, but new plants are not being built on a wide scale.
The cause of this is two-fold. First, companies can’t borrow because of the credit crisis. Second, there’s a fear that the economy will get worse and an expansion won’t be needed. The effect of these factors is to limit the growth in the parts of our economy that are doing well.
The Job Market
The New York Times had an article Monday about how the job market could be affected in a significantly different way as compared to past downturns. The article, “Does the Financial Crisis Threaten Your Job,” discusses how in past recessions, companies cut back unskilled positions most. Skilled positions tended to be retained as highly skilled workers were too valuable in the long term and too difficult to replace.
The article predicts that this downturn will be exactly the opposite. Individuals with Bachelor’s degrees and more advanced degrees will be hurt much more than the lower levels of our economy. This poses a significant challenge for college seniors, as the job market in December and May could be bleak.
How to Adapt
Dealing with a tight job market requires a lot more work. Start by networking very aggressively. Try to find a contact in the companies you are targeting that will refer you for a position. This can greatly improve your chances.
One of the most important aspects of your search is to have a strong positioning statement. This is the core statement of value that you bring to the table. Many job seekers state that they are good at a particular job or skill. In a tight job market, being qualified and capable aren’t enough. Companies focus on hiring the best talent. This requires standing out from your competition.
With our interview coaching, we focus on uncovering the accomplishments and experiences that demonstrate how an individual has been successful and has added unique value to their employers. If you’re having trouble doing this, get help.
In interviews, you need to expand upon your positioning statement. You can do this in the answer to the Tell Me About Yourself Question. You should also reinforce the value you offer throughout the interview. Job seekers that can’t do this well often interview once and have the process stall. They don’t get another interview and they don’t get an outright rejection. The process just grinds to a halt.
The reason for this is that the hiring manager doesn’t have a great reason to hire or reject the candidate. They can see the individual could do the job, but they can’t get excited about hiring them. Instead, they say they will think about the person more but nothing changes. Eventually, the company finds someone that gives a compelling reason to be hired – and they get the job.
Bottom Line: Work on developing your positioning statement with a compelling reason why you should be hired, focused on the value you will provide the company.