Category: Job Market

Historic Context of Our Current Recession

There is a fantastic article in the Wall Street Journal, Obama’s Rhetoric Is the Real ‘Catastrophe,’ comparing our current economic situation to past downturns. The article details several major economic statistics for three time periods, the current situation, the recession of ’81-’82 and the Great Depression.

There is a fantastic article in the Wall Street Journal, comparing our current economic situation to past downturns.  The article details several major economic statistics for three time periods, the current situation, the recession of ’81-’82 and the Great Depression.

The situation today has a lot in common with the situation in 1981, although that recession was a little worse than we are seeing now.  In comparison, the Great Depression is in a category by itself.

One of the statistics from the article that stands out is in regard to unemployment.  The WSJ writes:

“In the last year, the U.S. economy shed 3.4 million jobs. That’s a grim statistic for sure, but represents just 2.2% of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost — fewer in number than today, but the labor force was smaller. So 1981-82 job losses totaled 2.2% of the labor force, the same as now.

Job losses in the Great Depression were of an entirely different magnitude. In 1930, the economy shed 4.8% of the labor force. In 1931, 6.5%. And then in 1932, another 7.1%. Jobs were being lost at double or triple the rate of 2008-09 or 1981-82.”

Our current unemployment would have to triple to approach the worst of the depression.  Last month, we saw a number of positive economic numbers.  I don’t think we’ve turned the corner yet, but we’re not in the death spiral of the early 1930’s either.

It’s important to keep some perspective on the job market when all the news is terrible.  If you are out of work and can’t find a job, it can feel like there is no hope.  Finding a job is tougher today than it was a few years ago – there’s no doubt about that.  It is not impossible, though.

Confidence is a major factor in a job search.  A lack energy and enthusiasm will hurt the impression given in an interview.  It is important to talk about your past successes and demonstrate pride in your accomplishments.  Without energy, enthusiasm and pride, you’re much less likely to succeed.  Self-confidence is often the most difficult aspect of a search to handle.  Losing a job can cause a complete lack of confidence, or worse, mild to severe depression.  Focus on your strengths and past accomplishments.  If you cannot restore your confidence and enthusiasm, seek professional help.




Remember, no matter how bleak the outlook appears, there are still opportunities.  In the late 1920’s and early 1930’s, there were a lot of people that started businesses and began hiring as they grew.  These individuals believed strongly that they could succeed no matter what the economic climate held.  Many failed, but some succeeded.  Below are a few examples of the companies that got their start and fought through the Great Depression successfully:

  • 1929 United Technologies (39th on Fortune 500 List, $54Bil in revenues)
  • 1925 Caterpillar (50th on Fortune 500 List, $45Bil in revenues)
  • 1928 Motorola (65th on the Fortune 500 List, $36Bil in revenues)
  • 1927 Northrup Grumman (76th on the Fortune 500 List, $32Bil in revenues)
  • 1931 Tyson Foods (88th on the Fortune 500 List, $26Bil in revenues)
  • 1930 Publix Super Markets (107th on the Fortune 500 List, $23Bil in revenues)
  • 1926 UAL (124th on the Fortune 500 List, $20Bil in revenues)
  • 1930 Fortune Magazine (Publisher of the Fortune 500 List)

Read the WSJ Article

Job Market Trends

I received the CareerBuilder Hiring Forecast for 2009 along with a few other reports from CareerBuilder recently. There are a number of interesting items in the reports, and two in particular that jumped out to me.

I received the CareerBuilder Hiring Forecast for 2009 along with a few other reports from CareerBuilder recently. There are a number of interesting items in the reports, and two in particular that jumped out to me.

Changes in Staffing Levels

The hiring forecast compiled data from 3,200 hiring managers. Interestingly, most said they were increasing or maintaining staffing levels. Only 16% said that they planned to reduce the number of permanent full-time employees in their location.

This may come as a shock to a lot people. The only news you can find talks about how bad the economy is. The economy is bad. We’re in a recession. January’s unemployment figure is due out today, and I expect it to be bad.

So, how can the CareerBuilder figure be right? As bad as the economy is, it is still running. We have unemployment around 7%… that means 93% of the workforce is employed. Companies also moved aggressively to layoff workers at the end of 2008 to position themselves for ’09. Many facilities are now staffed to ride out the downturn.

Additionally, many hiring managers understand that the average recession lasts about a year, and we haven’t had a recession lasting more than two years since the great
depression. We’re already a year into this, so the hope is that by 2010, we’ll be on the path to recovery. There is no guarantee that this will happen, in the 1800’s, we had two recessions last more than five years without an upturn. Our situation is bad, but doesn’t compare to the situation at those times. One of the prolonged recessions occurred after the War of 1812, when Washington DC was burned by the British, and the other occurred in the early 1870’s with the county still trying to recover from the Civil War.
Fortunately, our country is in much better shape than at either of those times.

We don’t know when the economy will start growing again. We don’t know which companies are going to hire and which will layoff. We can’t be sure of much right now, and the negativity in the news can be overwhelming.

If you need a job, the only option is to forget the stats and headlines. Aggressively work to find your next job. Maintain your self-confidence. There will be job seekers that desperately need a job but lose momentum in their search expecting failure with each application.

No matter how bad the economy becomes, there will be millions of people that find jobs in 2009. To be one of them, you need to be positive, confident and proactive. Attitude and effort will make a huge difference in your search.

Social Media

Employers are using social media sites to assess job seekers. A social media site is a website with a community of users that interact. MySpace and Facebook are the two biggest, but there are a lot more out there. Of the managers that checked social media for a candidate, one-third found a significant reason to reject the candidate based on what they found.

Some of the common problems that were identified included drug and alcohol use, inappropriate conduct, a bad attitude towards past employers, poor communications skills and lies about the candidate’s qualifications. If you have online public profiles, you need to maintain a basic level of decency.

You should also google your name to check what information is on the web about you. It is so easy to do a search on a candidate’s name, it will become a common screening procedure at many companies. You should at least know what they are going to find.

More information can be found in the the 2009 CareerBuilder Hiring Forecast the CareerBuilder Report on Social Media.

 

Corporate Downsizing

This weekend, it was reported that challenges in the auto industry extend beyond domestic producers.  Porsche is going to shut down production for eight days, Volkswagen is considering a three week shut down and Audi is preparing to announce a temporary shutdown.

As the world economy slows, companies are struggling with how adjust their cost structure to meet following demand.  Many firms are working to lower labor costs.  Past recessions can help predict how companies will act.

In the more recent recessions, we have watched different tactics for reducing labor expense. Some companies have laid off workers across the board. Others have reduced wages or benefits. There have been some that have reduced hours per week.

There is an interesting article from the Wharton faculty talking about how companies react to recessions and strive to reduce costs.  In particular, the article talks about how companies may utilize pay, benefits and hours reductions over mass layoffs. 

In the past, the priority was retaining key talent. Recessions were expected to be short and maintaining the core of a talented workforce was the priority. This led to across mass layoffs with the goal of eliminating the least experienced or productive workers.

This tactic was chosen over reductions in pay, benefits or hours. The companies hoped to keep their top employees happy even if the layoffs hurt morale substantially in the short run. Although poor morale hurt, the fear was that a cut to compensation would motivate top employees to leave for a competitor.

In more severe recessions, few if any companies are hiring. The risk of a top employee leaving for a competitor is extremely low with few options for the employee. In this situation, more company should resort to pay, benefit and hours cuts. Although this does cause significant hardship for the employees, it usually does not hurt morale as much.

If our economy declines substantially, it will be important to understand what you can expect from your employer. Layoffs may be a possibility, but so could reductions in compensation. If your employer reduces pay or hours, it may show a commitment and belief by the management that they can maintain their workforce at the reduced labor expense level.

To read the full article from Wharton, go to As Layoffs Spread, Innovative Alternatives May Soften the Blow

 

Job Trends

Indeed.com has an excellent tool to examining trends in the job market. Indeed is a search engine for jobs. It visits thousands of sites, job boards, company sites and bulletin board sites, and captures information about posted jobs. It then allows a job seeker to search all the results.

If you haven't started using Indeed, you should add it to the selection of sites you search. It is very comprehensive and can be almost overwhelming.

One of the features Indeed offers is a trends search. You can search a keyword to see the trend for job postings mentioning that term.

Education Requirements

Although the economy is slowing and jobs are becoming more scarce, this isn't happening evenly across all jobs. I took a look at the trends for different educational levels, and the results are interesting. Jobs mentioning a high school requirement have increased significantly over the last fours and show a slight drop in the last few months. Jobs mentioning a Bachelor's degree show a similar trend. MBA's are in a significant downtrend and do not show any job growth over the last four years.  PhD's are holding strong and have been increasing over the last two years.

High School

 

Bachelor's Degree

 

MBA

 

PhD

 

Competition for Jobs

The Ladders issued their 3rd Quarter Job Market Trends report this week.  The report has some very interesting data.  In particular, they provide a measure of the number of job seekers for each position.

The Ladders focuses on positions with salaries over $100k, so this isn’t a measure of the full job market, but the situation is probably very similar at other income levels.

Here’s what the Ladders reported:

REGIONAL JOB MARKET COMPETITION
Compares the number of active job seekers to number of $100k+ positions available in this location.

San Francisco
San Diego
Washington DC
Boston
Seattle
Houston
New York
Austin
Philadelphia
Baltimore
Chicago
Denver
Los Angeles
Phoenix
Miami
Minneapolis
Atlanta
Dallas
Tampa
Detroit		 2:1
3:1
3:1
4:1
4:1
4:1
4:1
5:1
5:1
5:1
6:1
6:1
6:1
7:1
7:1
7:1
8:1
8:1
8:1
20:1

In some parts of the country, the news isn’t bad.  2:1 and 3:1 are fair odds.  For a position, you need to be in the top half or top third of candidates and you should have a good shot.

Other areas, Atlanta, Dallas, Tampa and Detroit are a different story.  With so many more job seekers than jobs, you can expect that every job posting is going to be inundated with resumes.  In Detroit, with 20 job seekers for every job, you need to be absolutely outstanding, exceptional in almost every way, to beat out your competition.

The primary question is this:  If you were sitting in a room with 19 other people that have the same education and experience as you, why should you be hired over them?

There will be a few people that will have a great answer to this question.  They are the ones that will make the final cut and one of them will get hired.  The rest will never get this to this point.

You can see the rest of the report from the Ladders at:   Update 9/17/11 – the link to the report is no working it the old link was  www.theladders.com/static/boom/08_q3_index.html

Job Searches Put on Hold

CareerBuilder recently released their fourth quarter Job Forecast report.  One of the measures they track is the how soon employees expect to change jobs.

In the report, it shows individuals are putting their job search on hold.  People that have a job are choosing to stay in that job as they ride out the financial downturn.  In fact, only 2% of workers expect to leave their current job in then month, 6% expect to leave in the next 3 months, and only 11% expect to leave in the next six months.

Contrast this with the same measure from three years ago.  In 2005, 13% of workers expected to leave their job in under 3 months.  There are two ways of looking at this. The first is that half of the people that ordinarily would be looking for a job are deciding to stay.  The other way is that people are still considering leaving but are delaying their goals by three months to see where the economy is in January before the commit to leaving.

The effect of both of these is the same.  The companies that are hiring are still having trouble finding people.  In fact, one third of hiring managers said that they currently have positions that they can't find qualified people to fill.

It may seem odd that some companies are experiencing a talent shortage at a time of rising unemployment.  This is an effect of the complexity of our economy.  There are good jobs available, but they often are not where the job seekers are.  The areas hit worst by the downturn in the housing market are also the areas where the construction industry is slowing the most.  This makes construction jobs tough to find in the areas with the most available workers.  The same is happening in Michigan with the Auto industry.  There are opportunities, but they're not around Detroit. 

The challenge for a job seeker is knowing when to relocate.  For many families, the idea of moving a thousand miles is a non-negotiable – they aren't going to do it.  This means that the industries hardest hit will have to grow to create new jobs for the people currently unemployed before many of these individuals will find work.  This can take a long time – years in some cases.

There isn't an answer for this.  The issues of relocating a family, selling a house in a depressed market (or walking away and allowing a foreclosure), and finding a company that you can believe in and trust will provide stable growth are not issues with a clear answers.  They are issues that need to looked at very closely. 

The full report from Career Builder is available at http://img.icbdr.com/images/aboutus/pressroom/Q42008ForecastReport.pdf

Generation Y: The Next Lesson to Learn

Over the last five years, there has been a lot written about Generation Y – the generation that is currently in their 20’s.  One of the topics that is most prominent about the Y’s is the development of helicopter parents.

If you haven’t heard about this it will probably come as a shock.  Helicopter parents refer to the parents of college students and recent graduates that take an extremely active role in managing the lives of their children.  This management typically involves the parent(s) attending meetings with the student and teachers and job interviews.  This can include the parent questioning hiring managers and even negotiating the job offer for their child.

For many people, the idea that a person would take a parent with them to a job interview is tough to grasp.  Other generations were taught to demonstrate independence.  This new generation is comfortable seeking the advice and guidance of others.

In recent years, much of the writing on Gen Y has focused on helping hiring managers from other generations understand and attract Gen Y candidates.  We had a significant labor shortage in many areas of our economy, and companies had to change to get the best people.

As our economy slows, this labor shortage is changing into a job shortage.  The job seekers won’t be in driver’s seat. 

In some companies, this could lead to a shift in their expectations of job seekers.  Hiring managers may not cater to Gen Y candidates that maintain a visible helicopter parent the way they did.  They know that there will be other candidates that fit the hiring manager’s expectations better.

Does this mean that Gen Y needs to stop listening to their parent regarding career decisions?  Of course not – a mentor in your career is very helpful.  What it does mean is that it is very important in a tight job market to meet the expectations of a hiring manager.  Don’t expect to be able to be a rebel or maverick (it’s a little weird referring to a person, that listens their parents to an exceptional degree, as a rebel). 

This economic crisis could be the defining time for an entire generation.  Gen Y will grow from this and become the leaders of tomorrow.  They will bring both an openness to the advice and guidance of others and an independence and work ethic that will drive success. 

Where is the Job Market Going?

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.

Wall Street Job Search

In New York this year, there have been over 49,000 layoffs in the financial sector. Lehman contributed a lot of those and other firms had their share. The job market on Wall Street is going to be tough for the foreseeable future. So what do you do if you’re a finance professional in NY?

Although the economic situation on Wall Street has many unique aspects, the challenges facing the job seekers there are common in other sectors and regions. Many job seekers are in markets with more competition than available jobs.

To get hired in a highly competitive job market, it is essential to demonstrate how you will provide more value to a company than other job seekers. It’s not good enough to be capable of doing a job. There are a lot of capable people available. When an industry has some big companies downsize, a lot of good people end up on the market. The firms that are hiring have the ability to pick and choose the best available.

Talent and Potential

The key to getting hired in this type of environment is to demonstrate a higher talent level and greater potential than everyone else. This doesn’t require having the most experience or the best education. It requires the ability to show a track record of accomplishment, growth and success, demonstrating the value you will provide.

In every job, there are qualities that differentiate success from failure. The first step is identifying those qualities. I’m always surprised when I speak with someone they can’t explain what success looks like in the jobs they have held. This is much more common than it should be. Review the positions you have had and the position you are seeking to identify the three to five most important results that the position should deliver. These should be tangible results directly related to the success of the company.

The second step is to review your performance against each measure. Identify where you were successful and where you weren’t. Ideally, you will be able to describe how your successes contributed to the overall goals and success of the company.  To be most effective, develop specific examples of how you contributed value to the company. 

Finally, determine how your past successes would benefit a current employer. Will you generate sales and increase revenues? Will you cut costs and boost net income? Will you improve quality or customer service?

The key is to show three things on your resume and in your interviews:

  • Will you do the job successfully

  • Will you add value beyond the core responsibilities of the position

  • Will you develop and grow to contribute in new ways in the future

If you demonstrate you can do these three things, you will have a leg up on the vast majority of your competition. Most people focus on demonstrating just the ability to do the job successfully.  In a tight labor market, when companies are desperate to hire, that’s fine.  In a weak labor market, there’s to much competition and the job seekers that show they will add the most value beyond just doing their job will get hired. 

Companies are still hiring. The challenge for many job seekers is showing their true potential. Work on demonstrating your record of achievement and potential for success and you will achieve better results in your search.

Where Is The Hidden Job Market?

There is currently a discussion on LinkedIn Answers about whether a hidden job market exists and the common belief that the majority of jobs are never posted.  I posted an answer, but a much better answer was posted a little while later by Gerry Crispin of CareerXroads.  CareerXroads does some great research of the job market and Gerry’s answer provides some excellent insight. 

The original question on LinkedIn was:

Does anyone have a statistic to back up the old 80/20 rule on networking? i.e. 80% of jobs are never posted

Here’s Gerry’s answer: 

The statement is not true. It never was but it arose as a legacy of the print classified culture pre-internet. In those days the Sunday classifieds section of newspapers defined "a published lead" and clearly they represented no more than 20% of the actual positions open. Today, more than 95% of all positions are published – primarily on the websites of the various firms that have approved them. The "hidden job market" has nothing to do with the opening being hidden – it is now all about the transparency of what the job really requires, the firm, the hiring manager, etc.

Networking is absolutely not about uncovering the "hidden market" as leads – that’s just a sadly misleading image that still sends job seekers down blind alleys.

For a job seeker:

  • Networking can be about sharing leads with others in a disciplined way so as to leverage the research of many.
  • Networking can be about obtaining unpublished information about the published leads to gain a competitive edge when interviewed.
  • Networking can be about identifying and reaching out to individuals in target firms where you have seen published leads or have reason to anticipate that a new opening will be approved…for one reason…to obtain permission for that person to be your "employee referral."

The real story about referrals is not that nearly 1/3 of positions are reported as being filled from employee referrals. Instead it’s that fact that so many positions are filled from so few referrals that is important. Nearly 1 of every 4 referrals results in a hire!

By my calculation [and I do have data] job seekers applying for a position with an employee referral are 70 times more likely to be hired than w/o one. (Even a third party recruiter putting forth several candidates is more likely to get his/her candidate past finalist to new hire if the candidate has an internal referral.)

It is better to say: The 20% of jobseekers who managed to find a job without networking probably took 80% longer than their colleagues who did. I would also suggest that they also 80% more likely to perform below average than their colleagues who network….and 80% less likely to know it.

The conclusion is pretty clear.  Make sure you’re networking to improve the information you have and utilize relationships to get referred into a company.  According to Jerry’s stats… getting a referral into a company improves your chances by 70 times!