I suspect that the aforementioned twit, er, Tweeter was trying to look cool rather than gain anything practical from using Twitter instead of other modes of communication. After all, e-mail is so 20th century, and as for the phone — that was invented in 1876. Who would want to admit they used one? Might as well resort to carrier pigeons.

Let’s Go Surfing

Recruiters have a tendency to jump on the latest technology without fully appreciating its benefits or ramifications.

The newest entrant to the recruiting world is Google Wave, soon to be the solution du jour. By this time next year you’ll be told that if you’re not using Wave your career as a recruiter is likely to disappear faster than a burst of flatulence in a hurricane. You will be done with; finished; gone the way of Pontiac and Lehman Brothers — and deservedly so.

So what is Google Wave? Its inventors describe it as what e-mail would be it had been invented today instead of back in 1971. E-mail was a product of its time — an electronic version of postal mail — just faster. Back then the bandwidth was very limited so the best that could be done was send out small amounts of text. Its purpose is to send messages. It is a collaborative mechanism of sorts, but the constant back and forth of e-mail chains can get out of hand very quickly, the chaos increasing exponentially the more people are involved. Enter Google Wave: much better suited to a collaborative work environment than e-mail. A user who sends out a wave creates a workspace shared with all the people that receive it. The participants can add text, pictures, links, maps, etc. Everything is visible to everyone as it happens because all activity is logged in real time since the wave is stored on a central server instead of individual computers. Wave also keeps the activity organized and searchable. Wave brings together the functionality of just about every social media application and online communication tool. You can read everything you ever wanted to know (even if you didn’t) here.

Wave has some appeal for recruiters, not the least of which is that it’s free. As a collaborative tool it can help with activities like group interviews, evaluating candidates, writing up job requirements, etc. That’s the low-hanging fruit. Thinking more broadly, if an employee sends out a wave to a group of friends, then a recruiter could surf it (I just coined a term) to engage with them: an instant social network. Make it reach a large enough group and you could have a tsunami. Maybe not — that has too many negative connotations. Nobody wants to be associated with that. On the flip side, a bunch of disgruntled candidates sick of the shoddy treatment they got could get together and unleash one to wreck some company’s employment brand. That would be a Katrina. The possibilities are endless.

Diamond in the Rough, or Fool’s Gold?

Of course, the path to social media nirvana isn’t all roses. For all its faults, e-mail has some great features — like being able to ignore it or respond on your own time. Wave is a real-time application, which means it demands real-time attention. That can limit its appeal. Not everyone wants to be engaged all the time.

E-mail had another reason for gaining in popularity so fast. It did something that was very familiar and didn’t require a fundamental change in behavior from users. There’s a reason e-mail icons have a picture of an envelope. Using Wave well will require people to make some significant changes in behavior. Collaboration in real-time is not a normal everyday activity.

How much will Wave change recruiting? Impossible to predict. It’s just a tool; no more, no less. It’s only as good as the people who use it. Some recruiters will undoubtedly find creative ways to use it but for many it will only be a distraction. It will generate a lot of buzz and have some value in some circumstances for some people. What is absolutely certain is that it will not be a silver bullet solution for recruiting. There are none.

Get your account, and when you have it, let’s go surfing. Don’t wipe out.

The economy grew 3.5% in the last quarter, signaling a definite end to the recession and the start of a recovery. That’s great news, but look closer and it doesn’t seem that there’s much to celebrate yet. Six-tenths of a percent came from spending by the federal government and another 2.2% from residential construction and auto purchases. The latter number is directly linked to the cash-for-clunkers and the housing credit. That leaves only 0.7% from private industry. This is why we’re not seeing any growth in jobs. The economy is growing because it’s being propped up by taxpayers (and the Central Bank of China) instead of by real growth in GDP. In some places this is known as a ponzi scheme.

The government claimed this past week that the stimulus package has added 650,000 jobs so far. Well, to be precise, “created or saved” that many jobs.

Jobs have been added, but just how many have been “saved” is another matter. There’s no doubt that spending on jobs has a multiplier effect; the money earned by a nurse at a hospital funded by the stimulus may go to saving the job of the mechanic at the auto repair shop where she has her car worked on. But that connection is impossible to make with any degree of precision. When it comes to estimating the number of jobs saved, the White House’s estimate is as good as yours or mine. And it’s likely that any estimate of jobs saved — since there’s no way to dispute it — is an optimistic reading of the numbers. If you’re going to make things up, then why hold back?

The fact remains that the economy has shed an average of 400,000 jobs per month since the beginning of the year. That rate of decline has slowed, and shows signs of continuing to slow even more, but it’s still a net loss. Economists predict that unemployment will start to drop in February, reaching 9.4% by the end of 2010.

Light at the End of the Tunnel

Despite all the bad news, there are signs that the situation will genuinely get better on the jobs front. Numbers from the U.S. Commerce Department show that exports and investment in equipment are both growing aggressively. That will continue since the dollar remains weak and the economies of India and China are showing significant growth. Construction and related industries will also continue to grow, with or without further tax credits, as the inventory of housing is at its lowest point in 30 years.

2010 is an election year, and nothing focuses the mind of the political class as the prospect of an election that may not go well. So programs like a tax credit for hiring are very likely to pass soon. Unfortunately, having politicians determined to do something can often mean a lot of very bad ideas being implemented. There are already rumblings about a second (or third) stimulus, which will only distort long-term growth prospects further. Recent earnings reports from companies show that plenty of them are back in the black and in a position to make new hires. Lighting a fire under them with a tax credit for new hires is one thing; piling on costs and subsidies for new projects that will undoubtedly result in new taxes on them is another.

Some things are almost always a lie: the check is in the mail; I’ll respect you in the morning; and I’m with the government and I’m here to help. Let’s hope we don’t get reminded of that yet again.

I guess the White House has gotten over the Olympics debacle. Okay, I can’t claim the credit, but the good news is that several measures are being seriously considered to provide a tax credit for creating jobs.

One program, devised by the Upjohn Institute for Employment Research, and a similar one from the Economic Policy Institute, would give employers tax credits for two years for increasing the number of jobs they have, above some baseline, or adding significant new hours. The amount of credits is small — from one to two times the amount of payroll taxes on each new hire, but it’s still progress. Far better than paying for bridges and roads and healthcare programs that at best indirectly create some temporary jobs.

The idea isn’t anything new. In 1977 to 1978 the federal government created the New Jobs Tax Credit — a wage subsidy equal to $7,000 for each additional worker hired. The program is estimated to have added about 2.1 million new jobs, at a cost of about $20,000 per job (in 2008 dollars). Compare that with the estimated $92,000 per job created under the current stimulus package and one has to wonder why this wasn’t started earlier.

If implemented, the credit is estimated to result in the creation of 1.3 million new jobs per year. This can’t happen soon enough. The unemployment picture is worse than the numbers suggest: over half a million people are estimated to have stopped looking for work altogether. Had they stayed looking, the official rate would be over 10% already. The tax credit would also arrest the attrition of skills that’s occurring with such a large portion of the workforce being unemployed for so long. The loss of value in human capital is orders of magnitude more than the loss of income.

The program is not perfect. Some of the jobs for which credits are claimed would have been created anyway. Other jobs may go away when the credit expires. Ideally the credit should be large enough to offset the payroll cost of creating new jobs. But beggars can’t be choosers, and right now there are a lot of people close to being very real beggars.

Despite hundreds of billions of dollars in stimulus spending and lots of government programs, we’re now close to 10% unemployment, having lost 7.2 million jobs since the recession began. If the economy were creating 200,000 jobs a month it would still take three years just to get back to where we were. And that isn’t all. The economy needs an additional 100,000 jobs a month to keep up with population growth. If the job market returns to the rapid pace of the 1990s — adding 2.15 million private-sector jobs a year, double the 2001-2007 pace — the U.S. wouldn’t get back to a 5% unemployment rate until 2017.

So what’s holding things back?

Plenty. Most jobs come from the private sector, and that has been hit with a double whammy of first an increase in minimum wage, and second a lack of sales. The increase in minimum wage couldn’t have been worse timed. Whatever the merits of increasing minimum wage, it does nothing to increase employment. That change alone is directly responsible for increasing the unemployment rate for teens to 26% — the highest rate since 1948. Which reinforces the second problem: some $385 billion fewer was paid out in wages and salaries over the last 12 months. Small and medium businesses, which generate most of the jobs in the country, are the hardest hit. Sales have dropped, credit is still tight, and legislation like healthcare and cap-and-trade only adds to uncertainty over costs. Instead of a concerted focus on job creation, the administration and Congress keep coming up with asinine ideas like Cash for Clunkers.

The First Law of Motion

If there’s a bright spot here it’s that historically, the harder the fall, the faster the recovery. Call it the economic version of Newton’s law that every action has an equal and opposite reaction. Economic growth jumped following deep recessions in the past. Following the depression, when unemployment hit 25%, the economy grew at an almost 10% annual rate for four years. The unemployment rate dropped by 11%. Following the deep recession of 1981-82, the economy grew an average of 7.7% for six years. The Economic Cycle Research Institute, which has successfully predicted the start and end of the last three recessions, has an index on the U.S. economy, and points to a very strong recovery in the coming months. That’s good news, but jobs growth doesn’t always parallel economic recovery.

A near immediate impact on the jobs picture could be achieved by following the Singapore example – a tax credit for businesses that create jobs. For such a program to work, the credit would have to offset the cost of creating jobs — basically equal to the payroll cost of new jobs created — and it would have to be around for a few years. That would light a fire under employers and nullify the effect of the two factors limiting job growth that I mentioned above.

What’s needed is action where it’s needed the most. Trouble is that the need to do something drastic for job creation doesn’t seem to be registering in Washington. Instead, on the heels of the Cash for Clunkers boondoggle we have Dollars for Dishwashers — a program to provide rebates for buying new energy efficient appliances. What’s next? Pennies for Potties, to put in new toilets?

Tell your representatives to call 65-6235-8577: the Prime Minister’s office in Singapore.

Effective Matching

The first is QuietAgent. It has developed a new approach to matching candidates and jobs. Matching technology is nothing new. Other products have been available for at least a decade. But most matching products are a black box. Using them requires having total faith in the methodology and algorithms developed by the vendors. They do work, but frequently it’s not all clear why candidates get ranked in a particular way. There’s also no way for a recruiter to influence the matching. The vendors are not inclined to let anyone do so because the technology is the result of a big investment in research. Recruiters find this “father-knows-best” approach frustrating when the matching doesn’t produce the kind of results they expect.

QuietAgent has moved beyond these limitations. The technology uses the ONet database as the basis for classifying and matching jobs with resumes. ONet is the largest occupational classification system in the world, and it’s in the public domain, making the basis for matches better understood. More importantly, QuietAgent’s technology can be adapted. Users can adjust how the matching works. A user can specify different combinations of criteria on which to match candidates with jobs. For example, five years of experience and certain skills, or three years and a different set. This is a big deal, as all recruiters know. Hiring criteria are rarely rigid, and search tools, such as the ones on job boards and ATS, allow for little flexibility.

QuietAgent is the technology behind AllianceQ and UnitedWeWork. The former is an association of larger employers that are willing to share resumes of candidates with others. The latter is a free job board. QuietAgent’s association with AllianceQ makes for a powerful combination, because it also provides a supply of candidates. This may not seem like much today, when candidates are in abundance, but the day will come when candidates are again in short supply; then, this makes for a great combination in one package.

Reliable Resumes

I recently heard an interview with a NASA veteran who was hired at the start of the Apollo program. What was most interesting was that he and most other engineers were hired at NASA purely on the basis of their resumes. They sent in a resume and subsequently received an offer letter. This wasn’t unusual, up until the 1960s. Bringing candidates in from out of town was rarely done because of the expense. And no one did phone interviews; long distance calls cost a lot, and the sound quality wasn’t all that great. If a candidate looked good on paper then they were often hired.

How things change. A resume isn’t worth a whole lot today. We use it as the starting point of a long process. That is the way it needs to be. By some estimates a third or more contain significant exaggerations or outright lies.

One company solving this problem is Resumefit. Candidates who complete the company’s assessments get a “certified resume” locked with a digital key. The value here is that any recruiter receiving the resume can be assured that the claimed skills are true. Other vendors have attempted to create equivalent products before, but they’ve focused more on verifying employment, references, and criminal history. That has limited value before a hiring decision is made. Knowing that the skills and abilities described meet a certain level is much more useful to employers using skills-based hiring. This makes the recruiting process much more efficient because recruiters don’t have to waste time trying to read between the lines and can be reasonably assured that decisions they make are based on reliable information.

QuietAgent and Resumefit may not generate the buzz created by Twitter but they are solutions to well-known problems and serve very fundamental needs in recruiting. These needs will still be around when the ardor for social networking cools, as it will. Recruiters use of social media will balance out once its usefulness is better understood, settling into a niche supporting referrals and talent communities. But we’ll still be looking for effective and efficient ways to match candidates with jobs and find resumes with reliable information.

Twitter has value for recruiting, no question. Tweeting jobs raises their visibility because search engines rank them higher, though this works in an indirect way. Twitter adds a “nofollow” attribute to links submitted by its users. The “nofollow” attribute advises Google, and a few other search engines, to ignore the link. Some of these follow the links but exclude them from their ranking calculations (Yahoo, Google); some ignore the links completely (MSN, Bing). The only known search engine that doesn’t comply with “nofollow” at all is Ask.com. What Twitter does is to affect positively a website’s Alexa rankings by sending visitors to those pages. Usage data is a sign of quality for Google and all the other search engines and raises their rankings in search results. But search engines don’t index Tweets in real-time today so there’s a lag. However, that can be compensated for by using the “bio” line on Twitter to include some text on your jobs, because that is being constantly indexed.

Pointless Babble

Broadcasting openings via Twitter can help fill jobs, as described here. But Twitter is a particularly weak tool when it comes to engaging with others or building community. First lets examine the available evidence. Analysis of Twitter usage patterns show that there’s not much in the way of two-way communication happening via Tweets. A study by Pear Analytics found that some 40% of Tweets qualify as “pointless babble” and about the same amount as “conversational updates.” It should be no surprise that while Tweets are great for broadcasting anything, they’re not a channel on which to have a serious conversation. Twitter is much too public a forum to engage with a community. Communities on Facebook and other sites are restricted: you have to be accepted as a friend to get in. Anybody can follow someone on Twitter or find their tweets. That’s not how communities form.

Further proof of this comes from a study at the Social Computing Lab at HP which found that Twitter users have a very, very small number of real friends compared to the number of followers they claim. A link between any two people does not necessarily imply any interaction between them. In the case of Twitter, most of the links between users are meaningless from an interaction point of view. Put that together with other data, such as that half are not active, and the only conclusion that can be drawn is that as a social networking tool Twitter has limited value.

Social Networking 101

Social networking works by engaging with people and communities. Communities share something — an idea, an interest, theme, or topic. That happens more on sites like Facebook, MySpace, or Cachinko, where access is limited and one has to request to join a community. HP’s Social Computing Lab has also found that inside close-knit communities, information flows faster and to more people because an item relevant to one person is more likely to be of interest to individuals in the same social circle than those outside of it. Engage with the right communities and you can amplify your message and expand your networking efforts exponentially. But the key word here is “engage” — having something to share that the community cares about — so that its members will interact and reciprocate. That is more likely on sites like Facebook than through Twitter. Just how many meaningful conversations does anyone have that they’d like the world to be able to learn about?

Using Twitter is not a waste of time, but its value is limited as a way to expand your social networking efforts. For the average recruiter interested in social networking, their time would be better spent engaging with communities on Facebook and other sites. Twitter can raise the visibility of your jobs, but it’s not the most powerful tool in the social media toolset.

The last time I wrote about this subject some people interpreted it to mean that I was critiquing everything to do with social networking. Far be it for me to do so — I like social networking and it has been a huge benefit to me professionally. I just returned from a six-month project in Switzerland that came about because of social networking.

Some readers pointed out that many find it hard to accept any kind of criticism that challenges their cherished beliefs. If you haven’t got something nice to say then don’t say anything. If you’re not with us you’re against us. Seems like narrow-mindedness isn’t limited to healthcare reform. That’s understandable — nobody wants to be told that the prophet they’ve been listening to doesn’t have the answer to their prayers and probably doesn’t know a whole lot more than them. One of the many lessons my parents taught me was that just because someone may not like what you say is no reason not to say it, unless you’re running for election. And I’m not.

EE = (1-N) X (R/P)

Where:

EE = Effectiveness of Engagement, expressed as a percentage

Engagement, in this context, means getting ready access to employees’ networks, regardless of the mechanism for doing so. Virtually 100% of employees have social networks and connect to them using different means (networking sites are not the only way to do so), but only a certain proportion of employees may be willing to give an employer access, by either making the contacts available or agreeing to forward job postings to them.

N = The proportion (%) of employee networks that an employer or recruiter has engaged with.
R = The average number of qualified referrals received per month per employee
P = The average number of postings accepted by employees to their networks per month

So if an employer is engaged with 10% (N) of employees’ social networks, and on average each employee accepts 3 (P) postings per month, and produces 2 (R) qualified referrals:

EE = (1-10%) X (2/3) = 60%

If the same results are achieved by engaging with 50% of employee networks, EE = 33%

Engagement is more effective the larger the number of qualified referrals received for the same proportion of employee networks an employer is engaged with. However, this is not a bottomless pit. Research shows that beyond a certain threshold of postings, the volume of qualified referrals starts to flatten out and even reduce.

Reality Meets Hype

All that’s being claimed about the potential of social networks as sourcing tools hinges on being able to increase N. But engagement takes time and effort and there are no shortcuts, which is why many of the claims being made about how social networks can revolutionize recruiting border on the ludicrous.

Take the buzz around Twitter as an example. Originally conceived as an answer to the prayers of narcissists and stalkers — okay, “to support the idea that people should enjoy an ‘always on virtual omnipresence’” — it’s now being touted as a critical tool for recruiters interested in social networking. The conventional wisdom is contradicted by a recent study from Harvard that shows it to be just a broadcast mechanism. Ninety-percent of tweets are generated by 10% of users. Across all Twitter, users the median number of lifetime tweets is one!

Social networking is about communities, where there’s sharing of information, give and take, etc. for the members to stay connected with each other. Twitter is a one-way street — there’s no evidence to show that it supports social networking. A recent interview with Twitter cofounder Biz Stone has him talking about companies using Twitter to sell pies, warm cookies, and respond to customer service requests. There’s no social networking going on here, unless the pie eaters are sitting around the same table.

Some would claim that having a broadcast mechanism is precisely the point. A recruiter can broadcast jobs. That requires candidates to follow them or the employer. In which case, just how is this different than an e-mail alert? Job postings don’t have the same shelf life as warm cookies, and a quick response usually doesn’t alter the outcome.

Increasing N

Research on communities by the Pew Foundation and others shows that engagement requires starting in and participating in conversations. The main reasons people share are:

• To help someone who would benefit (81%)
• To give back, after benefiting from sharing (42%)
• To show enthusiasm (39%)
• To show dissatisfaction (19%)

Interestingly, only 5% of people share to be seen as experts.

However, to state the obvious, starting and participating in a conversation requires having something interesting to say that the community cares about. An excellent example of this is Elevenmoms on Wal-Mart’s website. They have 20 moms blogging here. The blog is focused on a specific demographic with a very clear mandate of the type of community it supports. Try engaging with that one if you’re not a mom. The point being, in case it still isn’t clear, is that increasing N takes a lot of focused effort. As a recruiter involved in social networking, you need to figure out the engagement profile of your audience:

1. Where do they interact (or not interact)?
2. What topics get them excited?
3. What do they share?

Technology is the least useful thing here. Using Twitter is not going to help much, as the usage patterns show. There isn’t a person on the face of the planet who has enough interesting things to say on a regular basis that they deserve to be followed. Any pronouncements people make, including what they have to say about their place of work or jobs, can always be searched for the few nuggets of useful information buried in the mountains of drivel. To increase N focus on a few communities you can engage with and forget toys like Twitter. Face it, unless your last name is Spacey or Kutcher you’re not likely to have much of a following. And even if you get some, they won’t stay: Nielsen Media estimates that 60% of Twitter users stop using it after a month.

Interestingly, he had been scheduled to talk at a major HR conference about how he was implementing a hiring process free of politics. I believe it was labeled “Tilting at Windmills.” The commissioner was a political appointee, and not necessarily the best qualified person for the job. Of course he may very well have been the best candidate — the fact that the gentleman is the treasurer for a political action committee that contributed to the mayor and a key alderman couldn’t possibly have influenced his selection. Then again, he was perhaps not the best choice to be a spokesperson on acquiring talent. One might as well ask Joe Biden to speak at a Toastmasters convention.

So what exactly was the Commissioner supposed to do to make the hiring process in the Windy City free of politics? An independent review had identified some deficiencies in the city’s process that included:

• Improper interference by several departments in the screening and referral of applicants
• Failure to identify job requirements
• Failure to post job openings
• Hiring from a limited pool of pre-selected applicants
• Placing individuals previously deemed unqualified on eligibility lists

The solutions proposed included documenting all hiring related activities, communications, justifications for hires, using assessments, training managers and the HR staff on interview and selection procedures, etc.

Rolling a Rock Uphill

In Greek mythology, Sisyphus was punished by being cursed to roll a huge boulder up a hill, only to watch it roll back down, and to repeat this throughout eternity. That’s pretty much what trying to free hiring from politics is like. Even if the city had a process that addressed all those deficiencies, it would not necessarily be free of politics, as illustrated by the recent Ricci v. DeStefano decision. The case was more about political interference in hiring than discrimination. New Haven’s hiring policies and process produced a result that did not sit well with the powers that be. So the city decided to toss out the results and to find a test of “equal value” that would produce a different, and more palatable result. Letting politics influence hiring is bad, except when it’s good. To some extent, the problem with diversity in recruiting is politics in hiring, and that’s not just limited to governments.

Despite all the technology, assessments, and procedures an employer has in place, no process is perfect. Subjectivity of one sort or another invariably influences the outcome. Any recruiter who has been on the job more than a week has experienced some attempt to influence the process. To some extent this is a matter of degrees; how far does the interference have to go before it becomes unacceptable? Obviously, a person getting hired simply because of patronage is going too far, but it’s less clear when it’s not that blatant, such as when a candidate tries to use connections to improve their chances of getting hired.

There’s something hypocritical about a government claiming to try and eliminate politics in hiring, since usually all of the top jobs, and plenty of the lower ones, are filled by people chosen for their political affiliations more so than any qualifications they may have. It’s too much to expect that politics will not influence hiring in the government, but at least for leadership positions it’s important to keep up appearances and hire people who are qualified and credible. That sets the tone for positions lower down the line. For example, no one would hire a tax cheat to run the U.S. Treasury, since it includes the IRS. Oh, wait. Never mind.

But none of this means that a recovery is in the making. All it means is that the pace of decline is slowing. The good news is that there’s less bad news, but the bad news is that there’s still plenty of bad news.

Stimulus

The last 18 months have resulted in job losses equal to job gains of the previous 42 months. A recovery will require job creation of 200,000 or more per month. Right now there’s nothing to show this will occur anytime soon, despite any claims to the contrary.

Lately the President has talking about how many jobs are being “created or saved” by stimulus funds. That’s an interesting way to put it. The New York Times has diplomatically described these claims as being “unverifiable.” Considering what a big deal the administration has made about the need for transparency let’s be undiplomatic and call them what they are: BS. There is no way to measure if a job has been “saved,” and such talk only underscores the fact that the Administration lacks confidence in the ability of $787 billion stimulus package to do much. It was supposed to prevent unemployment from exceeding 8%. Well, so much for that. So far the money has largely gone into infrastructure projects, most of which do not result in permanent jobs.

The massive increases in public debt, in America and other countries, while necessary to stabilize economies, will result in sluggish growth for years. The IMF estimates that public debt in the world’s leading economies will rise to 100% of GDP by 2010 and to 140% by 2014. To put it in perspective: by 2014 the United States and other members of the OECD will owe, on average, $50,000 for each one of their citizens. No country has ever managed to spend its way to prosperity, and the massive amounts of borrowing by governments will reduce funds available to private industry and consequently limit growth. This means that the economies of most countries will struggle to realize their potential — dragged down by such large debt burdens.

What this all means is that in most of the world’s economies, the government will be the dominant source of growth — and jobs. And governments are not good at that. Recent policy actions don’t suggest otherwise. The Speaker of the House — the Honorable Nancy Pelosi — made the statement that the cap-and-trade bill could be described by four words: jobs, jobs, jobs, jobs. If government programs were so good at creating jobs and managing growth, the Soviet Union would have been the biggest economy in the world. And considering the track record of the Speaker’s home state of California in that respect, it might help to know what exactly the lady bases her claims on.

Whatever your opinion on climate change, this bill is a bad idea and incredibly ill-timed. The bill imposes more tax burdens at a time of economic decline, while expecting growth in employment from development of green technologies that are in their infancy at best. Most are years away from reaching the point where they will go mainstream enough to generate sizable numbers of jobs. There just aren’t enough jobs that will be created in the next few years making windmills and solar panels to make a sizable dent in the unemployment picture. Add to that the possibility of healthcare reform with a potential tab of $1.6 trillion, and increases in minimum wage, and one has to wonder: What exactly are policy-makers thinking?

Where the Jobs Are

Since 2008 employers in America have eliminated thousands of recruiting jobs. A lot of these are not coming back anytime soon. Perhaps the President can find a way to save some, but assuming he may not find time in his agenda to do so, recruiters looking for work should consider working for the Federal Government and employers that provide services to the government. The American Recovery and Reinvestment Act is designed to fund the creation (or saving?) of 3.5 million jobs over the next two years. Funding for government projects that will create these jobs is now starting to flow. Federal agencies that will directly create new jobs list their positions here.

To get some leads on what projects are being funded, and therefore the providers that may need recruiters, look for RFPs put out by Federal Agencies. These are all published in the Federal Register and on the individual agency websites, along with details on those being awarded these contracts.

Looking wider, companies that deal with growing economies — specifically China, India, Australia, and Singapore — will also be hiring. The World Bank forecasts that the Chinese and Indian economies are expected to grow by about 7% this year. Certain Middle Eastern countries, particularly some in the Gulf States, like Qatar, will also see growth rates of 5%. The International Labor Organization projects employment growth will be positive in South Asia and parts of the Pacific. Businesses based in these regions and doing business here are hiring. Even in Western Europe, several countries — like Switzerland — are experiencing chronic shortages of talent.

Regionally, of 381 metropolitan areas in the U.S., the 15 that are still growing are mostly in oil and natural-resource-rich regions of Texas, Oklahoma, and the Dakotas. The energy industry, in these areas and elsewhere, is also seeing a resurgence — oil-rig operators are bringing more rigs on-stream, up 25% in the last month.

This Too Shall Pass
It ain’t over till the plus-sized woman sings, and by most accounts right now she’s not even on the stage. Recruiting as a profession has been around for over 2,000 and it will survive the current crisis. The road ahead is bumpy and uncertain. There’s little to be optimistic about. Welcome to an era of lowered expectations. But recruiting is still a business-critical function.

Some of the challenges were discussed in a previous article, but in general, the reasons why people join online social networks are fundamentally at odds with the needs of employers to use those networks to find talent, and in fact an employer’s efforts to tap those networks may threaten them. Research shows that people’s motivations for using social networks are 1) to support off-line networks — people they already know well, and 2) build social capital — improve their sense of well being, self-esteem. Research also suggests that low self-esteem correlates with higher levels of online social networking.

Employees are not likely to be eager to let their employer into their networks. Think about it this way: if your boss wants to be your “friend,” then you have a problem.

Refuse and you risk insulting her. Agree, and you better watch everything you put on your Facebook or MySpace pages after that. There’s more. People’s choices of online (and offline) friends primarily reflect factors like ethnicity, age, religion, sexual orientation, etc. If the values those choices imply are not the same as those of their boss or employer, then the employee may suffer.

Social networks also hold vast amounts of personal details. Todd Raphael mentioned that a lot of people are aware not to put material that can only be perceived negatively — a photo of yourself drinking beer from a funnel — but what, he asks, about milder stuff. If someone’s profile says she’s a fan of breast cancer survivors — does that turn off some employers who think she’s sick? What if you’re a fan of George Bush or Barack Obama? How does that influence employers? On Twitter, he adds, some profiles begin with “Christian.” Does that, he wonders, cause more conservative employers to think, “I like this person” and secular, liberal employers to think “too religious”?

In one case a hiring manager said he didn’t think a candidate would devote enough time to the job after reading about the candidate’s hobbies on his Facebook page.

The Minefield

We know we’re supposed to base our decisions about candidates only on job-related information, but using social media can compromise that. There’s no case law on this; yet, but it’s only a matter of time. If it turns out that an employer heavily screened out minority candidates as a result of searching through their Facebook or MySpace profiles, then a case of unlawful discrimination could be made. Employment Law expert George Lenard says that a case for discrimination could be made even if an employer searches for similar information on all applicants but discriminatory bias affects the employer’s evaluation of the information obtained.

For example, an employer may view more negatively photos of an African American male, beer in hand, hanging out at a bar than photos of a Caucasian male, also with beer in hand, hanging out at a rock ‘n roll bar. In such a situation, was it really the public evidence of drinking or intoxication that disqualified the individual? How many current employees would be disqualified from employment if never getting publicly intoxicated — or even drinking in public — was a job requirement? It’s inevitable that these questions will be raised, and the EEOC will make an example of some employer, given how trigger-happy the agency has lately become.

Even if there is no discriminatory bias, just how reliable is the information obtained? There are documented cases of people setting up fake profiles with deliberately misleading information about others. In a competitive market there’s certainly the temptation to put out unflattering information about someone that’s a potential competitor. It’s more common on MySpace and more likely to involve teens, but what’s to stop someone older from doing the same? Can you be certain that the information you have on someone is accurate, so you don’t end up including or excluding him or her for the wrong reasons?

Lenard provides an example of a company that rejected a candidate because an executive found the candidate’s web page with this description of his interests: “smokin’ blunts,” shooting people, and obsessive sex, all described in vivid slang. It was obvious that the candidate was clearly posturing, but that didn’t matter. The executive justified the decision because he questioned the candidate’s judgment. The only person’s judgment that should be questioned is that of the executive — how did he know what he read was correct or even put there by the candidate? If the candidate’s web page had claimed that his passion was volunteering at a homeless shelter and he was looking for a solution to stop global warming, then would this executive have immediately hired him?

Also, the very act of using social networking sites for finding talent can be a source of potential problems. Facebook’s terms of service agreement states that the site is intended “solely for your personal, non-commercial use.” It’s hard to make the case that recruiting is a personal, non-commercial activity. Admittedly, the possibility of Facebook proving the violation are remote, and it’s far from clear what the consequences could be, but it’s still a violation.

Navigating the Minefield

One bank decided to stop all use of social networking sites in hiring. Apparently the bank was being “proactive about anticipating any potential issues.” This is hardly a solution. Risks that exist need to be managed and mitigated against. You don’t stop driving because of the potential of accidents. If they had the same attitude when it came to making loans, they wouldn’t have a business. Then again, they had to be bailed out with over a billion in TARP funds, so knowing how to manage risks is obviously not their strong suit.

The risks with using social media for recruiting are that the information obtained on candidates is a) incomplete, b) unrelated to the job, and c) unreliable. Incompleteness of information is not much of a legal risk; recruiters almost never have complete information on candidates.

Getting access to material on candidates that is unrelated to the job is another matter — there’s real potential for problems here. But it’s important to remember that having the information is not the problem — acting on it is. To make a case for discrimination a person has to prove that a hiring decision was made based on factors that are discriminatory. That’s a tall order and the probability that some one will sue is extremely low. Properly documenting why certain candidates were excluded and others included can mitigate much of the risk.

The real danger is that someone will exclude a good candidate for no good reason. If adverse information on a candidate is uncovered as a result of social networking, then the question to ask is if it truly represents an undesirable quality about the candidate. If it does, then the next step should be to verify that through other means. Even drug tests that show evidence of use of illegal drugs are run through a more rigorous confirmatory analysis before being declared as definitely positive. If the information cannot be verified through other means, then it should be discarded.

That leaves reliability of information. In the age of Photoshop a picture of any kind is proof of absolutely nothing unless you took it yourself. With any other information — positive or negative — it’s a good idea to be skeptical. Most online sources do very little to verify the information available on them. On sites like LinkedIn one can at least see that prospective candidates are connected to similar professionals, have recommendations, etc. — all indicative that the profiles are somewhat reliable. On sites like Facebook and MySpace the same does not apply. If you find a candidate there then it’s best to assume that all you have is a lead. There’s just too much “noise” in the media for it be anything else.

It isn’t just about not making the wrong decision but about avoiding making a stupid one by acting on unreliable information. Even on LinkedIn one can have a completely fake profile. I know of one consultant who has quite a successful practice while having a full-time job elsewhere. This person has two profiles on LinkedIn, the second under a fake name, with a full set of fake credentials, recommendations, and several hundred contacts. Think about that the next time you read anything about a prospective candidate on a social networking site.

The buzz around social networking is reminiscent of the claims made by weight-loss products. While there are some success stories, these tend to be the exception. There is not a standard template that can be used to replicate success. There are some approaches that hold promise, but a reality check is necessary to separate the hype from what’s practical.

The premise of social networking — that by getting connected to a group, a recruiter or an employer can tap into a vast pool of talent — seems logical, but it’s not quite that simple. One common fallacy is that social networks are an easy way to connect with groups of similar individuals — software engineers likely have lots of friends who are similarly employed. But there’s little evidence to support this line of thinking. There’s a lot of academic research on social networks, and what it shows is that people join online social networks 1) to primarily support pre-existing social relations, and 2) to build social capital. Research shows that a person’s network predominantly reflects factors like ethnicity, age, religion, and sexual orientation. A person’s professional interests are very low on this list; even peoples’ attitude toward children ranks higher.

Research at Michigan State University established that the single biggest motivation for people to establish or join online social networks is to maintain offline networks — that is, stay connected with people who are already their friends or with whom they have some offline relationship. That doesn’t preclude similar professionals, but those are a minority of a person’s connections. This is reinforced by evidence from Korea — the population of which is among the heaviest Internet users in the world — that some 85% of people claim that they use online social networks primarily for the maintenance and reinforcement of pre-existing social networks. There’s no reason to believe it would be any different elsewhere.

The other reason people join social networks is to build social capital — broadly referred to as the resources accumulated through the relationships among people. For individuals, social capital allows a person to draw on resources from other members of the networks to which they belong. These resources can take the form of useful information, personal relationships, or the capacity to organize groups. Access to individuals outside one’s close circle provides benefits such as employment connections. Social capital is also related to an individual’s psychological well-being, such as self-esteem and satisfaction with life.

The size of any individual’s network is also far smaller than what it may appear to be. Research by Facebook shows that the while the average number of “friends” in a Facebook network is 120, the number of people on an individual’s friend list with whom they frequently interact is much smaller. An average man responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status messages or “wall.” An average woman is slightly more sociable, responding to 10. When it comes to two-way communication such as e-mails or chats, the average man interacts with only four people and the average woman with six. For people with larger networks such as 500 friends, men leave comments for 17 friends and communicate with 10, women for 26 and communicate with 16. The smaller numbers largely represent the offline networks and the source of their social capital. So what about the hundred plus other “friends”? Lee Rainie, director of The Pew Internet & American Life Project that has done much research into social networks, has an explanation: members of online social networks are not so much “networking” as they are “broadcasting their lives to an outer tier of acquaintances.”

This is why trying to tap employees’ social networks as a source of hires is not easy. First, the network of most people is not likely to consist of similar professionals, and most of their “friends” are weak links at best — not likely to be influenced by them or even pay attention to appeals from their employers. Second, the core network of friends where they have influence will be a group that they are very protective of. As a recruiter you are not likely to be an offline connection or a source of social capital, so your chances of becoming part of those core networks are on par with those of Sarah Palin’s being invited to join the Democrats.

Another challenge is that identifying talent is not easy. The information about people on social networking sites is very limited or not particularly useful in being able to gauge their skills and abilities. Sites like Facebook and MySpace are not primarily intended to facilitate finding talent. LinkedIn is obviously something of an exception, but even there, a lot of profiles have only cursory details. Some consider the lack of information to be beside the point — these sites are not job boards (though LinkedIn is well on its way to becoming one). All that’s needed is a mechanism to connect with potential talent. Assuming that is the goal, it’s not easily achieved. So much depends on the culture of the organization, the commitment to support networking, and the willingness to accept that a lot of that effort may not produce any results on any sort of schedule.

Communities of Interest

So what can an employer do to develop and make social networking an effective source of hires? Richard Nacht, CEO of Respond Media, recommends creating a community of interest. Help establish a group of individuals with similar professional interests that find value in being part of that community and are willing to share some useful personal information in return — useful in a professional sense. An example of this is Sermo — an online community of physicians who share clinical insights and comment on challenging cases. Access is restricted and members must be active participants. There is a jobs section where physicians can post and comment on jobs. This is a close-knit group whose members are willing to share a lot of very specific information about themselves, their skills, and abilities. Contrast that with the typical social networking site where anyone can join but the information they provide about themselves can have very little value in terms of identifying their professional abilities. Creating a community of interest is not easy — it requires sustained effort an commitment and is possibly outside the reach of most employers. At Microsoft, Marvin Smith heads up the effort to do so, and has done a remarkable job but only after years of work.

The Tupperware Model

In an earlier article I had recommended using the Amway model — provide a forum for like-minded and similarly interested individuals to interact, and incentives to propagate your message, i.e., the prospect of employment. That’s an approach recommended for employers with the goal of promoting themselves as a great place to work. The idea being that the network will get the message to some of the right people who will become candidates. For individual recruiters the approach to take is that of the Tupperware party. This involves getting one individual to invite a group of their close friends to an event where the individual hosting the party promotes the company’s products. The actual salesperson is there to facilitate the event. They do not attempt to sell directly to the attendees. The reason this approach has been so successful for Tupperware is because the people at one of these parties are there to build social capital and not because of any attraction for cheap plastic utensils. Attendees at these parties are not a bunch of acquaintances who barely know each other. Most people have been invited to some such event at one time or another — how likely are you to go if the invitation came from someone you barely know?

This, in essence, is what a recruiter needs to do: be on the sidelines encouraging employees to tap their networks and participate in a small way. It’s difficult to do that with networks on sites like Facebook and LinkedIn where it’s basically in or out, all or nothing. Employees will understandably be reluctant to let an employer’s representative be their friend when the risk is that by letting them in they have full access to their core and wider network. One site that has devised a far better solution is Cachinko, that lets members create subgroups and allows employers selective access. This is a much more nuanced solution than that available elsewhere.

No Silver Bullet

Employers and recruiters alike are hoping that social networking is an easy solution to their hiring needs are likely to be disappointed. Online social networks are, for the most part, fundamentally not suited to facilitating hires, since identifying the skills and abilities of individuals who belong to them is difficult. The goals of employees in joining them are also basically at odds with an employer’s goals of tapping them for talent. It’s doable, but don’t underestimate the challenges. And regardless of what anyone claims, social networks are not the ultimate solution. They are a solution, but just one of many. A strategy to tap social networks for talent requires effort and a light touch. Employers hoping to reduce recruiting costs while finding an effective long-term solution to their talent needs should think about it like a weight-loss program. There is a lot of hype, it takes work, and individual results will vary.

There are glimmers of hope. Inventories have fallen to such low levels that production will have to be increased just to meet the current level of demand. The fall in consumption is beginning to level out. In the U.S., auto dealer and homebuilder surveys are heading up. Japanese automakers have announced production increases. A broader indicator of an upturn — JPMorgan’s global manufacturing index — posted a second consecutive gain in February, and its new-orders index is rising. A realtor friend just wrote that she has five closings this month. 5. F-i-v-e. 5. Way to go.

What Will Emerge?

Regardless of when we emerge from this situation, there are some major changes in the employment landscape that will change recruiting in terms of where it occurs and how it is done. Where recruiting occurs will depend on where there is growth — somewhat debatable but getting clearer. Where it will not occur is in finance and housing construction; they will not return to past levels for a very long time. Also, if you work in an industry that’s heavily dependent on exports, then don’t expect an upturn either. Domestic demand is also falling overseas, and countries will increasingly strive to protect their domestic industries, further reducing the need for imports.

Where?

A recovery will be weak: losses in asset values and the need to reduce debt will all but guarantee that. But there will still be pockets of growth. These will be largely in infrastructure, IT, education, healthcare, government, and energy.

Infrastructure will be an early winner because so much stimulus and other funds are being directed at it — not just in the U.S. but also overseas. In particular, India and China are channeling billions of dollars at infrastructure projects to both boost employment and enhance economic activity. That means industries that support infrastructure — heavy equipment, architecture, cement, safety equipment, etc. will see near-immediate upturn in demand.

IT and engineering are perennial job creators, and will remain a source of employment for recruiters. For the simple reason that supply cannot match demand, a problem that will be exacerbated by restrictions on companies receiving stimulus funds from hiring foreign workers. This gap is even wider overseas. In India and China, compensation in IT is estimated to increase this year by 11% and 8% respectively because of the extreme shortage of qualified professionals.

Education will see jobs growth because of three factors: 1) large cohorts of teachers reaching retirement age; 2) a massive expansion in funding for education and student aid in the current federal budget; and 3) large increases in enrollment in higher education by people unable to find work.

Healthcare is another engine of job growth. Enough has been written elsewhere on the shortage of nurses, doctors, etc. that it doesn’t need to be repeated here. The U.S. Bureau of Labor Statistics also predicts an increase in social services jobs as a swelling number of retirees check-in for medical care.

Government payrolls at the federal level will swell to accommodate the administrative needs created by the vast expansions of regulatory authority being proposed — over banking, transportation, education, labor, and healthcare. The situation is likely to be the opposite at the state level where most states find themselves facing huge budget shortfalls.

Energy in general and green energy in particular will see significant growth. Biofuels, wind energy, and solar all will benefit from new investments and tax incentives. Consequently jobs that are related — research, infrastructure, maintenance, and sales can expect to benefit. However, the number of jobs in these industries is small to begin with, so the overall impact may not be much.

Interestingly, much of the increase in employment is expected to occur in small businesses and startups. One impact of a recession is that more people start businesses because they can’t find work. With expansions in federal grants for some of the above industries, expect to see a lot of new companies emerge. Also expect to see geographical shifts in areas of employment growth. California and New York continue to shed jobs as employers move away because of high taxes and burdensome state mandates. The beneficiaries are many Midwestern and southern states that have low taxes and fewer restrictions.

Recruiting will become more difficult in this new landscape that emerges. Unemployment is not evenly distributed, and for many of the industries mentioned above there is not an abundance of unemployed talent. The employed are also less interested in changing jobs in an uncertain economic climate and will likely remain so for years. Finally, mobility for many is restricted by their inability to sell their houses. Many people will be forced to delay retirement, but that will not solve the supply problem. Many of the new jobs that will be created cannot be easily filled with skills available in the current labor pool.

How?

Changes in how recruiting is done are harder to predict, but some trends can be discerned. Given that a recovery will be weak, employers are more likely to turn to part-time and contract recruiters than have full-time staffs. This will be reinforced because much of the growth in jobs is expected to occur in small and medium-size businesses that have no need or cannot support full-time recruiters. An increase in needs for sourcing, as opposed to full-service recruiting, will occur as employers seek to minimize costs.

Technology will need to adapt. The major boards are not designed for use by the occasional recruiter. It’s likely that products and services targeting small-businesses will be where we see most changes in recruiting technology.

The Legend of the Phoenix

What we’re experiencing is known in economic theory as creative destruction. Jobs are destroyed and new ones emerge. In the past it has been a somewhat gradual transition, but not this time. In past downturns the mood has never been so sour. In 1990 and 2001 most saw the recession as a slow-down, a readjustment, perhaps even a necessary realignment of the business cycle — something to be concerned about not a lot. The future was bright. After all, this is America. But this time is different. It shows up in many little ways. Several people I know have asked that we use Skype to talk to lower their phone bills; that they’ve cancelled their magazine subscriptions and only read online; that they’ve changed their home page from CNN to the BBC because there’s less negative news. Larger numbers of friends than I’ve ever seen are online late at night and available to chat. Someone I know to be an eternal optimist wrote to me that the American dream was an illusion and they don’t believe it in any more. Much has gone wrong if it has come to this.

This time it’s like the legend of the Phoenix. It lives for a thousand years and once that time is over, it builds its own funeral pyre, and throws itself into the flames. As it dies, it is reborn and rises from the ashes to live another thousand years. We’re at the end of the thousand years.

The recently passed “American Recovery and Reinvestment Act of 2009,” aka the stimulus bill, includes a provision that restricts companies receiving federal bailout funds from hiring immigrant workers on H-1B visas. This provision was added by senators Charles Grassley, from Iowa, and Bernie Sanders, from Vermont. Considering that engineers, scientists, and immigrants with advanced degrees are generally falling over themselves to get to those two hubs of technological innovation and economic growth, one can understand the motivations of these lawmakers. They clearly have an informed perspective that most others lack.

The Last Refuge of a Scoundrel

One would hope that the Messrs. Grassley and Sanders had done their homework, but that would be giving them too much credit.

Their basis for this provision is an Associated Press story that claimed that banks that had accepted federal bailout money had tried to hire thousands of workers from overseas, at a time when they were cutting U.S. workers. Stuff like this is like a red flag to a bull — especially when the bull might be looking at a tough reelection and has a need to burnish his pro-American credentials. Never mind that the story was grossly inaccurate or just flat-out wrong. The reporter counted up visa applications from a dozen banks and found more than 21,800 over six years. Trouble is, he never bothered to find out how many of the visas were approved, much less how many immigrant workers were ever hired.

Further investigation revealed that none of the 12 largest banks receiving bailout funds had actually hired substantial numbers of foreign workers. An analysis by the Kansas City Star revealed that one of the largest banks — Bank of America — hired just 66 such workers, of which 51 were for its global equities arm. With a workforce of 210,000 that represents 0.03 percent being immigrant workers. Details, details.

To give the two gentlemen their due — this was political grandstanding at its finest.

The measure was tabled as a separate motion and approved by a voice vote. It would take special courage for a senator to be caught on camera voting against a measure labeled “Employ American Workers Act.” The esteemed lawmakers and others of their ilk have been known to claim that it is intent that counts — that the banks and other employers, if allowed to do so, would hire as many immigrant workers as possible at low salaries, to save a buck.

There have been abuses of the H-1B program but there is no evidence that these are pervasive. Rest assured if there was even a hint of widespread abuse by any large employer or industry then some state attorney general or U.S. Attorney would be investigating it. Immigrant workers make up less than 3% of the professional labor force. Hiring one is cumbersome, expensive, and difficult. An employer that does so has usually exhausted other options. Anyone who thinks otherwise should file an H-1B petition themselves and experience the pleasures of dealing with the bureaucracy responsible for approving work visas.

Risking our Future

This highlights a fundamental problem that is developing in U.S. immigration policy. We are increasingly frustrating the efforts of highly qualified talent from reaching us. This may seem to be a contrarian view in the midst of a deep recession, but this type of legislation is incredibly short-sighted and can have serious negative consequences. There’s also the question of who exactly is supposed to benefit from it? The vast majority of immigrant talent that gets hired on an H-1B visa includes scientists and IT professionals. As of the end of January the Bureau of Labor statistics reports an unemployment rate of 4.8% for employees in those categories. That doesn’t quite show that there’s an abundance of talent available.

I’ve written about this in the past, but the point needs to be made again that our needs for talent will continue to grow, as will those of other countries that are not sitting idly. The White House’s just released economic forecast along with the budget predicts that the U.S. will see economic growth of 3.2% next year, climbing to 4% by 2013. To put that in perspective: for that to occur the economy will need to be adding over half a trillion dollars in GDP every year by 2013. Whether that actually happens remains to be seen, but the growth is not going to come from Vermont and Iowa. Last time I checked, milk and corn were not high-growth industries. Our centers of technology and innovation will suffer disproportionately from the reduction in visas.

One may think that domestic supply will easily make up the difference, but that would be the wrong conclusion to reach. There is not an abundant supply of talent — domestic or foreign — to fuel the development of new and high-growth industries such as bio-technology and alternative energy. If we put up barricades, then the talent will simply go elsewhere. If Intel founder Andy Grove or Yahoo founder Jerry Yang had not come here they could have built their companies in other countries — and increasingly there are plenty of other countries that would welcome them.

There is some recognition that sanity needs to prevail. Senator Chuck Schumer has publicly vowed to overturn the H-1B restrictions. Some cynical types have claimed that he was influenced by the fact that a lot of banks receiving bailout funds were contributors to his campaign war chest, but I’m sure the gentleman’s motivations are pure. To suggest otherwise is insulting to the man.

But the fundamental issue remains that our immigration policy is deeply flawed. It has not fundamentally changed since the 1950s and does nothing to attract high quality talent. The process to obtain a visa or green card is a convoluted mess, tangled up between various governmental agencies — none of whom has any view of the big picture or any incentive to make things better. While our legislators pass laws on transporting chimps (the primate safety act), other countries focus on streamlining immigration procedures and simplifying the requirements for professional talent to reach them. Without major changes we stand to lose our edge in innovation, and jeopardize our future.

The word “social” has many definitions, but some of the more appropriate ones are 1) pertaining to friendly companionship or relation; 2) Seeking or enjoying the companionship of others; and 3) living or disposed to live-in companionship with others rather than in isolation. The point being that people use social media as a two-way street and to get a sense of community. To belong to a community one has to have something to contribute and be accepted as a member. A community is people interacting with each other. It requires free flow of ideas and thoughts. None of that is delivered by a corporate web page, which is essentially static. People do not invite companies to be their friends. The same is true for recruiters wanting to get hires off Facebook. Creating and cultivating a network to the point where one actually has a hire can take a long time, and the ROI can be impossible or very difficult to justify. It’s not possible to say that X number of hours spent networking will result in Y number of hires and it is not a replicable model.

The Amway Model

There is a very successful and proven approach to tapping the potential of social networks. This has been around for decades before there was Facebook. Companies that operate using network marketing — such as Amway, Avon, and Mannatech — build and work their networks by providing a little structure and the messages they want delivered along with incentives to get the results they desire. They know that their networks exist and thrive where they become communities. They are not clubs where anyone can buy a membership and get the benefits. The people that succeed at network marketing emphasize the social component. The same is true of Facebook. Active members have built their networks to form communities they want to be part of. It’s a two-way street, with lots of interaction, dialog, and sharing — elements that have been true of communities since there have been communities.

Employers wanting to tap social media for talent need to recognize and respect these realities. It’s not about putting up a web page — it’s about what you have to contribute. Therefore it’s easier to tap the networks that already exist — those of employees. Employees can be encouraged to write about their employer, their experiences at work, things the company is doing that may be interesting to others, and so on. Some ERP systems now offer functionality that allows an employee to directly post jobs to their Facebook page. But this requires flexibility and giving up control over what gets put on those Facebook pages along with the job postings. Many employers are accustomed to having all communication beyond the firewall restricted to the boring drivel put out by the PR department. The idea that employees can be writing, blogging, and putting out stories about their employer without review can give many an HR manager an acute case of dyspepsia.

I had one such experience where a company I worked with was so shaken by a blog posting I wrote that was critical of someone, that they created an entirely new corporate policy requiring all employees to have everything they wanted to put on a blog, a website, or any other medium approved or risk termination. Of course, not everyone is as paranoid or PC as this bunch — they would be uncomfortable about any writing that was critical of Bin Laden, on the outside chance he’s really a nice guy who’s been framed or badly misunderstood.

Don’t Kill the Goose

Succeeding at tapping social networks as a source of talent requires participating or contributing to what makes them popular. Many recruiters have limited time to create their own networks or spend time blogging. But in either case what employees do will be far more effective and, more importantly, far more credible and therefore better received than any hype that marketing can spin about the paradise that exists inside the corporate walls. This isn’t exactly a new idea — some employers have long allowed candidates to talk to current employees without any monitoring of the conversation to get a true sense of what it’s like to work there.

Trying to control or restrict that is an exercise in futility, better described as tilting at windmills. Of course that never stopped employers and others from trying. Employers tried for years to restrict their employees’ use of the web out of the fear that they would just waste their time, before finally giving in, by which time mobile devices had made the restrictions irrelevant anyway. The same will be true of social networks — the desire to control the lives of others is deeply ingrained and anything having to do with the web seems to turbocharge it — just look at China and most of the Middle East. Of course, as all that try it have discovered — such actions result in equally forceful opposition.

By embracing social networks and encouraging employees to talk up their employers, warts and all, any employer can turn their workforce into a big referral program that will dwarf any effort the recruiting organization can manage on their own. The key is to recognize that social networks exists first and foremost for the benefit of their members — to provide them a sense of community and meet their social needs. To reiterate — the value provided by a social network is that it is social. An employer that can’t understand this simple concept should best stay away from trying to tap social media.

The Chinese can put up some amazing numbers — and not just those having to do with the ages of their gymnasts.

The Middle Kingdom produces over 2.5 million college graduates, including 30,000 Ph.D.s and 650,000 engineers, every year. But employers looking to fish in this ocean of talent will find that there’s a lot of cuttlefish along with the bass.

Graduates of the top schools compare with the best in the world, but wander a little further away and the quality of education becomes questionable — by one estimate over two-thirds of the engineers are no better than technicians. This is a particular concern with private schools, most of which haven’t yet established their credentials but often team up with top-flight state-run colleges to attract students. Despite rules enacted by the Education Ministry that require these schools to issue diplomas under their own names, instead of the name of the better-known institution, violations are rampant. When evaluating academic credentials it becomes critical to find out where a person actually studied.

China’s educational system relies heavily on “memorization,” meaning that skills such as creative writing, public speaking, teamwork, and leadership are not taught well in most of China’s universities. A study by The Conference Board concluded that the “learning by rote” culture of the Chinese education system means its graduates often lack the practical experiences and softer creative and leadership skills required in the modern business world.

The Legacy of Mao

A half-century of communism has had some effects on Chinese society that Marx (Karl, not Groucho) likely never imagined. With the state controlling every aspect of their lives, many people find it difficult to do anything that falls outside their defined responsibilities. Many managers find that employees never attempt to work on anything not directly concerned with their specific role. Recruiters must be extremely explicit in explaining a job description and attempt to cover all the tasks that the job could require. And jobs that require a lot of creativity may be difficult to staff.

Another legacy of communism is a generation of only-children. China introduced the one-child policy in 1979 in an attempt to control the population. A generation of children with two parents, four grandparents, and no siblings is now of working age. Never having interacted with siblings and studying in an education system that does not emphasize group activity, many cannot see themselves as others do and have a grossly inflated sense of self-worth. So jobs that depend on teamwork need to be very well-managed, since many employees are unaccustomed to working in groups.

While educated Chinese workers are generally, bright, urban, eager to work, ambitious, and dedicated, multinationals also report a range of common problems. These include poor foreign language skills (especially spoken English), education that was often too theoretical rather than practical, a lack of experience accompanied by an expectation of high salaries, rapid advancement, and frequent job-hopping.

Not Enough Chiefs

Despite the abundance of talent, leadership and managerial skills are in short supply. Mid- and senior-level talent often has to be brought in from the outside. Chris Gootherts — International Staffing Manager for Microsoft and an expert on recruiting in China (a source for some of the material in this article) — has built a process to recruit high-level talent to China, since local talent is unavailable. The Conference Board study mentioned above found that the number of people aged 40 and over was not generally well educated, and did not constitute an adequate pool of talent for companies. But, those in their 20s and 30s have high levels of educational attainment and are hungry for responsibility, position, and the trappings of success in order to support not only themselves but also their aging and large extended families. That’s both good and bad — while willing to take on challenges, they will also readily move between employers in order to get a bigger salary, more status, and more opportunities: in other words, high turnover.

China’s growth has been primarily built on manufacturing. Seasoned talent in other industries is hard to come by. For example, in software development, it’s difficult to find anyone with more than four to five years of experience. Unlike India, which has been an IT hub for over 20 years, the range of skills in China tends to be limited. There are some extremely bright and talented people working in R&D labs run by the likes of Microsoft, Cisco, HP, and others, but IT talent that has experience with the full-range of product development is limited.

Conclusion

China has a lot of talent to offer, but the market remains competitive, and recruiting requires a great deal of effort and preparedness. Microsoft needs to screen 25,000 college graduates to fill 200 jobs. Despite the economic slowdown, wages in China are predicted to rise by 9% in 2009 and even more in specialty areas. Another quote attributed to Sun-Tzu (or maybe it was Dustin Hoffman in Kung Fu Panda) is, “Substitute leisure for labor.” It means choose the time and place of battle, and be prepared.

On the positive side, many Indian universities — like the Indian Institutes of Technology and the Indian Institutes of Management turn out some of the best technical and managerial talent in the world. There are also a host of second-tier schools that provide excellent graduates. And with the multinationals like Microsoft, P&G, HP, Satyam, Wipro and others having been established in India now for some 20 years, there’s a good-sized pool of experienced talent as well.

But all this comes at a price. Three factors in particular make recruiting difficult. These are:

Unreliability Of Resumes. A recent study by KPMG found that about 60% of employers complain about resume fraud and fake credentials among significant numbers of applicants. Five percent of companies have reported losses exceeding $2 million as a result. The situation is such that many universities are now starting to embed RFID chips in their diplomas to prevent fraud.

Hiring Losses. The Indian Chamber of Commerce estimates that one in three candidates who is offered a position and accepts does not show up for employment. This is partly the result of employment practices that can require an employee to have a long notice period — exceeding two months in some cases. That allows candidates a long-time to shop offers around or for their current employers to convince them to stay.

Uneven Quality. While candidates from top-tier Indian universities are equal to the best in the world, the quality drops off significantly with candidates from second- and third-tier schools. Employers often find that their interview to hire ratios are typically 10:1 or higher.

Employers also complain that employees have a very mercenary attitude, and leave their jobs for even small increases in pay elsewhere. A lot of this can be explained by understanding the cultural and economic conditions that exist in India. India is a poor country (GDP per capita is $2,600). Only about 10% of the population of 1.1 billion works in the “organized sector,” i.e., regular, stable employment with a private or public sector employer. The rest are self-employed or farmers. The IT and outsourcing industry collectively employs only 4 million people. In the scheme of things, that’s very little. A job in the organized sector is a ticket out of poverty, but requires a good education, which is difficult to come by. As an example, the ITs have a selection ratio of 1:60. Having the smarts to qualify in the entrance tests usually requires a private education, because the public education system leaves a lot to be desired. Consequently, the temptation to fake credentials is huge.

As to hiring losses, call it the revenge of the nerds. While frustrating, it’s perfectly rational economic behavior. What many consider a small increase can be substantial in India. An experienced SAP developer in Bangalore makes about $25K to $30K. The same job pays over a hundred thousand dollars in the U.S. So an SAP developer in India who’s offered an additional $3K would be foolish to not consider it, and irrational to not accept it. It’s not that people are mercenaries, it’s that they are not irrational fools.

Evaluating the quality of education is particularly challenging, because there is not a standard ranking. There are all kinds of lists but none that match the credibility of the one by U.S. News and World Report or BusinessWeek. The best institutions are well known and acknowledged as such, but the quality of education at second- and third-tier schools can be anyone’s guess. A study by the McKinsey Globe Institute had determined that of the 350,000 engineers Indian universities graduate, almost two-thirds are no more than technicians. The same is likely to be the case with graduates in other categories.

So there is top-flight talent available, but it isn’t just there for the taking. The best tend to gravitate to the brand-name employers. For others an active sourcing effort is needed to be successful. Posting on job boards in India is about as effective as it is here. But then no one said it would be easy. Dick Whittington eventually became the Mayor of London, but it wasn’t the day after he arrived.

Judging by what’s on display and what’s being discussed at some other HR tech conferences I’ve been to, HR technology appears to be geared more to the past than the future.

To be fair, technology products tend to be lagging indicators of needs, and HR technology is no exception.

Having said that, the lack of vision for products is substantial. Most of what’s on display at conferences is reminiscent of a Sears appliance showroom — lots of similar products in a few categories, with little changing from year to year. Truly interesting products are about common as a pro-McCain story in the New York Times. We’re still seeing products that have not fundamentally changed in 10 years. That gets reflected in awards — a few deserve them, but most seem to make it just to fill out the list. One company managed to win an award for a product that was just a repackaged product from another company. This is why the Nobel committee has never shown much interest in establishing a prize in this category. But that doesn’t stop people from coming. But that doesn’t stop people from coming to look at products. I’m reminded of the story of the small town where the high school football team had never won a single game, yet the stadium was always packed. When someone asked why people went the response was “just in case they do.” That sums up the situation with HR technology — there’s the hope that we just might see something interesting.

This year there are a few products that deserve recognition. The first is Talent Drive; this product solves the extremely common problem — one faced by every recruiter — of having multiple sources to search but no easy way to do it. Talent Drive integrates all job boards a recruiter subscribes to, along with hundreds of free ones, and allows them to be searched from a single, elegantly styled interface. Results are aggregated in one location and resumes can be matched to job requirements and ranked. Best of all, the product allows a user to create a single search requirement that is adapted to all the boards. The efficiency and productivity gains are significant. There have been others that have tried to do this, but not well. This product is designed for that neglected group of people — recruiters. We hear a lot about serving the needs of candidates (the Web 2.0 experience), and hiring managers (making ATS reporting simple), but little about those that do most of the work. Talent Drive one of the few offerings that actually makes their life easier.

Prophesy from eQuest is another. The product lets a recruiter analyze the effectiveness of job boards and provides a variety of metrics related to candidate responses. Now in its third version, Prophesy can allow an employer to focus its spending where it provides the most value.

A third product that I’d like to mention is Value Networks. This product would not be generally associated with talent management, but it can make a big difference to an organization’s talent strategy. Value Networks allows an employer to visualize and understand the informal network that exists in every workplace — that is, the real organization chart. This can help an organization understand how information really flows and who contributes value, which may be completely unrelated to their title or position within the organization. It helps highlight vulnerabilities and devise strategies to optimize information flows. The implications for talent management are obvious — talent strategies should be shaped based on an understanding of the value network, creating and filling positions that help optimize information flows.

These products have two things in common. One, they deliver tangible value that goes beyond automating a process, and can be measured in dollars and cents. In that regard they are very appropriate given the current economic climate. Second, small companies developed them. Real innovation is never a hallmark of any major vendor. Admittedly innovation in technology in general, and software in particular, is difficult. The U.S. Patent Office issued more patents to products in the category of hunting, fishing, and vermin removal in the last year than to software products in the entire 20-plus years that patents have been available for software. But it’s not impossible — as these three have demonstrated.

So if you’re looking for the future of HR technology the product bazaar may not be the best source of information. Perhaps another fixture of conferences — the obligatory “expert” panel — might help. Trouble is that what gets said is mostly of middling quality, based on spin put out by vendors, and dominated by discussions of what the majors are doing. You hear statements like “Vendor X is continuing to fill in their functional gaps and looks poised to take advantage of web 2.0.” Look at the content and the same could be obtained with a few keystrokes on Google. Truly innovative products are almost never discussed because the vendors are too small to tithe, er, subscribe to analyst firms.

There’s also the simple fact that the “experts” don’t use most of the products they are discussing and in general see too many demos to get anything but the most cursory understanding of them and the value they offer. They do have some insights into the situation that specific vendors are in and their likely future, but that is not stuff for a panel discussion. Few have the courage to make predictions about the future — better to say something innocuous couched in jargon to make it seem important, and be right than to make a bold prediction and be wrong. Sitting in on one of these is not unlike being stoned to death by popcorn.

I’ve long said that conferences having to do with HR technology should be on the same schedule as the Olympics. There really isn’t that much going on in the interim that necessitates having these more frequently. Let’s face it, despite whatever we may think of ourselves — this is HR, not astronomy or bio-tech. We’re not finding new planets or sequencing genomes. Then perhaps we’d see many more interesting products that really merit an award that’s worth something. Right now it’s like getting a hole-in-one — in mini-golf.

The Australian Parliament recently eased immigration laws with a goal of attracting more high-skilled labor. This was in recognition of the fact that given past and future decreasing birth rates coupled with increasing demand for skills will make skilled labor the quintessential scarce resource for the next fifty years. In this hemisphere Congress wisely spent the time passing resolutions recognizing July as National Watermelon Month and declaring soil an essential natural resource (it’s about time).

Change We Don’t Believe In

Complacency about attracting high-skilled talent can have severe negative consequences. The Bureau of Labor Statistics projects a growth of 40%, or over 500,000 new jobs in IT-related positions through 2016. Domestic supply is not enough to cover this need at current levels. The number of degrees granted across all IT-related categories is about 54,000 annually, and trending downward. Adding to the supply-demand gap is that the number of workers in the 55-and-older group will grow by 47% in the next eight years — approximately 5.5 times the 8.5% growth of the labor force overall, with significant numbers looking for early retirement. The direct impact of this is a reduction in GDP of several hundred billion dollars and billions in losses of taxes to the government. Indirectly, the impact from lesser innovation and output will only magnify these losses.

While our legislators seem to be gorging on spiked watermelon, other countries are treating issues relating to talent with far more seriousness. Many countries have liberalized their immigration policies for high-skilled talent. That poses a major challenge to America’s historic domination in innovation and attracting high-skill immigrants. Australia, Canada, and New Zealand are the most aggressive; they conceive of immigrants as a source of economic growth, and consider highly skilled immigrants to be especially valuable contributors. Accordingly have long-standing immigration policies to attract them.

While a disproportionate number of skilled immigrants still come to the U.S., the numbers that are staying home or are going elsewhere is increasing. Over the last five years, the U.S. attracted an average of 73,000 skilled immigrants annually, down from about 107,000. That may still seem like a lot, but Canada attracted 56,000, Australia 20,000, and even tiny New Zealand managed to get 10,000.

The U.S. has had an extremely muddled approach to immigration and has done little to tilt the balance towards attracting high-skilled talent. As a consequence, barely 22% of immigrants are high-skilled workers. Other countries typically seek to have the highly skilled comprise 50 percent or more of total permanent immigration; the most recent figure for Australia was 65 percent.

The Audacity of Dopes

A big reason for lack of progress on changing immigration policies has to do with misinformation and myths pertaining to immigrant labor. Some stems from ignorance and some is nothing more than naked bigotry perpetuated by anti-immigrant groups. Some self-styled “experts” will indulge in any amount of demagoguery to further their agenda. For example, among the more ludicrous claims is that no education is required for any IT job; any programming language can be mastered in 30 days; and scientists and engineers possess no special skills.

These people often manage to find outlets for their rants, on certain news shows and even in hearings before Congress. The evidence they present tends to follow a fairly predictable pattern. It involves dubious statistics peppered with stories designed to evoke sympathy for their cause. A recurring theme is the case of some poor waif, who despite being brilliant, having excellent skills, and a great personality, is unable to find a job deserving of him. The sole reason for this unfortunate’s sufferings are all those employers engaged in a conspiracy to deprive anyone of a job if they can save a buck by finding a poor immigrant to do the work. What never gets mentioned is that immigrant workers make up less than 5% of the high-skilled workforce; in fields like IT, unemployment averages about 3% and wage growth has been consistent at about 3.9%. In fields like architecture and certain types of engineering, unemployment has averaged under 2%.

These numbers belie any claims that immigrant workers have negatively impacted employment or wages. Exceptions can always be found that prove the rule. The reasons a particular individual, despite being seemingly qualified, is struggling in finding employment is usually not because of a conspiracy among employers — it could be a case of misplaced expectations, a mismatch between the person’s skills and available jobs, or just an ability to interview well.

There are a lot of extremely talented and highly qualified automotive engineers who are out of work, but not because their jobs were filled by lower-paid immigrants. If there was even the smallest shred of evidence to support a claim that employers are systematically engaged in hiring immigrants to discriminate against citizens, then rest assured some state attorney-general would have turned it into a cause célèbre in her quest to become governor.

Losing the Edge

It isn’t just in attracting high-skilled immigrants that we’re ceding ground to other countries. The ability of the United States to attract foreign students is also deteriorating. The flow of students declined by about 70,000 per year after 2001, or some 25 percent, and rose elsewhere — in Australia, New Zealand, the U.K., and Canada. And this is likely to worsen as more countries enter the fray. We have no coherent national policy in regards to talent – either for developing or attracting. Without changes in our approach to talent, this is rapidly becoming a zero-sum game where there will be winners and losers.

Some of this was inevitable in a post-9/11 world. But we seem to have moved too far in the wrong direction, while ignoring the fact that other countries are not sitting idly by. Demands by industry that the number of H-1B visas available should be linked to gaps in supply and allocation of Green Cards should be tilted toward skilled workers are largely ignored. Then again, employers could just sign employees up for 30-day courses in programming and engineering.

But a successful negotiation doesn’t mean coming out on top with a low-ball offer that gets accepted. That can cause the candidate to get turned off and in the worst-case result in the candidate walking away. Even if accepted, it could leave the candidate with a sour taste in the mouth and essentially starting off with a negative attitude toward the employer. An overly generous offer on the other hand is a waste of the employer’s resources and can upset internal equity. Getting it right is not easy as few recruiters are trained in negotiating.

The number of books that have been written on negotiating can fill a large room — several thousand are in print. But an easier approach can be discerned from recent research at Northwestern University. A study by Prof. Adam Galinsky and his colleagues suggests that a powerful way to influence the outcome to be closer to a win-win situation is to view the situation from the candidate’s perspective — also know as the perspective-taking approach.

What this means and how it works is explained below, but the research has demonstrated that recruiters using such an approach consistently achieve the highest level of economic efficiency, without sacrificing their own material interests. They produce a better overall outcome for both sides.

Getting Inside the Candidate’s Head

The perspective approach means try to get inside the candidate’s head. To achieve an understanding of the candidate — their motives and likely behaviors — consider the world from their viewpoint. Basically, put yourself on their side of the table. This is not as ridiculous as it may appear. The research demonstrates that recruiters adopting such an approach achieve the best possible outcome close to half the time.

To be able to do this well recruiters need to do their homework before arriving at the negotiation. First, have an understanding of the likely issues. These always fall into three categories.

1) Distributive: issues for which the parties’ preferences are diametrically opposite. For example, the candidate wants a higher salary and the recruiter wants to pay a lower one.

2) Compatible: issues on which the parties’ preferences are identical. For example, the job location.

3) Integrative: issues on which the parties have different high and low priorities. For example, bonus and vacation time. The candidate may care more about the bonus amount because of a belief in her own ability to earn it. The recruiter may care more about getting the candidate to accept a smaller amount of vacation since that represents guaranteed income.

The solution to the disagreements is not to split everything down the middle, but rather to try and maximize the joint outcomes. That requires having a good idea about what makes the candidate tick — taking their perspective. Recruiters need to make an effort during the interview process to gauge what is important to a candidate. An assessment can help to fill out the picture, but even without that it’s important to pick up cues about what drives a candidate. That does not mean to ask questions that are unrelated to the job, but to probe for what a candidate considers important or not.

Head not Heart

There is a danger that a recruiter attempting to take the candidate’s perspective may end up empathizing with them — that is, show compassion for the candidate’s situation. Successful negotiation, especially where economic outcomes are involved, do not require having an emotional connection with the other party. The research demonstrated that empathizing recruiters achieved the poorest individual outcomes, and the gains went almost entirely to the candidates.

It’s better to “think for” than to “feel for” the candidate. It is more beneficial to get inside their heads than to have them in your heart.

Conclusion

Taking the perspective approach is easier said than done. It requires serious effort to try and understand a candidate, based on a lot of information that may not be readily available to the individual handling the offer negotiation. The more people who are involved in the selection process, the harder this gets, especially since most interviewers do a poor job of documenting what they learn about a candidate. Recruiters may also be constrained by the extent of flexibility they have in negotiating particular issues.

That being said, the Galinsky research does show that a failure to take a disciplined approach to an offer negotiation will produce a poor outcome for all concerned. Ultimately, organizations that fail to recognize this will suffer the consequences of losing good talent.

What few people know (and maybe even fewer care to) is that currently a fashion model coming to America has to compete for the same H1-B visas that every immigrant software engineer and developer does. This is a crisis. Summer is upon us and what are the editors of swimsuit editions supposed to do when visas run out on the first day they are available — take pictures in France and Photoshop in a background from California? Fast action is needed. Disaster looms. The fantasy lives of millions of teenage boys and voyeurs are in jeopardy.

Enter Anthony Weiner. The congressman from New York is riding (or taking the subway) to the rescue. Representative Weiner has sponsored a bill in Congress that would create a separate category of visas for fashion models, the P-4. If passed, the beauties would not be competing with the geeks and we can all breathe a collective sigh of relief. Weiner for President.

Jokes apart, the Weiner bill — HR 4080, does highlight a fundamental problem with U.S. immigration policy. With regards to talent we have no policy. What we do have are immigration laws dating to the 1940s that have been sporadically modified without much of a plan or any broader understanding of the strategic implications. That made little difference in the past with the U.S. being the best and, to some extent the only, destination for skilled talent.

While the U.S. is still a very attractive place, alternatives are emerging. I wrote about this in a recent article on increasing competition for talent from the European Union and other countries. The Blue Card program created by the EU is explicitly targeted at skilled workers, unlike the Green Card, which is predominantly a vehicle for reuniting families. Our immigration policy does little to attract high-caliber talent in fields like technology and sciences and does not differentiate much between categories of talent. There are no strategic underpinnings to support employers in the war for talent.

Take the H-1B program as an example.

The number of visas available — 85,000 — is an arbitrary number with no basis in demand. It has not been adjusted despite the fact that unemployment among high-tech workers is about 3% and there is no evidence whatsoever that skilled immigrant workers have any negative impact on the wages or the employment of domestic workers. Worse yet, H-1B visas are now allocated by lottery, i.e., at random. Need or the value of particular skills is not a factor.

Limited Options

There are some options available to employers frustrated with the situation. L-1 visas are one. These allow a company to transfer employees to the U.S. from their offices abroad for periods of up to five years. Employees must have worked for the company for at least one year before an L-1 can be issued. Unlike H-1Bs, there is no cap for L-1s.

Another option is the EB-5 program. Richard Herman of Herman Associates appraised me about this. Under EB-5, foreign investors can receive a green card if they invest at least $500,000 in a designated “investment center” and create 10 direct or indirect jobs, or $1 million outside the center. There are 10,000 green cards available under the EB-5 program, but only a small fraction get used; last year the program benefitted just 779 individuals. The program follows the lead of similar programs in Australia and Canada. That is why Microsoft has a development center in Vancouver that attracts a lot of talent.

Some communities are using the EB-5 program to create areas designed to attract immigrant talent —high-skill immigration zones. The Cleveland Council on World Affairs is leading a pilot initiative called the Talent Blueprint intended to bring together public and private entities to collaborate around the attraction of foreign talent and capital into Northeast Ohio. The region has over 10,000 openings for workers in fields related to bio-tech. Richard Herman and his associates are circulating among a large group of national thought and policy leaders the idea of Cleveland and other Rust Belt cities creating these zones to welcome both foreign talent and capital back to communities once known for their large immigrant populations that have now seen that high rate of immigrant influx migrate to places such as Atlanta, Silicon Valley, and Raleigh-Durham.

No Easy Solutions

The options described above are good ideas but they can have a small impact at best. The problem of talent shortages needs a comprehensive solution in terms of both domestic policy and immigration. But there is no one leading such an effort. Ideally there would be a cabinet-level position focused on talent. The Bureau of Labor Statistics projects 1.64 million job openings for IT professionals between now and 2016. Yet, despite all the evidence that problems of supply are worsening, immigration policy for skilled talent remains entangled in political posturing and colored by issues of illegal immigration.

Organizations like FAIR and the self-styled Center for Immigration Studies, which make no differentiation between an agricultural worker and a software engineer, drum up wild theories about a gigantic conspiracy between employers to hire immigrant talent at-below market rates and deprive domestic workers of jobs. One of their more popular claims is that there is sufficient supply of domestic workers for high tech jobs. It’s difficult to square that with the fact that undergraduate enrollment in computer science programs has been in near free-fall since 2000, down by almost 50%. Another is that large numbers of H-1B visa holders become illegal aliens. But all that rhetoric does have some effect. When NAFTA was passed, the TN visa category was included only after the White House accepted demands that Mexican professionals not be given the same preferential treatment as Canadians. It took until 2004 to remove this bow to what some commentators described as the Titanic principle (first class gets better treatment than steerage).

The recruiting industry is not in a good position to influence this situation. The industry is not an organized lobby. No lobbying firm represents recruiting interests in Washington, while even North Korea and Ultimate Fighting are represented. Then again, it may not help much. Congress usually has matters of far greater national importance to deal with — such as investigating the New England Patriots for stealing their opponents’ signals, and the recently passed Primate Safety Act to ensure the proper treatment of monkeys.