See who is already coming to #socialrecruiting summit in November!
Tag: layoffs
Two labor-related reports this week offer no evidence that the recession Wall Street believes is over really is, at least so far as workers are concerned.
The Conference Board’s monthly Help-Wanted OnLine Data Series reported that online job postings dropped by 83,000 in October. The number of newly posted jobs dropped by 24,000. keep reading…
A new study from Watson Wyatt has pretty good news for employees who miss their old salaries and 401(k) matches, and shows that employers are just as worried about keeping people as they were before everything went all haywire on us.
Let’s start with retention. Take the percentage of surveyed employers (26%) who now say they are “significantly more concerned” about retention of key employees than they were before the economic crisis hit and the percentage (39%) who are “slightly more concerned” — add them together, and you find that almost two-thirds are more concerned about top-talent retention than before.
On to salaries, benefits, hours, layoffs, and hours. keep reading…
Economists expect that tomorrow’s jobs report from the U.S. Bureau of Labor Statistics will show 175,000 jobs were lost in September, the smallest since July 2008.
A Bloomberg survey also says economists expect the unemployment rate to rise to 9.8 percent, the highest since 1983. An ADP report released this morning foreshadows the lower, yet still continuing job loss. The ADP 
National Employment Report says the U.S. lost 254,000 private, nonfarm jobs in September, a drop of 23,000 from the revised August jobs report. It’s the lowest drop that ADP has recorded since August 2008.
Government economic reports released today showed the tentativeness of the U.S. recovery. A Commerce Department report said consumer spending in August was up 1.3 points, the biggest rise in eight years, and the fourth increase in a row. But fueled as it was by the Cash for Clunkers program, economists warn not to expect anything similar when the September results are reported at the end of this month.
Meanwhile, the Monster Employment Index, also released this morning, was down two points from September, while yet another report, this one from the Labor Department today, said 551,000 first-time claims for unemployment were filed last week, 17,000 more than the previous week and 20,000 more than the consensus of the 41 economists polled by Bloomberg.
Then there is the report from Challenger, Gray & Christmas which says fewer layoffs were announced in September than in any month since March 2008. The 66,404 layoffs tallied in the report are 10,000 fewer than in August and 30 percent lower than in September last year.
Today’s reports prompted the New York Times to start its story this way: keep reading…
New surveys this week are stoking optimism that the worst of the worst recession in (insert your choice of years here) really may be behind us.
The Conference Board, which issues some of the most watched economic indicators in the U.S., reported that consumer confidence jumped 14 percent between July and August. The Index, which hit a low of 26.9 in March, has more than doubled since then and now stands at 54.1. It’s still slightly below the 54.8 posted in May, but the rise was considerably greater than the 47.9 economists had expected, according to Bloomberg News.
Employers mirrored that confidence in a CareerBuilder / Robert Half survey that said 53 percent of businesses polled plan to hire full-time workers in 2010. The Employment Dynamics and Growth Expectations Report prepared by the two companies found 40 percent of employers planning to hire temporary or contract workers and 39 percent expecting to hire part-time workers. keep reading…
Last week in Part 1 of this series, I mentioned that as the global economy continues to emerge, many organizations may find themselves needing to cut labor costs on a recurrent basis. During times of economic decline, the need may be for drastic cuts, which the options presented last week can address, but it is entirely possible that smaller or moderate cuts will be needed even in times of growth.
The following options address those circumstances and are grouped into options for moderate cost reduction and small cost reduction. keep reading…
When many organizations are faced with the need to cut labor costs, the approaches taken are generally unscientific and poorly researched. Many simply do what other organizations acting before them have already done. The decision-making seems almost whimsical, with the final option selection process akin to throwing darts.
The end result of such whimsical action is well established; most labor-cost-containment strategies seem to be effective in the short term, but fail big time when it comes to meeting longer-term goals. It’s not uncommon for cost-containment strategies to negatively impact the organization long term, as the costs of containment paired with the cost of recovery exceed the short-term savings produced. That said, cash flow can be difficult to manage and even as the economy starts to recover, chances are organizations are going to need labor cost-containment options. If you want a more effective and well-thought-out approach, read on. keep reading…
If you’re like some corporate recruiting leaders before the current downturn hit, you had your staff balanced with a solid mix of regular full-time staff, supplemented with contract staff to get you through the hiring peaks.
But maybe you weren’t quite as fortunate, and your crew was heavily loaded with regular staff recruiters, who were going full steam to keep up with the incredible hiring requisition load. Or maybe you have shed the contractors, but even your remaining staff is struggling to stay busy. Unfortunately, now that the economy has gone south, they’re running half the req loads they once did. Not only are they questioning their own job security, but you’re constantly fending off queries from your boss, the rest of HR, and maybe even the CFO as to just what the recruiters are doing, and why should you be maintaining the same staff you had when the current workload has shrunken so dramatically. Sounding familiar?
Hopefully, back in January of this year, you took Lou Adler’s sound advice that “hiring will start to recover in Q2, 2009, and now is the time to rebuild your recruiting team and massively upgrade your sourcing and hiring processes.” Perhaps you’ve done just that, and are now well positioned to address any coming business increase. Or possibly you didn’t get that opportunity, or your business still hasn’t begun to bounce back.
In any event, you do have alternatives — methods you can use to gainfully deploy your staff resources in ways that clearly, and measurably, demonstrate their ongoing value to the business. The challenges will be different, depending on the size of the company you’re in. In a small firm, you are likely to have more latitude in initiating change — but possibly fewer resources available. In a larger firm with more resources, you are likely to need to build a support coalition of colleagues, business partners, or executives to create the right atmosphere for change. But in either situation, it’s critical that you build the “business case” — show the ROI through well-tracked and supportable metrics.
In my more than 20 years of recruiting leadership, predominantly in hi-tech, I’ve had ample opportunity to face this challenge, given the cyclical nature of that business. And as you can imagine, I willingly responded to a blog posting earlier this year asking other recruiting veterans for their experiences in facing the same issue. 13 of us shared our stories, from a variety of industries and backgrounds. The following are a few snapshots of some of the proven practices and strategies that have been successfully implemented by others to preserve their key recruiting assets during previous business slowdowns.
Some of these are creative twists on previous themes, while others represent really out-of-the-box thinking. [NOTE: All of them are predicated on the assumption that you know your staff --- their skills, strengths/weaknesses, and backgrounds. If you're new in the role, you might want to begin with a resume review and light career discussion with each of them.]
I do hope you find some of the suggestions below fascinating, creative, and useful. I will be presenting a seminar/workshop on this very subject, and with a lot of additional detail on implementation, at the upcoming ERE Expo in Florida in September, and we’d love to see you there. keep reading…
From the department of maybe-things-are-getting-less-bad: “layoffs, hiring freezes, and salary freezes may have finally peaked” in the U.S., Watson Wyatt says.
Watson Wyatt’s survey this month of 141 employers shows that 26 percent of employers plan to increase cost-cutting initiatives over the next 12 months, way down from 51 percent who said so in February. Of the companies who have avoided layoffs thus far, only 5% expect to start laying people off over the next year.
In a nutshell, the first two columns below are the nasty ones; the last two are the good ones. keep reading…
It’s a good time to bring the kids to Friday’s, Applebee’s, or Chili’s. It’s also a decent time to be a shareholder in Panera Bread or to own some Buffalo Wild Wings. But not so much for a restaurant manager in a more pricey eatery.
The chart shows the percentage of companies adjusting their restaurant staffing levels, including reducing number of managers per unit, number of hourly employees per unit, or number of hours.
The data is from a People Report study of hundreds of restaurant-chain executives.
Fifty-one percent of companies say they’re reducing or planning to reduce the number of managers per unit, while only 34% are doing so with hourly employees. Also, 42% of the companies have reduced or plan to reduce the hours worked by their restaurant employees.
In addition to cutting staff, the study finds that most chains have either closed down a restaurant unit or slowed the pace of new openings.
Most of the job cuts and restaurant closings, the study says, “seem to be already in the past, which means we should see job losses in the industry starting to slow down.”
Let me apologize upfront for this “rant” on HR’s failure regarding workforce planning, but I can’t think of another time where human resources as a profession appeared to be floundering to the point where it’s embarrassing itself.
All you have to do is read the paper on a regular basis to see that many firms and their respective HR departments are struggling to find ways to reduce labor costs. Rather than implementing sound and well-established workforce-reduction plans, HR and talent managers appear to be making it up as they go, all in an attempt to avoid layoffs.
More often than not, they are utilizing ineffective and often damaging approaches like furloughs, pay cuts, and voluntary buyouts. After years of clamoring to get a seat at the table, many HR departments are demonstrating why they shouldn’t have a seat; they struggle to deal with a predictable and reoccurring problem, economic downturns, and the related need to dramatically cut labor costs.
At least to me, the lack of a long-established plan of action at most firms is an unnecessary embarrassment when it should be a significant opportunity to stand and deliver.
The lame reaction by HR departments around the world wouldn’t be nearly as embarrassing if it weren’t for the cyclical nature of the economy and the fact that organizations have faced downturns every few years since the emergence of civilization, most recently in 2001 and 1994.
Economic downturns, mergers, and acquisitions all place pressure on organizations to curb labor costs. No time in the last decade has that tenet been more apparent than right now.
Layoffs, large or small, force organizations to cut loose the talent in which they have invested salary and training dollars. While talent released during a layoff today may seem like little more than an expense, tomorrow it could be the difference between success and failure.
The last we time we were the bearer of bad news from a Watson Wyatt survey, 23% of companies were planning more layoffs. That percentage is way down: 13% of companies are now expecting to make layoffs.
That’s partly because a lot of companies have already cut. In December, 39% of companies said they’d already done layoffs; now, 52% say so.
Meanwhile, the percentage of the 245 large U.S. companies surveyed last week that say they froze salaries more than tripled from the December survey to this one. keep reading…
You can’t read a newspaper these days without reading about organizations that are implementing employee furloughs in order to save money and to avoid layoffs. They might seem like a good idea but they might end up not saving money at all and could cause more turmoil than they are worth.
This article will cover the many problems associated with putting employees on furlough, or a temporary leave of absence or temporary layoff and a “lower-impact” alternative to permanent layoffs.
Under furlough programs, employees are asked or forced to take days off without pay. The net effect is a reduction of an employee’s annual income. Furloughs are being used in a variety of industries from healthcare and education to transportation and high technology.
Firms that have deployed them recently include newspaper giant Gannett, network appliance superstar Cisco, computer chip maker Intel, the state of California, Arizona State University, and the #1 car maker in the world Toyota.
While the tool may be popular and widely used, that doesn’t make it effective or the best choice.
Firms use furloughs instead of layoffs because they lack the courage to look individual employees in the eye and terminate them.
The key to any effective salary-savings program is to target the individuals who add little value compared to their salary. The process of selecting low-performers can cause turmoil among employees, so managers take the easy way out by cutting a portion of the salary of every employee.
In my view, managers get paid to make tough decisions, not to avoid them.
This “peanut butter” approach where you spread the pain evenly might seem like a good socialist type idea, but if your goal is to maintain a high level of organizational performance, furloughs can cause more problems than they solve.
Why is unemployment higher than it has been for decades and massive layoffs announced daily? Is something going on that is deeper than a recession? In past recessions the general reason for layoffs is twofold. The first reason is to use the recession as an excuse to remove the less-productive employees. Every organization has employees who perform marginally, but are not bad enough to discharge outright in normal times. The second reason is because customer demand for the products or services has declined and there is no need for workers who have nothing to do. The underlying assumption is that at some point customers will return and the workers will be re-employed as before. That’s the reason unemployment insurance (in the United States) is limited to a few weeks. The expectation is that workers will be brought back or rehired elsewhere in a short time.
On the other hand, recruiters and hiring managers still report that it is exceedingly difficult to find workers for certain key jobs which include computer-security experts, computer engineers, pharmacists, health workers, and even senior-level executives. The time it takes to fill open positions seems to have increased, and hiring managers frequently complain that they have to settle for “second best.”
Is there something we don’t understand going on?
Any manager who takes an honest look at individual performance knows all employees are not created equally. About 20% of employees rise to the top of the heap; 20% drop to the bottom; and the rest hang around in the middle doing only enough to attract attention.
Employee-productivity differences have attracted their share of researchers. Most agree that folks in the top half of workers out-produce the bottom half by about 2:1 (i.e., it makes no difference if people are shuffling papers or making widgets). And, when managers and knowledge workers are examined separately, the productivity ratio rises to 3:1, 4:1, or higher (i.e., responsible jobs have bigger ratios).
Productivity is more than a mental exercise. It shows up as absenteeism, errors, reduced throughput, turnover, low morale, rework, an excess number of employees, and so forth. Productivity losses are also sneaky because they are not easily seen; yet, they translate into hard cash: between 20% of base annual payroll leaked for unskilled workers to 50% for skilled and managerial employees — enough to separate a successful organization from a flop.
Converting payroll leakage into gross sales can be an even bigger eye-opener. Twenty percent leakage, for an organization that pays out 1/5 of its gross sales in salaries and benefits, would require a 500% sales increase to balance the books. Want to do more scary math? Calculate the incremental sales necessary to offset a 50% leak in managers and professional salaries!
We are in serious financial times. Opinions vary, but experts estimate our financial stress will last throughout 2009 and perhaps into 2010. The prosperity party is over. Like the dot-com bust, the world changed virtually overnight.
We cannot do much about external economic factors except dig in and wait. But, we can do something about employee productivity, especially when it comes to intelligent downsizing.
I just got off the phone with a recruiter who had been let go on Monday of this week. Like many in this situation, he wasn’t surprised, but always “kind of thought” there would be another position in another division of his company to segue to.
Not this time.
One month severance pay plus a couple of weeks unused vacation puts six weeks between him and reduced living. His wife works, and her job looks “pretty secure,” for now.
But he needs to find a job. Immediately interviewing, he’s finding that departments are looking for a new kind of recruiter — one who can do their own sourcing on the front end as well as bringing up the rear in hiring. It seems to me like a lot to ask, and maybe one of management’s forays into “let’s see all we can get” while the “gettin’” appears to be good. It smacks of greed to me but maybe I’m just sensitive on the issue, sensitized as I have been at all the recent media coverage of excess and waste among those with influence.
Microsoft this morning said it would lay off 5,000 of its nearly 100,000 workers over the next 18 months starting with 1,400 today.
The layoffs will be spread among many, but not all, divisions including HR, which was specifically mentioned in the announcement. At least some of the company’s 250 or so internal recruiters are among those laid off today.
One recruiter, who works outside the company’s Redmond, Washington, headquarters, told us he and his colleagues were “still sorting it out.” He was not directly affected, “as of now.”
Another recruiter, who works far from Microsoft headquarters, confirmed she was among those let go.
“It’s OK,” she said. “I understand. Things happen with the economy.” She had few details about the severance package or other terms of the layoff, explaining she would be meeting with HR later. However, she was certain from she had been told so far that the company “is not going to leave you out in the cold.”
I am getting one or two calls a day and three to five emails a day (on average) from sourcers looking for work. Sourcers who have been “let go” in economic moves by companies who have slashed their HR staffing departments into the bone, as one of my astute sourcing brethren pointed out this past week. Into the bone, mind you.
Two in five major firms will cut HR jobs, according to the Acceleration of Globalization report by consultancy Hackett Group. Hackett’s research of 200 global companies in October and November found that 40% were planning HR staff cuts. A further 12% were planning HR recruitment freezes.
As Dr. John Sullivan pointed out in his October column, freezes lead to “a majority” of internal recruiters being laid off and also severely limit the amount of work going to agencies. However, most freezes are and have been hastily and poorly executed, and rather than saving money, often cause serious damage to companies by leaving key revenue-generating roles either unfilled or under-serviced.
These companies have cut off their noses to spite their faces and have crippled themselves moving forward. I understand that many of you will seek employment elsewhere and in other industries. But there is opportunity afoot — opportunity for those who can go the distance. That’s you, isn’t it?
I’m not going to address the metrics of what recruiters do for companies. God knows it’s enormous. What I am going to address is what you, Sourcer, can do for yourself in these times of opportunity.
Edvard Munch Google Logo: Graphic by rustybrick on Flickr (cc)
Google is arguably the most storied company of the new millennium, but even it is not immune to the global economic slowdown.
The company just announced via its official blog that it will be laying off 100 recruiters, a large slice of their recruiting team, which our own Dr. John Sullivan has called “one of the most innovative recruiting organizations on the planet.”
With the exception of cuts after its DoubleClick acquisition, these are the first staff layoffs ever for Google (although it has recently made deep cuts to contractors). It’s a logical move for an organization that sees less hiring in its future, but still feels jarring to me that recruiters were the first to go.
I’ve met several recruiters from the Google team over the years, and have found every one to be smart and capable. I hope they land on their feet.
Of all of the issues that are discussed in the ERE communities, at ERE Expos, and at other HR and Recruiting conferences, the one that I find most important is rarely discussed: leading and managing change. This skill is probably one of the most important a Recruiting and Staffing or HR Manager should have in their toolkit.
In our communities, we’re constantly coming up with and discussing great ideas about initiating change, but all of that is worthless unless we can execute and implement those ideas. In this new year, change is a real buzzword — but rightly so! Because we have to change and flex every minute of the day, planning for difficult times and good times alike require excellent change management skills. And as someone who has learned some hard lessons over the course of my 25-year career in not knowing how to manage change, I speak from experience.
For instance, several years back, when I was head of staffing for a large, multibillion dollar company, the whole company participated in a global reengineering initiative. In HR, we decided to take advantage of this effort to implement some changes of our own. We decided to combine all of the staffing functions in the separate business units into a centralized, shared-services model. As the leader of the staffing area, I figured that since the whole company was going through change, there was no need to have any additional communication with our clients about our staffing reorganization — after all, it could be considered as simply another element of what we were all going through. Thus it wasn’t until the head of HR of a business unit and my boss were sitting in my office, complaining about my team’s dwindling performance in the wake of this change, that I realized just how important it is to communicate extensively about, and have a comprehensive plan for, implementing change.
It’s not that I didn’t communicate at all about what was happening; it’s that I didn’t “get it” in terms of what was necessary with respect to engaging others and making them “partners” with me in this change. I was subjecting my plan to what we like to call “Death By PowerPoint” — I was going around with my little PowerPoint presentation tucked under my arm, informing everyone as to what was going to happen versus truly engaging and communicating with them.
Yahoo, Beth Israel Deaconess, and Hyatt each handled the recession and the prospect of layoffs differently. Hyatt, says brand... more »