ERE.net

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!

Enter Financial Chaos and Uncertainty

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.

keep reading…

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.

keep reading…

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.”

keep reading…

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.

keep reading…

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.

keep reading…

With all due respect to Lou Adler, there’s not much evidence in today’s labor report that there’s any recovery in sight. Besides confirming economists’ expectations that about 524,000 jobs were lost in December, the Bureau of Labor Statistics revised its November jobs report to say the U.S. lost 51,000 more jobs than the 533,000 it initially reported.

The December numbers pushed the nation’s unemployment rate to 7.2 percent, a rate that jumps to 13.5 percent when you include the underemployed — those involuntarily working part time or at temporary jobs or are otherwise marginally attached to the workforce.

As many news organizations pointed out, the 2.6 million jobs lost last year was the largest jobs loss since the end of World War II, when 2.75 million jobs disappeared. The pain would have been worse in 1945, however, since the nation’s population then was 132.5 million. Today the population is 301.6 million with 135.5 million non-farm workers.

A more telling statistic is the rate of job loss. More than 1.9 million jobs were lost in the last four months alone. In the last eight years 3 million jobs were created, compared to the 22.8 million in the eight years previous.

keep reading…

Here’s what companies are doing and plan on doing because of the slower economy. Watson Wyatt’s survey was conducted during the week of Dec. 8, and includes responses from 117 companies across a variety of industries.

About the only ones who ever thought the troops would suck it up with vim and vigor after a layoff were the corporate suits.

Now comes a study from Leadership IQ, a training and research firm, that bears out the conventional wisdom. Three-quarters of layoff survivors say their productivity has declined while customer service has worsened. The survey also found that 69 percent of the remaining workers believe the quality of the company’s products or services has declined since the layoffs.

The company’s survey of 4,172 workers who kept their jobs after a layoff also found:

• 64% of surviving workers say the productivity of their colleagues has also declined.
• 81% of surviving workers say the service that customers receive has declined.
• 77% of surviving workers say they see more errors and mistakes being made.
• 61% of surviving workers say they believe their company’s future prospects are worse.

keep reading…

Tom Snyder, the tough-nosed director of operations at Great Company, had a big decision to make.

Like so many other executives faced with poor sales and a slow economy, Tom had to reduce staff or find some other way to reduce costs. The CEO was a traditional guy and assumed that the first cuts should come from administrative areas — particularly human resources. But he left the final decision up to Tom.

Tom has already decided to reduce the number of human resource generalists and to find an outsource provider for payroll, benefits administration, and some other similar functions. But those changes were not enough. He needed to find additional savings and recruiting was the most expensive function that remained.

Tom realized that recruiting was an essential function and even in tough times, they needed to recruit certain key people and replace those who decided to leave. He respected the head of recruiting and wanted to ensure that he stayed with the company. But he was also a good businessman and he wasn’t certain they really needed the number of recruiters they had, given the lower levels of hiring. He was also thinking about outsourcing the function — or parts of it — to reduce costs.

Great Company was located in a coastal area with 4,000 employees globally — most of them in this location. It produced medical devices that were fairly recession-proof, but growth had slowed tremendously. The CEO wanted to trim costs and improve efficiency, but he wanted to emerge from the slow economy ready to grow immediately.

John Tully, the Director of Recruiting, led a team of 15 people. Four sourced candidates and maintained the CRM tools and communication processes, another four were administrative and scheduled interviews and did reporting and other tasks, and the remainder were general recruiters with a broad range of skills. John was an exceptional contributor. Tom had praised him at a recent communication meeting in a rousing speech about how HR could actually deliver if they had more people like John on board.

Tom was somewhat upset that events had led to this.

keep reading…