The Hiring Paradox

The Hiring Paradox (Skills Gap 1)

Last modified on 2012-12-19 23:33:30 GMT. 1 comment. Top.

Recruiting rule number 1 is that you can always solve your skills shortages with enough money.

The Hiring Paradox (Skills Gap 1)

It’s much harder to hire people when there is a glut of talent. That’s one of the fundamental reasons that measures like ‘Time to Hire’ are so flawed. Hiring mirrors the economic environment. The hiring process speeds up when the economy is doing well, it slows with the financial environment.

This paradox (I would have bet that the opposite is true) is one of a slew of interesting insights offered by Peter Capelli in “Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It“. It simply takes more time to choose between alternatives when their are more alternatives. When the supply of anything is abundant, the biggest symptoms are often complaints about shortages

Representing the MBA consulting perspective, Capelli believes that employers are to blame for their hiring problems. This view was echoed recently by Paul Krugman and Adam Davidson in the pages of the New York Times. All three rightly note that skills shortages should be accompanied by dramatic increases in wages.

That’s not happening.

Capelli, Krugman and Davidson all point to employers who want to find high skilled workers who are willing to work for low wages. They make the correct case that underpaying is not the same as a skills shortage. Capelli goes further in his critique and recommends older hiring methods that included training.

These are simplistic views of the labor market from folks who think that everyone lives in a big city and that the education system is irredeemably bankrupt. The reality is a good deal more complex. Skills shortages have all sorts of causes.

There is some merit to the idea that the trendy focus on bottom line results has come at the expense of human capital. Training programs that were once mandatory have become as scarce as hen’s teeth. But, the view ignores all sorts of variables from rapidly shifting markets to the relentless logarithmic technology explosion.

Jobs are not what they once were and a return to a better time with better employee development policies is as useful as any nostalgia trip.

The spectrum of skills gaps ranges from low ball compensation and misperceptions of the market to honest to goodness actual shortages of people. Separating the wheat from the chaff on this one requires a thoughtful look at the issues facing your company in the places that your company does business.

Recruiting rule number 1 is that you can always solve your skills shortages with enough money. At that point, it becomes someone else’s problem. Growth in that arena is only possible with an investment of some sort. The question is “Who makes it?”

For a generation, the career coaches of the world have been busy telling job hunters that the investment responsibility is theirs, that companies are no longer paying for real skills development. Most employees understand that their livelihood is contingent on staying current.

So, where does the problem come from?

There are a stack of explanations and the answer is a case dependent combination of them. They are:

• The problem is caused by off shoring and outsourcing
• The education system has failed to keep pace
• Employers don’t know how to hire, manage and develop their people
• The problem is entirely regional
• The technology explosion changes work faster than we can keep up with it
• Actual shortages

Over the next week or so, we’ll dig into the question.

Reading List

• Skills Don’t Pay the Bills by Adam Davidson
• The Fake Skills Shortage by Paul Krugman
• Unemployment is Up. Why Is It So Hard To Find The Right Hires? by Leigh Buchanan (Inc Magazine review of Capelli)
• If There’s A Gap, Blame It On The Employer by Peter Capelli
• Government and Industry Must Invest by Elaine Chao (The Secretary of Labor offers somewhat predictable advice)

===================

Read the series

• Skills Gap 1: The Hiring Paradox
• Skills Gap 2: Outsourcing
• Skills Gap 3: The Pace of Change
• Skills Gap 4: Undercapitalization
• Skills Gap 5: The Future is Here

Five Links: Roundup

Last modified on 2012-11-29 17:38:34 GMT. 0 comments. Top.

Migration has slowed from a high of nearly 2 million annually in 2006 to less than 800,000 last year.

Five Links

This week’s five are a smattering of managerial insight, a whiff of demographics, a bit of freeware, a look at language, a tutorial and a bonus list of rules.

• Where Americans Are Moving
  “An analysis of domestic migration for the nation’s 51 largest metropolitan statistical areas by demographer Wendell Cox shows that the 10 metropolises with the largest net gains from 2000 through 2009 are in the Sun Belt, led by Phoenix, and followed by Riverside-San Bernardino, Calif.; Atlanta; Dallas-Ft. Worth; and Las Vegas.
  Migration has slowed from a high of nearly 2 million annually in 2006 to less than 800,000 last year, but the most recent numbers show that the Sun Belt states, though chastened by the recession, are far from dead, as often alleged. This part of America, widely consigned to what the Bolshevik firebrand Leon Trotsky called the “dustbin of history” by Eastern pundits, somehow manages to continue to draw Americans seeking opportunities, in particular from the large coastal metropolitan regions.”
• Wall of Awesome
  Simple and effective recognition system. Nice.
• 11 Books Every Boss Should Own
  Bob Sutton, famous for his no-nonsense management approaches, covers some great titles here.
• Why Jargon Feeds on Lazy Minds
  While I’d add Big Data, User Centric, Candidate Experience, Gamification, Cloud and Analytics, this piece focuses on the broader marketplace. Here are the lazy words of our time:
  • Breakthrough
  • Transformative
  • Next-generation
  • Seamless
  • Game-changing
  • Revolutionary
  • Ideation (oh how I hate this word)
  • Disruptive
  • Incentivize
  • Innovation Infrastructure
  • Customer-centric
  • Radical
• BigData in HR: Why it’s Here and What it Means
  A Bersin blog post that offers one way of looking at Big Data

Bonus Link

• New Rules For The New Economy
  About a decade old, these short aphorisms describe the world we currently inhabit.

Employment Branding

Last modified on 2012-11-28 06:01:54 GMT. 1 comment. Top.

A brand is a relationship.

“Employment Branding is the craft of being so completely organized that you are ready with the right message for the right person when she comes along.”

A brand is a relationship.

Brands only matter to the people who care about them. Mention the brand name outside of the circle of people who have the relationship and you will receive shoulder shrugs. Mention it inside the circle and you can spark a conversation full of passion and opinion. The only brands that matter are the ones that people care about.

The theory and development of branding has been reserved, historically, for companies that could afford large broadcast media campaigns. The best examples of brand marketing are consumer product companies, from automobiles to popular music to varieties of American Cheese. The term brand is used to cover a wide range of circumstances from name recognition to deep affinity.

The notion of a brand has been extended to cover some surprising things. FastCompany , the periodical manifesto for those who want to change organizations from within, extends the concept as a metaphor for personal marketing. Peppers and Rogers, the authors of popular books on database and relationship marketing, move the concept to tightly grouped members of a database.

It is useful to think about branding as an early stage technology. Purely a 20th Century invention, branding, like many first generation technologies, began in organizations that could afford clumsy and inefficient approaches because of their sheer size. For the past 70 years, branding has been a game of extensive spending to attract large numbers of people to a single product or company.

Today, however, the tools needed to build very clear, very small niche oriented brands are readily available. Like much of marketing, the tools are now available from the desktop. This “downward evolution” of marketing, covered in our earlier work, creates both expanded opportunity and expanded responsibility at the department and operating unit level.

Changing demographics create a new requirement for the development of Relationships between Employers and demographically defined pools of candidates. This process, which is an outgrowth of the emerging changes in the basic concept of management are nothing less than a redefinition of the boundaries of the organization.

The combination of need and trend is fortuitous. As the generational labor shortage unfolds its consequences, the competition for employees will become increasingly precise. Over the next several years, we will continue to witness a series of increasingly successful branding exercises that focus clearly on the branding of subcomponents of the organization.

What makes Company X the employer of choice for Unix professionals is unlikely to be the dynamic that attracts candidates in accounting. A brand, as it is commonly understood is a good place to start. But, the focus on being a generic “employer of choice” is an inadequate vision for effective long term labor supply management.

Employer’s Holiday Guide

Last modified on 2012-11-26 15:39:13 GMT. 1 comment. Top.

If your company is short on funds this year, take the money you would have spent on a party and give it to the employees.

Here are my legal and practical suggestions for the holidays. Somebody had to say it.

Don’t Have A Party. You don’t want to see your employees drunk. They really don’t want to see you drunk. They also don’t want to spend their free time with you, especially on a weekend. They don’t want to hire a babysitter for the kids, don’t want to get stuck next to the asshat manager at dinner, and don’t want to choose between chicken or pasta. And their spouses have absolutely no interest in coming. Really. Don’t have a party.

Give Money, Not Gifts.  Employees don’t want presents, not even wine, or scotch, or snuggies. They want cash. ‘Tis the season of extra bills and property taxes. If your company is short on funds this year, take the money you would have spent on a party and give it to the employees. There is nothing more demoralizing than going to a fancy lunch to learn there won’t be holiday bonuses this year.

Don’t Let People Drive Drunk. Driving drunk causes death. If you must have a party, pay for taxis or rent a nice bus to pick people up and drop them off.  Also check your state laws on social host liability- you could be responsible for drunk employees’ accidents and the people they injure too.

Photo Op or Evidence? Everyone’s phone is now a camera that instantly uploads to Facebook and Twitter. Many are also video recorders. Reduce the chances of embarrassment and incriminating evidence by providing a phone check along with the coat check. If you want photos of employees enjoying the party, hire a photographer to come and shoot pictures before everyone gets wasted.

Give Time Off.  Give employees extra paid time off. There is so much to do during the holidays and they aren’t really working anyway between December 20 and January 4. Consider closing the office between Christmas and New Year. If you can’t do that (especially if you’re in retail), at least make sure everyone has some family time and rest.

Not Everyone is Christian. It’s easy to assume that everyone celebrates Christmas. Trees are nondenominational, right? And everyone should at least tolerate Christmas because it’s everywhere, right?  Wrong. Religion is a protected class and you can’t favor one over others at work. While I’m sure no one ever gave back a Christmas bonus because they weren’t Christian, you can’t make employment decisions based on religion. Be festive, eat chocolate. Just watch the religious symbolism at work.

Don’t Fire People During the Holidays. Even if you need to cut the workforce, wait until January and give people plenty of advance notice so they can start adjusting now. If you’re trying to get out of paying into the 401K, you should have considered that earlier. Firing people during the holidays is rotten, creates bad will with all the employees, and increases your chances of a claims and lawsuits. So unless it’s something egregious, don’t fire someone in December.

Don’t Send Out Crappy Holiday Greetings.  The only thing worse than cheap printed cards, is expensive ugly printed cards. The only thing worse than that, are cheesy animated emails that say  you’re donating the money for cards and postage to some charity. We don’t care whether you’re taking a business expense deduction or a charitable contribution deduction. If you send out a holiday message, make it considerate, or at least funny. People remember the bad ones. They never notice not getting another stupid card with an embossed earth and doves.

Say Thank You. No matter how the financial year went, be sure to acknowledge the effort of the people who worked hard and cared.

The Amazonification of Recruiting

Last modified on 2012-11-30 06:38:11 GMT. 8 comments. Top.

Bob Corlett | Founding Member, HRExaminer Editorial Advisory Board

by Bob Corlett

Judy runs a top tier staffing agency in DC.  Her client service is impeccable. Consequently, she has attracted an intensely loyal stable of client companies who have standards as high as her own. But Washington is a big city, so Judy may be loved by a few, but she is still totally unknown to many.  Every day she competes with the big-box national staffing firms who spend more on marketing than they do on internal staff training.

But all those big-box marketing platitudes don’t generate value for customers. Wading through the boastful claims only extracts value (time) from the reader. Nobody selects a staffing firm because they have a great tagline or brochure. No, in staffing, your candidates are your brand to the client company; and your client companies are your brand to the candidates.

In Washington, many of the best candidates arrive here from somewhere else. So how do all those bright, fresh faced, recent college grads find Judy? How can Judy rise above the cacophony of hollow marketing claims made by the squawking flock of look-alike temp staffing agencies?

She can’t. But fortunately someone did it for her … well, actually eight people did.

Yelp reviews are driving great people to Judy. Not only is she attracting job seekers, she’s also attracting new client companies … from Yelp. As of this writing, eight reviewers have clearly differentiated her company from the others. I know most of the other firms listed, and I must say that I thought the reviews were fairly accurate. I was particularly amused to see the 3 consecutive one star reviews of another staffing agency just a few blocks from Judy.  (Devastatingly, they had one review each, in 2010, 2011, and 2012 so it’s a pattern, not just a bad month). The scathing reviews of Judy’s competitor included these gems: “RUN!” “Phony, impersonal and condescending,” and the reviewers named names, “Allyson is the rudest, nastiest person.”

Go ahead and try to beat that fire down with a marketing brochure.

In those two staffing agencies, what is the cost of bad reviews and what is the benefit of great reviews? One firm now has to combat bad reviews with expensive marketing and sales efforts, while the other firm will attract great candidates and employers by answering the phone. Judy has always been great, but now, a total of eleven anonymous reviews have decisively tipped the economics in her favor. She can spend less on marketing and win more clients. For years.

Both firms were Amazonified.  One won, one lost.

In the past week, I bought two relatively expensive items on Amazon. I had a rough idea of the features I wanted, but I had done no homework. I had no intention of going to a store to talk to a sales clerk–that’s time I would never get back. So I clicked over to Amazon, searched for the item, scrolled down past the company  marketing noise and read the top user reviews. I made an informed decision in less time than it would have taken me to drive to the closest store. In both cases I had not intended to even consider the brand I ended up buying—they were Amazonified. Their happy users convinced me, not their marketing boasts. I’ll believe total strangers over your marketing team any day of the week.

The Amazonification of recruiting is accelerating. Sites like Yelp and Glassdoor are pulling back the curtain on candidate experience. LinkedIn has found a way to rapidly accelerate the endorsement process, and apparently will start to weigh your endorsements in their search results.

It’s a brave new world of accountability coming. Are your recruiting practices ready for it?

Trash Your Policy Manual

Last modified on 2012-11-20 12:09:14 GMT. 1 comment. Top.

Give employees the autonomy and resources they need to do the work.

This is a longer version of the Ignite speech I gave at HR Reinvention in Omaha last week. It was a great conference full of bold ideas and creative, insightful people. I met brilliant people doing interesting things like getting rid of leave policies. Here it is:

What if you got rid of your policy manual?

What if having a great place to work was more important than rules and covering your ass?

Policies are not a good way to manage. Policies don’t fix performance, attendance, or behavior issues.

Rules don’t stop people from doing things. Especially stupid things. Especially things to get around the rules.

It just becomes a game of policy Whack-A-Mole.

I had a client who changed from PTO to separate sick leave and vacation policies since paid time off was vested and had to be paid out. So they carved out sick leave and made it use-it-or-lose-it to save money.

Suddenly everyone was sick on Monday or Friday. And most illnesses seemed to last at least 2 days.

Then they required doctor’s notes for all illnesses more than one day.

Then healthcare claims went up. And illnesses lasted 3 days.

So they called me. They wanted to know if they could make a rule that employees could not see a doctor unless they were really sick.

No.

Instead, they got rid of use it or lose it sick leave and went back to PTO. It’s much better now.

Work should be about doing great work, not beating or enforcing the rules.

But, you can’t get rid of all the rules. How will people know what they’re supposed to do?

They know. Has anyone ever missed a paycheck, a holiday, vacation, or how to complain about the guy sitting in the next cube? The required policies are all in the break room on those posters anyway.

Policy manuals just gets signed, shoved in a drawer and thrown away when the employee leaves. They rarely inform or educate.

The way to do that is training and discussion.

But what about rules to make sure that everyone is treated the same?

You already don’t treat people the same. They have different jobs, different tasks, different pay, different vacation, different hours, and really different lives.

And they don’t really want to be treated the same.  Do you give your kids the same Christmas presents?

Do you want to be treated like a 50 year old white guy?

You don’t have to treat people the same. You just can’t discriminate based on a protected factor.

Does it require judgment calls? Sure. You make them everyday, anyway.

What about managing risk? What if you get sued? 

Guess what? Happy employees who feel cared and appreciated don’t sue!

And if you do get sued, taking responsibility for your decision and terminating people for what they did instead of violating policies play much better to the jury anyway.

So what policies should you get rid of?

The ones that actually make a difference in the work culture and employees daily lives. The human policies.

The big 4 are Progressive Discipline, strict limits on Leave, Social Media, and anything that involves a Sign in the kitchen or bathroom. (You know it’s the boss who never cleans up.)

Progressive discipline is demoralizing to the employee, requires you to set them up and forces everyone through a stupid process that never works. It disrupts everyone because the employee gets angry and bitter and tries to get everyone else to agree with her.

Get rid of people as soon as you know it’s not working out. Give second chances when it really seems like a good idea, not as a matter of course. Keep your options open.

Leave–give employees leave when they need it. Work it out. Let them work from home. Reduce their load or hours. When you value employees, find a way to keep them and reassure them that when the dust settles they can come back. It’s the right thing to do.

Social Media- You have no control. You will not get control. Give up. Now. Besides, the best way to prevent employees from doing or saying something stupid is to have a great place to work.

Really. Trust people. They are grownups. If trust won’t work, then look at why you are hiring nincompoops.  Or, is it really that the boss is a complete jerk?  Policies won’t fix that.

Policies don’t fix management problems.

Give employees the autonomy and resources they need to do the work.

Then say thank you.

In that spirit, thank you to John Sumser and Jay Shepherd for encouraging and pushing my thinking on this topic. And thank you to Jason Lauritsen, Joe Gerstandt and William Tincup for their kindness and help.