Welcome to the next decade!
If you’re anything at all like most people, you’ve taken at least a few moments to think about your resolutions for the new year. Maybe you’re going to finally use that gym membership you’ve been paying $79.95 a month for (for the past three years), or perhaps you’ve resolved to stop [...]
Here in Chicago, where unemployment in June topped 11%, the market for full-time professional positions is very, very tight. Large employers here are very hesitant to increase permanent headcount, but are finding that their lean workforces aren’t keeping up with demand.
The solution? Hiring contractors.
Last week, I met with a large consumer products company to discuss their workforce plan for the next 12 months. In that meeting, their stated workforce strategy was to keep full-time hiring on hold, and to pursue hiring contractors for all roles, with the aim to convert them to full time employees within the next 6 months. That’s a significant change from their previous strategy, and, since most other large firms with whom I speak seem to be following a similar path, the implications for the workforce are several.
First, contract-based work “moves faster.” Instead of having to wait for cumbersome internal HR processes to produce a hireable employee, contract firms blitz the company with people who can literally begin work tomorrow. When the demand shift to contract-based workers, hiring cycles accelerate, which bodes well for reducing unemployment rolls.
Second, most contract assignments carry with them zero benefits like health insurance, vacation time, or a 401(k) plan. While getting back to work is good, the shift to a contract-based workforce doesn’t much help our national problems of too-little retirement savings and high levels of uninsured workers.
Finally, any increase in demand for contractors will drive employment in the recruitment industry. Contractors aren’t hired by HR representatives, they’re hired by professional recruiters who work for staffing companies. Along with this recently observed uptick in contractor demand, I’m also seeing requests for full-time recruiters climbing steadily at the large staffing shops.
Staffing industry pros know that an increase in demand for contractors means that full-time employment will pick up in the next 4-6 months. When that happens, we’ll see the unemployment numbers (a lagging indicator) begin to decline by mid-2010.
Is your company hiring contractors in lieu of full time employees? Sound off in the comments section.
If there’s one upside to a recession, it’s the fact that great candidates abound.
Just twelve months ago, companies were scrambling to find people for skilled positions in sales, IT, and finance. Companies find themselves fishing in a much deeper pond these days, and I am increasingly hearing that the the problem is now no longer how to find great candidates, but how in the world to whittle that stack of 500 resumes down to the 3-5 people you actually want to spend time interviewing.
Where previously clients were hiring us to go out into the field and “pull” candidates into the hiring process, now they’re calling us to help process inbound applications because the sheer volume is overwhelming. I’m seeing ten times the applications per job than was the case in 2007. And, since most companies have scaled way back on internal HR staff, the “too many candidates” problem is amplified.
With unemployment figures estimated to top 10% in early 2010, I don’t see any end in sight to this massive shift from “I can’t find anyone” to “I can’t see over this pile of candidate resumes.” 3rd party recruiting providers who can’t adjust to that reality are in for an extremely painful year. And do-it-yourself Managers who don’t get help are going to end up making bad hiring choices.
Candidate frustration is on the rise, as well. The influx of resumes is overwhelming most internal HR organizations, and candidates simply never hear back from the companies to which they’ve applied. The easiest way to soil your name amongst top candidates is to have a poor candidate response mechanism in place. More and more I speak with people who tell me that it’s not uncommon for them to send our a hundred resumes before they get even one “thanks, but no thanks” letter. They’re not even getting a formal “no.” That’s atrocious customer service.
Bottom line: if you’re inundated with resumes, seek help. Your dream candidate just gave up trying to apply to your open job and is now working for a competitor.
Leading online job board Careerbuilder.com mailed out their Q2 Employment Outlook this week, and although it’s about a month late (it’s mid-May, after all) there are some good nuggests of data that I’d like to share with you.
At at a high level, Careerbuilder’s survey reveals that US employers are “holding off on staff expansions in [...]
Pick up a copy of the May 11, 2009 issue of Business Week, and on the cover you’ll see a Hermann Miller chair with a gigantic sign perched on it that reads, “Help Wanted.” The caption declares, “the US has 3 million job openings” and goes on to tease us with the line, “why that [...]
Today I’m stepping outside the typical “how-to” article and focusing on entrepreneurship.
We’ve heard a lot of talk lately about “the role of the Entrepreneur” in leading the world out of this global economic maelstrom. We hear that “small businesses employ 90% of Americans” (true) and that “entrepreneurs will drive jobs growth and the economic recovery” [...]
Answer: Absolutely.
In 2002 and 2003, the employment market (and overall economic sentiment) was absolutely dismal. With the dot.com bubble bursting and recessionary pressures making life tough for everyone, many business managers simply pulled in their oars and braced for the storm. In early 2004, the clouds lifted, budgets firmed up, and businesses starting hiring again.
But savvy managers took advantage of a soft [...]