Perfect Labor Storm 2.0

Despite widely differing stories on job creation and economic growth, the U.S. and India share a common problem: skilled worker shortages.

The Indian economy is growing at a 9 percent clip.  The U.S. growth hovers around 2.5 to 3.0 percent.

The number of unemployed in the U.S. remains high, reportedly in the neighborhood of 15 million people.  If you add the underemployed and those who stopped looking, that number according to some estimates exceeds 25 million.

India on the other hand expects to add as many as 10 to 15 million jobs in 2011. 

The shared problem is a shortage of skilled workers.  Despite near double-digit unemployment, U.S. employers complain about a lack of qualified candidates.  In India, about 75% of new jobs require additional vocational training. If not addressed properly, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) warns of a slowdown in the country's economic growth. Likewise, by 2012, there will be a 3 million skilled worker shortfall in our nation, according to the U.S. Department of Labor. 

Because the year 2011 is likely to be a boom for skilled worker engaged in IT biotechnology and services sectors, salaries in India are expected to rise 30 to 40 percent against the 15% in 2010 due to high demand in India.  For the U.S. the demand for skilled workers also will increase which means that salaries will rise despite an economy improving slowly and high joblessness.  The salary increases however will be much more modest.

Ho! Ho! Ho! Happy Hiring-days?

The end of the year 2010 couldn’t come fast enough for millions of unemployed workers.  For them, a full time job will be the best gift ever.  And there’s good news on that front.  As the economy recovers ever so gradually, many U.S. businesses are cranking up their recruiting.  But for those without the necessary skills, 2011 could just be another humbug-type of year.

I personally can attest to this uptick in hiring.  As a provider of pre-employment and leadership assessments, we just don't calls if employers are not in the throes of hiring.   But 2010 was a banner year, with the month of December being the best and busiest since I started the business in 1996. But my business doesn’t even qualify as a blip on the radar of economic indicators.  So let’s turn to another source.

Advertising on one of the largest employment websites had increased a whopping 74 percent increase since December 2009. That’s an increase of 2.0 million job openings in the past 12 months.

Many of the new jobs are in retailing, accounting, consulting, health care, telecommunications and defense-related industries, according to data collected for The Wall Street Journal by Indeed Inc. The company daily collects listings from corporate and job-posting websites, removing duplicates.

As promising as these figures are, the future might even be brighter.  According to another article in the Wall Street Journal, more than 80% of job openings are actually unlisted, since most companies, including farming, manufacturing, and construction, will try to promote from within or rely on employee referrals.

To be sure, website job postings offer only a partial look at the labor markets. Many of the jobs in manufacturing and construction will never come back. And many of the unemployed millions don’t have the skills to meet the requirements of the new jobs being created. According to Edward Gordon, author of Winning the Global Talent Showdown, “between today and 2020, it is expected that 74 percent of all jobs created in America will be high-paying jobs for high-skilled workers. While there will be a need for 123 million of those talented people, only 50 million Americans will qualify.   By contrast, low-paying, low-skill jobs will shrink to just 26 percent of the total jobs in the U.S.   Worst of all, just 44 million people will be needed for those jobs, but 150 million or more candidates will be seeking those jobs.” That picture doesn't bode well for a government at wit's end to create jobs and millions of jobless Americans looking for work.

Examples of companies cited in the Wall Street Journal actively looking for employees include:

• Deloitte: mergers and acquisitions, health care and information technology.
• ATT: highly technical workers in network engineering and cloud computing, call center workers, and retail sales people.
• WellPoint Inc.: information-technology specialists, registered nurses, actuaries, insurance-policy underwriters, salespeople and call-center employees.
• Science Applications International Corp.: intelligence analysts, engineers, cyber-security experts, and project managers.
• Lockheed Martin Corp.: IT, cyber security, systems engineering, electrical engineering, mechanical engineering, and aerospace engineering.

These jobs require a minimum of 2 years of post-secondary education and up-to-date technical skills. They also might require relocation, a huge hurdle for many unemployed workers whose homes are "underwater" thanks to the housing collapse.

Going forward, the jobs picture we saw in December 2010 will be a microcosm of what to expect in 2011 and at least into the middle part of this decade:  high unemployment, increases in job openings, and employers crying about a lack of qualified candidates.  That’s good news for those with the skills. Not so good for the unemployed waiting to get their old jobs back.

Hiring Recruiters in Higher Numbers Signals Job Recovery

A sure sign of spring is when the buds emerge and the flowers peek through the ground.  Likewise, a tell tale sign of a job recovery is when employers start hiring.  When they start hiring recruiters, the forecast may call for a bumper crop.

And that’s exactly what is happening at several companies who are beefing up their recruiting staffs as hiring demands increase. Hiring is increasing slowly.  But it is increasing steadily and the trend is expected to continue and accelerate in 2011. This uptick in hiring is driven by growth in business and an expected increase in retirements.

In a survey conducted this summer, CLC Recruiting, a unit of research organization Corporate Executive Board Co., found that about half of companies planned to increase their recruiting staffs and 19% expected to shrink them through May 2011. Last year, 6% planned to grow their staffs and about a quarter planned to shrink them.

In November, the number of U.S. job postings with recruiter in the title rose 20% from June to 5,306 on Indeed.com, which aggregates job posts from thousands of company websites and job boards. That’s a very positive sign because companies won’t hire recruiters if they weren’t expecting to hire employees in larger numbers.

Executives are expecting a wave of retirements of key staff over the next few years.  The oldest edge of the Baby Boomers begins to turn 65 years old in 2011.  In response to those retirements and company growth, companies have begun to build a database of possible candidates that could fill management, science and engineering roles, even before those positions open.

Read more at The Wall Street Journal

Overworked Employees Ready To Job Hop

Some disturbing new research indicates that job hopping will heat up as the economy improves.  Employees feeling overworked is one big reason why.

But more troubling is that many workers have simply lost trust in their employers.

That loss of trust is the over-arching message in the results of a Deloitte survey, which indicated that 34% of employees plan to look for a new job when the economy improves.

Why are they planning to leave?

1. Almost half (48%) of those hoping to jump ship say they no longer trust the company they work for.
2. 46% cited a “lack of transparency” in communications from management
3. 40% said they’d been treated unfairly or unethically by their employers.

In another study by office design firm Regus, 40% of U.S. professionals confirmed the results of the Deloitte survey.  They were looking for a new job due to a lack of communication and involvement by top management. Another 37% were disappointed in the lack of promotion despite good work results. Twenty-eight percent lacked confidence in their co-workers’ competence.

It’s clearly not surprising that employees feel overworked with the kinds of productivity gains business has experienced as a result of the belt-tightening many organizations implemented over the past two or three years.

But losing trust in their employers? That’s a far more unsettling issue. There’s clearly a communications disconnect here.

It’s time to take a good hard look at the quantity and quality of the information employees receive. Perception is everything and nothing helps keep workers in the loop more than regular performance feedback. Management may think that corporate memos, an employee website, and pizza parties satisfy the needs of employees. But in this day and age, it’s like bringing a knife to a gunfight.  Without feedback and communication coming directly from a manager on an ongoing and regular basis, the trust gap will persist and the threat of job hopping will continue.

Management may well think it’s doing an adequate job of keeping workers in the loop and reassuring employees it’s doing all it can to make sure everybody will keep their jobs. But in the end, perception is everything. And it sure seems that for a substantial number of employees, the message just isn’t getting through.

 (For a look at the full Deloitte survey, go here.)

Baby Boomer Retirement Plan Bust Bad News for Gen Y

The average American has saved less than 7 percent of his desired retirement nest egg. Even those fast approaching retirement age are not well-funded. Respondents aged 50 to 59 have saved an average of only $29,000 for retirement.

Middle-class Americans think they need $300,000 to fund their retirement, but on average have only saved $20,000, according to a survey released by Wells Fargo & Co.  Consequently, more than a third of respondents believe they will have to work during retirement in order to afford the things they want or just to make ends meet.    

"Middle class" is defined as those aged 30 to 69 with $40,000 to $100,000 in househoAld income or $25,000 to $100,000 in investable assets and those aged 25 to 29 with income or investable assets of $25,000 to $100,000.

This is another blow for Generation Y.  The percentage of Americans with at least a bachelor’s degree who are unemployed reached 5.1 percent, the highest figure since the Bureau of Labor Statistics started tracking the number in 1970.

Meanwhile, national unemployment rose to 9.8 percent from 9.6 percent last month. Those with advanced educations have a massive impact on the overall rate of unemployment as that group accounts for 30 percent of the labor force.

Unemployment levels for lower-educated individuals however, still remain much higher. Ten percent of high school graduates are unemployed and an even larger 15.7 percent without high schools diplomas are jobless. That's particularly troubling when you consider that 30 percent of young people still drop out of high school in the United States.

Creating jobs is obviously a priority for government and business to revitalize our economy.  But the unemployment rate will remain high for years to come with so many unemployed workers who have achieved a high school diploma or less.

Social Media Gives Customers Power To Make or Break. R U Listening?

In the days before social media, good news traveled fast, bad news travelled faster.  Today, good news still travels fast but bad news travels … let’s just say word-of-mouth advertising has become world-of- mouth on steroids. For those businesses still relying on customer comment cards and surveys to monitor customer satisfaction, that strategy is as anachronistic as sending an urgent message by telegraph.

In this post, the final installment of my Hard Rock Café customer service saga, I’ll repeat two of the five lessons that far too few businesses appreciate.  One is an old message that I’ve paraphrased:  “Hell hath no fury like an upset customer scorned.” The second lesson is really a corollary to the first, don’t underestimate the power of social media. 

If you’ve been following my story, I was up to the part where we confronted a manager at the Hard Rock Café in Atlantic City about how she handled the attempted theft of my wife’s purse.

I sensed as she walked away that she felt satisfied in the way she handled the situation. Unfortunately we were not.  She obviously didn’t appreciate the power of social media and with that naiveté fully underestimated the damage that can be done by “an upset customer scorned.”

Immediately upon our return home, my wife told her story on Facebook. Within minutes, she received comments from nearly a dozen friends, who likely shared the story on the walls of their friends.  That’s the power of negative word-of-mouth advertising and follows closely the rule of thumb that one unhappy customer tells 13 others.

While effective, that’s naïve and 20th century thinking.  If you haven’t accepted the new reality, let me be the first to break the news.  If you are in business and you have customers, you better be listening all the time and ready to respond promptly because “hell that no fury like a customer scorned.”

My wife suggested that I compose a letter to Hard Rock’s management “because I write so well.” But no way was a letter going to get Hard Rock’s attention.  Instead I went straight to Facebook and posted our complaint on Hard Rock Café’s wall.  The audience: I reached nearly 1.7 million people just on Hard Rock’s page alone with a few keystrokes! And that’s just the tip of the iceberg. Because a Facebook business profile is visible to non-Facebook subscribers, the potential reach is hundreds of millions of people.  That’s a far cry from one person telling 13.  What’s more troubling for a business like Hard Rock when a customer wants to broadcast his bad experience?  What happens on the Internet stays on the Internet.  With a letter or email, the complaint gets sealed far away from the maddened crowd.

At this point, many owners and executives might be savoring their decision to ignore Facebook and the like in order to avoid receiving negative comments.  Not only is that just plain dumb, it will come back to bite them big time. 

Had Hard Rock Café not had a Facebook page, I would have gone straight to one of their competitors and posted my experience on their walls.  Don’t believe me. Do a search on Facebook and read how dissatisfied Toyota customers reacted after they were ignored for weeks after the gas pedal incident a few months ago.

Next I would have visited Yelp, a social networking site that allows consumers to share the experiences they've had with local businesses.  The potential damage?  Yelp is the 49th most popular website in the United States.  Or I could have posted our bad experience on Yahoo Travel, the 3rd most popular site in the U.S. and 4th most trafficked site in the world (according to Alexa).

Hard Rock is lucky too that I’m not 30 years younger. While quite adept at navigating the digital world, my mindset is still framed in a Baby Boomer world. Had I been a digital native, a Millennial raised when PCs and the Internet were mainstream, I likely would have been writing on Hard Rock Café’s wall from the restaurant, not my office 100 miles away over 24 hours later.  Young adults are conditioned to text quickly and share instantly. It’s part of their DNA. They share opinions freely and use social networking in interesting ways. They … and their technologies… are changing the face of customer service.

Are you getting the picture?  It doesn’t matter whether your business has created a social media marketing strategy or not.  If you haven’t done it intentionally, your customers and competitors are likely doing it for you.  Do a quick search about your business, your products, and your industry and you will find conversations about you somewhere on the Internet using one of the hundreds of social media sites available to anyone at anytime. No news is not good news anymore. If you aren’t hearing your customers talking, you’re just not listening.

But I digress.  I posted my comment about Hard Rock on Facebook at 9:12 AM. By 9:55 AM, I received a comment from the Hard Rock. Now that’s good service.
 
I accepted their invitation to “friend” them and within a few hours received a lengthy and sincere apology from the assistant manager.  What grabbed my attention was that our situation was being used as a training exercise for their managers and staff.  Management got it right even if the manager on duty didn’t. It wasn’t only my wife’s purse and personal belongings at stake that night…but our safety and comfort along with all the other customers.

The manager and I exchanged a few private messages. I then received a personal call from the assistant manager.  While a few words and gift cards don’t erase the bad experience from our memory, Hard Rock Café’s customer service recovery plan, which obviously includes social media monitoring, stopped further damage in its track.

In fact, they might have turned lemons into lemonade for some folks. In a world where bad customer service is the norm, a good recovery story creates good will.  If nothing else, a response to a complaint with some attempt to resolve it shows your customers that you are listening.  And listening to customers is a proven way to retain over 80 percent of your customers.  I’m not sure we’ll go out of our way to visit another Hard Rock but we certainly won’t avoid it either.

For companies dependent on loyal customers of all ages, social media is shaking up how consumers make decisions and how technology announces them. All of this can create tremendous business stress as well as value when organizations use it effectively.