What’s Going On Out There?: A Follow Up

Well, I asked for it and I got it! Last week’s survey got a strong reaction, indeed, as hundreds of you sent in responses. So many, in fact, that with ER Expo and other work I just haven’t had the time to collate them and draw conclusions. I will try my best to post a “special” column later this week or first thing next week letting you all in on what everyone is feeling about this downturn. If you still want to submit a survey, please take a look at last week’s column. You still have a day or so to get one in to me. It is interesting to see how our organizations are reacting to the slowing economy by laying people off in droves. Only a couple of months ago they were focused on the shortage of talent. This knee-jerk reaction of laying people off whenever an economic slowdown happens cannot last much longer. The population of the developed countries is getting smaller, many of us baby boomers will be retiring over the next decade and a half, and those left will be getting older. The supply is already less than the demand ? even in this economy today. Younger people are seeking more balance in their lives and fewer are willing to toil long hours for someone else. The layoffs only reinforce an already growing reluctance of these folks (and older ones, as well) to take full-time jobs and build corporate careers. Some say as many as a third of new workers are looking for some form of free agency status ? part-time, contract, or temporary work. It seems to me that these forms of work may be just as secure as the regular jobs and pay a lot better. For the prudent free agent, the slowdown means time to relax, study, or travel. I think the result of this slowdown will be an ever increasing number of free agents. We all know the talent shortage is very, very real. There are huge needs for IT people, sales, marketing and branding folks, and all the services jobs. This last months’ employment figures show an increase in the number of new jobs and an unemployment rate of 4.2%, which is unchanged from January. We are still in a fundamentally robust economy that is reacting to the numerous interest rate hikes Greenspan imposed last year, and to the “irrational exuberance” of the recent stock market mania. These manias have occurred throughout history. The recent dot-com boom is strikingly similar to the boom for railroad stocks in 1857 and 1873 in the United States and to new industry stocks in the 1920’s prior to the great crash. What is certain is that we will make it through this and that the market will rise again. Most of the experts I talk to feel this will happen within the next 8-10 months. Our corporations ? were they to really to believe what they have been saying ? would invest some cash and time into putting better talent strategies into place to get ready for the rebound. They would be looking at the long-term supply of the talent they need and be chartering you to find where the supply is and how big it is. How many C++ programmers are there in your city? How many do you think you might need over the next year or two? And is there a gap? Can you hire as many as you need or will the competition get some or most? What is your plan for dealing with this? Will you recruit differently? Will you decide to partner will local colleges to develop talent? Will you do it internally? These are the questions we should be posing to management. Their panic reaction is mostly to satisfy “the street.” Many do not realize that by laying people off they are jeopardizing their future ability to recruit the best talent. The social contracts and social capital that are broken and lost by these layoffs will be far, far more costly than any savings can justify. I remain upbeat and urge you to work with your clients and management to reinforce the message that for probably the first time in American history the demand for educated and skilled workers in the service sector far exceeds the supply. This trend is just beginning but will continue to grow over the ensuing decade. Layoffs are like bleeding a wounded man with leeches. Only good, in the long run, for the leech. <*SPONSORMESSAGE*>