LinkedIn, launched in 2003 as a professional network with under 500 users, is now connecting over 70 million people in 200 countries and territories. Initially associated with the popular MySpace, but for adults, users quickly learned that this platform was a whole lot more. It was opportunity. Opportunity to showcase your knowledge and experience to connect with other professionals to further your career. As an online resume of sorts, LinkedIn profiles built authority through not only being shared on their site but as a high ranking personal brand throughout the web.
During her two-plus years in business, Elizabeth Turley has steadily recruited new employees for her apparel company, Meesh & Mia Corp., to keep pace with its rapid growth. But this year could be different. Instead of increasing her staff, she plans to hire independent contractors for tasks that can be outsourced, such as marketing and product development.
Her reason? Meesh & Mia is on the cusp of having 50 full-time employees. If the company hits that threshold, it will have to provide health coverage that meets government standards or potentially pay a penalty.
Manufacturers need a flexible workforce over the longer term to avoid carrying the fixed cost of labor in slower periods and to be able to respond to upswings.
Addressing longer-term workforce flexibility through direct employment is costly and creates a culture of negativity and uncertainty. Sourcing, screening, interviewing, testing and certifying candidates; onboarding and managing the employer/employee relationship and risk; the layoff and outplacement process are a considerable expense on top of the running cost of compensation which, alone is estimated at 158% of wage in NJ. Retention, morale and a healthy culture are all compromised when the entire workforce has no perceived layer of insulation from layoff in a cyclical environment.
Addressing longer-term flexibility through Temporary Agencies does not always produce the quality workforce needed. This is particularly true in an advanced manufacturing environment. Additionally, the brightest of the labor pool are not willing to engage manufacturing positions if the onramp is unattractive – for example, Temp, no benefits, no paid time off, etc. The brightest can switch paths and find employment in another area with a more attractive onramp. “Recruiting” through the typical Temporary Agency will limit candidates to only those willing to work without a robust compensation plan. Think about it; the candidate pool you are sourcing doesn’t contain the candidates you want.
Addressing longer-term flexibility through a third party solution provider who can engage the right candidates, compensate them properly with competitive wages, real health benefits, paid time off, retirement plan, etc. and manage effectively will produce much stronger talent than those entering through the Temporary Agency. Retention will be greatly improved. This onramp is much more attractive to the brightest talent in the labor pool. The running costs are lower than direct employment and the vendor picks up the sourcing, screening, interviewing, testing and certifying candidates; the onboarding and managing the employer/employee relationship and risk; the layoff and outplacement process.
Short-term workforce flexibility is the specialty of Temporary Agencies where day-to-day and week-to-week cycles need to be addressed. In reality, this is often the case. When it is, we have to expect to manage with a workforce that finds this kind of arrangement acceptable.
Today’s manufacturer can no longer think in terms of their “permanent” and “temporary” workforce. A stable core of direct-hire, regular employees surrounded by an outer core of more elastic, longer-term third party staffers with a perimeter of fast response temporaries is a cost effective model for flexibility, productivity and success.
Three years after the recession’s “official” end in June 2009, about 12 million people remain unemployed, with more than three jobless people for every opening, the U.S. Labor Department reports.
So why do employers constantly whine about their inability to find the talent they need from an applicant pool that they say lacks skills, rudimentary educational abilities, and even a willingness to work?
Sitting in his office at the University of Pennsylvania, Wharton management professor Peter Cappelli asked himself the same question. Cappelli isn’t buying all the moaning, widely reported in business media.
Pentad People Solutions expands into Westchester as part of the company’s ambitious growth strategy to penetrate new businesses and communities in the northeast region.
Pentad People Solutions expands into the Hudson Valley as part of the company’s ambitious growth strategy to penetrate new businesses and communities in the northeast region.
In the Northeast this year, during late summer and fall, hurricane flooding and a surprise early snowfall took down trees, utility poles and power lines. Many of us were left without power for long periods of time. The focus of anger and complaint fell on the local power companies for their failure to communicate status and get things fixed quickly enough. We all speculated on how we could better secure the poles, trim the trees, provide faster response, etc.
We approach the power problem in the early 21st century in much the same way people approached the transportation problem in the late 19th century. We try to solve the problem in the terms and the ideas of the very thing that got us to the problem.
The world had to think beyond horse-powered transportation and the world has to think past the idea of transmitting power over lines hung from wooden poles along the side of tree-lined roads. It wasn’t about better horses and it’s not about better utility poles.
I am regulary asked by people if Pentad does Temp or Perm and what industry we specialize in. As we start to move toward different ideas of workforce augmentation, we have to think beyond these two categories.
Brought down to the simplest terms, more experience, skills, education, training and certification will bring with it more compensation. Job seekers price what they have to offer, hiring companies make offers and the two come together to determine a market value for a particular position. On the line chart below, we can see that the further out we go with experience, skills, etc., the higher we go in compensation.
In theory, at least, we could draw this line for any position. The line may not always be a straight incline. It may spike if a certain desirable criteria is met (MBA for example,) or it might go flat if additional experience or training does not add value to the job. But, in any case, good talent is going to live on or around the line because market forces drew the line – the ongoing give-and-take between job seekers and hiring companies.
I have met a lot of candidates in today’s economy who have found that their salary expectations are not in line (no pun intended) with the market – position X on the next chart. That’s a difficult and emotionally charged situation to come to terms with. However, continuing to hold out for a position that pays what it used to, instead of what the current market is willing to offer is not a solution. It’s hard not to take it personally. I encourage these candidates to take a two-step approach to their predicament. First, understand the prevailing compensation for your package of skills and experience and aim your job search at those positions. Second, work out a mid-term plan to reassess your needs and to re-train for a career shift. In other words: earn what you can for now and begin preparing yourself to come to the market again with a new package to offer.
In smaller and mid-size companies it’s becoming more common for me to see job orders with unreasonably low compensation packages – position Y on the chart. I think this is driven by the need to lower costs/work with less and by the idea that the current unemployment situation must contain good people willing to work for less money. This idea – that you can find an excellent candidate at below market rate – is almost always doomed for failure. The right place to look for an excellent candidate is on the line. Yes, there are a lot of good stories out there that go something like, “I found this guy who [insert great skills and experience here] but then [insert some extreme situation here] so he didn’t want to go back to [insert great job here] and I got him to work for me at [insert ridiculously low salary here.] Best hire I ever made!”
I’m not saying it never happens; I’m just saying that hoping it happens again is not a good plan. Finding a ten-dollar bill in the parking lot on your way to the office is a nice way to cover lunch today; it’s a bad plan for eating on an ongoing basis.
When you identify a job seeker as an excellent candidate, you are probably not the only interested employer he or she has interviewed with. So the odds of landing a truly competitive candidate at below market compensation are not good. If you are successful in landing the candidate -
unless you have some compelling reason for him or her to stay with you – you are likely to see your new employee leave as soon as a more competitive offer comes through. And no company can afford turnover that can be prevented.
I remember an old comic from when I was a kid. The one guy is looking for something and his friend asks what he’s looking for. It goes
something like this.
Joe: “I lost my wallet.”
Mike: “Then why are you looking here in the kitchen?”
Joe: “Because the light is better here.”
The place for you to find the employee you are looking for is on or around the line. Looking for a competitive advantage by hiring talent below market compensation actually puts you at a disadvantage while you spin your wheels, make bad hires and lose key staff to your competitors.
What is an excellent candidate? If you are an employer think of the top 10% of your workforce – the ones you can’t afford to lose. If they go on the job market tomorrow, they would be excellent candidates. If you are an employee or job seeker, think of those coworkers you have worked with who seem to always fire on all cylinders. Both management and coworkers respect them.
This all came full-circle to me today as I was reading. I came across an informal discussion among HR professionals in an online forum. I was surprised to see that several participants, when asked about their greatest challenge, answered: retention. My surprise, I guess, came from this being a time of sustained high unemployment. This whacky economy and the challenges it creates had taken my long held opinion and tucked it in the back of my mind. It became clear to me that these HR Managers, even in times when there is no shortage of applicants, were concerned about keeping their top 10% – their go-to group – because excellent talent is always in demand.
An article in the Wall Street Journal from March 2011 reads, “More Expect to Change Their Jobs.” Based largely on a survey by MetLife, it seems many employees who have been worn down over the last three years by higher productivity demands, wage freezes, austerity programs and the fear of unemployment are poised to make a move when the time is right.
Will you retain your company’s excellent employees? Will you be able to identify and recruit excellent talent?
Economic times like these mask the underlying danger. Excellent candidates, when they are ready to move, will find success. The periscope goes up, they identify job opportunities, get into a few hiring pipelines, are recognized as excellent (we all know them when we see them) and land jobs.
If you are an employer who has not been thinking much about retention lately, it’s time. Get together with your key managers and do the math. What do you have to do to make sure your excellent employees don’t become someone else’s excellent candidates?
If you are an employer who will be hiring, do you have a plan to make sure you’re talking to excellent candidates? They’re probably not in a candidate database waiting for a call because their shelf life is short. What do you have to do to make someone else’s excellent employee your excellent candidate?
Information on Unemployment, provided by the Bureau of Labor Statistics can be found here: http://www.bls.gov/bls/unemployment.htm
The Wall Street Journal Article “More Expect to Change Their Jobs.” can be found here: http://webreprints.djreprints.com/2661440829128.pdf
The forum discussion asking, “What’s the Biggest Challenge you Face as an HR Professional?” can be found in the LinkedIn SHRM User Group. Go to: http://www.linkedin.com Navigate to SHRM by searching Groups. (You may have to join to get in if you’re not a member – or go ask your HR person for it.)
When the candidate called me after his interview, he said he didn’t think he ever really connected with Ken. This seemed odd to me – these guys should have hit it off. But stranger things have happened and there have been enough times where the candidate thinks things went poorly and the client thinks things went well, so I called Ken with an optimistic mindset.
When I asked Ken how the interview went, he said, “I don’t know, Frank. The first thing the guy did when he sat in my office was to put his keys on my desk.”
“Oh, he did,” I replied, not sure what to make of this – not the best thing to do as a guest in someone’s office, but not exactly a criminal offense, either. “How did things go after that, Ken?”
Ken couldn’t really tell me much of what he thought about the candidate’s skills and experience as it related to the opening. Ken had closed the door, mentally, on this candidate and went through the motions of an interview.
Ken allowed an early, subjective measurement of the candidate to weigh far too heavily on his decision-making. He went out of order.
Yes, I think there is an order by which a candidate’s criteria should be evaluated. Subjective criteria should be the last stage of the evaluation.
I separate the criteria on which a candidate should be evaluated into three types:
Directly measurable criteria are the easiest to evaluate. Often you know the results before you meet the candidate from his or her resume and the recruiter’s notes. Education, Salary History, Years of Experience, Certifications, etc. are all criteria one can measure with a high degree of certainty that anyone else interviewing this candidate would come to the same decision. Covering it at the front end of the interview is a good way to start a dialogue and build a foundation for the rest of the interview. A lot can be learned from how a candidate articulates his or her qualifications orally as compared to how they related them in the resume. Ken should probably have spent the first 10-15 minutes of his interview in this area.
The criteria that cannot be measured directly must be measured by the interviewer’s interpretation and analysis. This set of criteria might include things like: stable work history and good job transitions; ability to thrive in an environment where more than 50% of compensation is variable; has a history of being able to work independently, etc. Measures of a person’s character fall into this area as well: honesty, desire, motivation, ambition, etc.
So how do you take a yardstick to evaluating this more vague block of criteria? Start by taking an honest view of your own evaluation and ask yourself, “would a majority of managers in my position come to the same conclusion?” If you can say yes to that question on a particular criterion, put it in the Objective column. If you cannot say yes on a particular criterion, put it in the Subjective column.
In the end, you will have three sets of criteria against which to measure your candidate: Directly Measurable, Objective and Subjective. There is still an element that is unknown – the Subjective. But at least at this stage you can weigh it against something solid when working out your final decision.
The inappropriateness of a visitor putting his keys on Ken’s desk might have weighed heavily unto itself. But, where it properly measured against a strong combination of education, skills and experience with a demonstrated history of success, it could seem light.