Monday, September 28, 2009

Goliath Returns To Fight Small Business...

The trend of giant corporations comes and goes. In the mid 90's, huge corporations had retreated. By 1996 a full quarter of IBM's workforce disappeared when they laid-off 122,000 employees inside of five years. For the first time in its history, Boeing operated with a majority of its work done by contracting out 52 percent of its work because it couldn't manage its size. Continental, Pan Am and Midway, airlines with great traditions and a history of innovation, split up due to bankruptcy. Shareholders demanded blue chips do more with less. Corporate boards sought automation to replace workers and entrepreneurs were outsmarting their bloated foes.

Indeed, small start-ups were in high fashion. Dozens of disk-drive start-ups blossomed along with biotech start-ups and of course there were the's. Large service companies were viewed as less responsive and the best talent sought quick and nimble businesses like eBay and Yahoo. Workers were attracted by the upswing potential of an IPO and they wanted to take more risk. Everyone sought a ground floor opportunity. The era of the Goliath Corporation was ending.

Gigantic corporations have returned. An uptick in mergers and acquisitions is evidence that conglomerate partnerships will weed out mid-sized companies and produce huge corporate businesses. Last week Dell Inc. said it would buy Perot Systems Corp. for $3.9 billion, Oracle Corp. is closing a $7.4 billion deal for computer server and software maker Sun Microsystems Inc., and today Xerox will acquire ACS for about $6.4 billion.

These big companies have tons of resources that will allow them to emerge from the downturn stronger. Recruiting and retention efforts will focus on placing internal candidates first; to fulfill their succession plans and increase the satisfaction of its workforce. Large talent acquisition budgets will allow their internal recruiters to advertise open positions to large targeted demographic pools of candidates and large job fairs will lure crowds of job seekers that will fill out applications and compete for job openings. Large companies benefit from the fact that risk is not as attractive as it was in the late 90's.

What resources will small business have to compete for talent in the global economic recovery? The biggest advantage is that small (50 to 250 employee organizations) don't have to deal with the endless standardization and resoundingly-slow procedures that large companies mandate in their hire process. Corporate bureaucracy is real and is a huge disadvantage that doesn't hinder small firms. The consequences include great candidates that die on vine waiting for feedback on their resume or their interview results. Small companies can make decisions and actually put people to work without a comity reviewing the Meyers-Briggs personality profile of a candidate.

Smaller companies can compete for talent by using niche job boards or targeted recruiting firms. Since it takes time to review large stacks of resumes, the targeted approach reduces the time to compile a short list and professional recruiters actually manage schedules, calls, and meetings for their clients. Smaller firms should start building a pipeline of candidates that they can hire now while their Goliath counterparts are moving at the speed of molasses to hire fresh talent!

Sunday, September 13, 2009

Double Digit Growth...

According to the American Staffing Association, the recruiting business has realized double digit growth after each of the past three recessions. Like prior recessions, when this bear market hit, employers focused on cutting cost, workforce reduction, and hire freezes. Surviving companies in the current market have retained only their strongest people. Much of this attrition will prove positive for firms that have used or are using this opportunity to eliminate unproductive employees and trouble makers.

A recovery is imminent. Businesses will thrive again and consumers will consume. Economists have highlighted several indicators that show a slowing rate of decline and many sectors have shown some kind of uptick. This week, the head of the Federal Reserve proclaimed the end of the US recession. If the end of the recession is in sight, what should companies do, right now, to position themselves for a successful rebound?

If historical data is a road-map, we should consider the recession set off in 2001 after September 11th. In that recession, companies moved quick to shed their workforce. Layoffs and hire freezes became common place and organizations value fell in rapid succession. Employers delayed growth initiatives, hesitated to invest in anything, and new start ups were scarce. Some sectors like travel and hospitality thought they would never bounce back.

However, experienced and savvy companies that reviewed their history books, took advantage of the talent surplus before June of 2003, when a recruiting war began and companies were aggressively filling empty seats to compete in the bull market recovery. Similarly, inexperienced and fearful companies failed to act quickly. They overspent, and lost out on the best talent. This is how companies end up with unproductive employees and trouble makers.

Smart and savvy firms will prepare now for post recessionary growth by making an active decision to capture bright, insightful talent before demand returns. It would be wise to develop a large candidate pool in each of the functional areas or labor categories that drive the business of the company. Not just sales people but developers, analysts, technical, management, and marketing professionals. The wider the net cast, the greater the chance of catching the right fish. Professional recruiting firms can develop the pool so that companies only talk to interested and qualified talent. Smart companies won't behave poorly while shopping for talent. (see my It's an Employers' Market blog)

Decisions are being made right now to be smart and savvy or frozen and fearful. Companies that choose to build a pipeline of talent and start shopping for a growing workforce will be miles ahead of the companies that wait and see. Choosing to wait for things to turn around will prove to be a costly mistake. The demand and fight for talent will be expensive. Don't wait for double digit growth to call your trusted recruiting firm.