Why This Recession Has Been So Tough on Recruiters

Why This Recession Has Been So Tough on Recruiters?

by: Kevin Wheeler

This recession has been merciless to recruiters. I don’t have any statistics, but anecdotal evidence indicates that thousands of recruiters have been laid off and that hundreds of recruiting agencies have closed their doors.

Sometimes the recruiters who been laid off have just been unlucky enough to have worked for an organization that is failing or in an industry that has been strongly affected by the recession. Yet, others have been laid off partly because of performance or attitude. Many recruiters remain tactical, and fail to grasp how strategic their function is to a firm. Many have remained working for leaders and organizations that do not appreciate how much they could contribute to the success of the business. And even fewer have become leaders who take command of the recruiting process and forge a function that competes effectively against other organizations and consistently supplies their organization with quality talent without relying on the use of extraordinary measures.

In my many years in the profession I have only known a handful of these people. Most corporate recruiters become recruiters by accident and leave the profession for some other HR or related field after a short stay. Their stay is a roller coaster of half-completed technology implementations, high staff turnover, muddled objectives, and often leaves a legacy of unhappy hiring managers. To achieve even the simplest objectives, they have to use outside resources, employ a large number of recruiters, or seek to outsource the function.

Unfortunately HR has not positioned the recruitment function as strategic, nor has HR realized that the role of talent manager, aka recruiting and development leader, is emerging as one of the most potentially needed (and influential) professions within the organization.

Generally, those recruiters who lead the effort to supply scarce talent are filled with bad habits and uncertainty that create a revolving door of leadership and produce lackluster results.

To change this and move toward a position of respect and strategic leverage, recruiting leaders should examine their own behaviors and thoughts and see if they reflect any of the habits I list below. If so, now is the time to change.

Bad habit 1: Arrogance about yesterday’s tools and techniques

Yesterday’s successes probably will not be repeated by using the same techniques or technologies. Over-reliance on techniques like cold calling, telephone screening, and resume reviewing are examples of methods that have seen their heyday but are still widely championed and loved. I frequently talk with recruiters who swear that the old ways are the only ways — the best ways — and insist that everything from interactive websites to LinkedIn are just fads.

Tomorrow belongs to recruiters who embrace such emerging practices as social networking, video interviewing, online assessment, and candidate relationship management. Recruiters experimenting with virtual communities and with building online relationships already have a advantage over the recruiter who is tied to geography and to face-to-face meetings. Labor markets are not confined to single countries, work can increasingly be done anywhere, and recruiting is a virtual, global game.

Bad habit 2: Filling requisitions instead of meeting business objectives

Most recruiters are obsessed with filling slots. That is what they have been taught to do without regard to need or effectiveness. They have a hard time discussing the value of positions with hiring managers who often regard the recruiter as little more than a clerk trusted to filter piles of resumes that are supposed to magically be arriving each day because of the organization’s prominence or brand. They are given requisition to fill and they dutifully go forth and do so — even if it is a poorly defined job or one that might be done by someone with a different skill set.

Recruiters who have the respect of the organization’s leadership have to be brave enough and well-enough informed about current issues and business needs to engage in meaningful conversation with a hiring manager. They have to be equipped with knowledge about the organization’s strategic business objectives, the needs of the hiring manager, and the state of the talent marketplace. They need to present numbers and data and make a case for hiring the competencies and skills that will be most effective in meeting the business needs of the organization.

In short, they need to act as a resource and consultant to hiring authorities and show a deep knowledge and understanding of the needs of the business. And, on top of this, they then need to be able to fill the position from a talent community they have built in anticipation of the need.

Bad habit 3: Failing to build new competencies

The emerging competencies for recruiters include the ability to engage people in conversation using virtual tools, the ability to collaborate virtually on projects, to influence hiring managers, and build targeted marketing strategies. These are totally different skills from those that dominated the profession a decade ago. In fact, over 80% of the skills that made a recruiter successful in 1997 are of little value today. For example, interviewing skills, cold calling, and reviewing and screening resumes are not critical skills. Even less understandable are the recruiters who are competent at interviewing and who then focus on getting even better at it instead of on developing skills that might be more useful. It is very easy to rely on the competencies that made us successful and not notice that times change as do the skills we need. Far more important are the ability to write a blog, influence a candidate, and identify the value proposition of an offer.

Bad habit 4: Functional Shortsightedness

More and more of the most strategic recruiters I run into have a background in disciplines such as marketing, sales, and operations. Fewer are coming out of traditional HR disciplines. And an elite handful is morphing into talent managers — people who can understand and integrate recruiting with employee development, competency analysis, performance management, and succession planning. These recruiters are not afraid to try out new approaches, nor are they afraid to experiment and leverage technology. The most innovative websites and process improvements are emerging from recruiting leaders who have no training as recruiters and who have recently entered the field. They are writing exciting blogs, using search engine optimization techniques, and experimenting with interactive websites and tools.

The recession may be tough on recruiters, but it is also forging a new breed of talent expert. Recruiting inside organizations is evolving into talent management and the focus will be on ensuring that the organization has the critical talent it needs to achieve business goals. The talent manager will need to be able to run scenarios, produce numbers, and show where the best talent comes from whether it is developed internally, hired from inside or brought in from outside.

Out of every recession have come new ideas, new functions, and exciting change. Recruiting is at the forefront of many of the changes and for a small number of you it will be an invigorating time of learning new skills and adopting new techniques, habits, and technologies.

About the Author:

Kevin Wheeler,the President and Founder of Global Learning Resources, Inc., is a globally-known speaker, author, columnist, and consultant in human capital acquisition and development. His extensive career, global client base, and research affiliations make GLR a leading provider of both strategy and process. GLR focuses on assisting firms architect human capital strategies. GLR guides firms thorough comprehensive talent acquisition processes and procedures as well as the development of talent within organizations of all sizes.

Tips to Keep Your Job during a Recession

Tips to Keep Your Job during a Recession

The state of our economy is in demise. People’s current financial situation is unpredictable and tentative. Every time one watches the news or looks at the headlines in the newspaper, it seems as though there is more and more bad news concerning the recession. Even large, prosperous companies have experienced serious downturn. Employees suddenly find themselves jobless or with reduced hours without inviting the situation. People who previously considered their jobs secure are now faced with possible lay-offs.

If the company you work for is slipping significantly, there is not too much you can do to alter the situation. However, many companies, although they have to make cuts, will survive and endure. If you want to be amongst those chosen to keep the boat afloat, then there are several things you can do to help your chances.

Go through extra effort at work. With many companies, layoffs are unavoidable. However, some companies can use the occasion to eliminate difficult or under-performing employees.

Here are a few things you can do to improve your chances of keeping your job during a recession: (The resources for these tips can be found at the end of this article)

1) Take Credit For Your Accomplishments.
This does not mean that you have to brag to let management know that you are doing a good job. It simply means that you should keep them in the loop. You can do this by creating a paper trail. CC your boss on appropriate emails that relate to the progress of specific projects and important deadlines. Also, make sure to forward short updates and summaries of ongoing projects to your supervisor intermittently.

2) Avoid Asking For a Raise.
If you are aware that your company is making cuts and know that their budget is tight, do not ask for a pay increase. By asking for a raise in such times, you can put yourself at the top of the lay-off list.

3) Do Extra Work.
Stay busy. If you have some free time, ask your boss if there is any way you can help out and if there is additional work to be done. This will increase your visibility and value to the company. Although volunteering to do extra tasks is a great way to keep your job, do so only if you can complete it in a timely manner and if it does not deter you from your original tasks.

4) Be Visible.
Enhance your visibility by attending and participating in meetings, offering creative, new ideas and taking part in company outings. Be sure to let people (preferably those in higher positions) within your organization are aware of your existence. Moreover, do not make your boss have to look for you. This is the wrong time to take an extended vacation. When you return, your position could be eliminated. Also, do not come into work late, that is negative visibility as people will notice.

5) Build Up a Relationship With Your Boss.
Talk to your boss, your boss’s boss, and their boss. Get to know your boss, preferably on a work-related basis. Build up and maintain a strong relationship with them, and make sure they know about all your contributions to the company and the valuable work that you do.

6) Be Conscious of the Company.
Make sure you know what and how your company is doing. Keep your eyes and ears open. It is important for you to stay abreast of events within your company, your industry and nationally. By being well informed, you will advance your personal worth.

7) Avoid Gossip.
Gossiping can possibly end up getting you into trouble. Make sure to stay happy and positive. At times like these, people can become unhappy and despondent. Misery loves company and you can generally find huddles of groups talking themselves into a group melancholy. It is best to avoid them as nothing good can come from it. Keep your sunny and positive attitude and boost the morale of others.

8) Come Up With New Ideas.
Be creative and conjure up new ideas on ways your company can make money or be more efficient. Become a part of the solution by helping your company develop ways to cut costs. Furthermore, possibly mentor someone in the organization who may be experiencing difficulties. Your time will not be in vain.

9) Update Your Skills.
Keep up-to-date of all the latest technologies, trends, and other skills related to your work. Educate yourself. Think of ways to complement and enhance your current degree. If you do not have a degree, strive to get a degree or at least a certification of some sort. Make sure your boss is aware of your intent to continue or develop your education. Companies dispose of people whose skills are outdated and replace them with people who have more relevant and modern training. The benefits of enhancing your education and skill set are two fold. Firstly, it can make you indispensible at your current job. You may even be asked to take on more responsibility. Secondly, if you lose your current job, it will be easier to find a new one.

10) Observe The Job Market.
You should always have a backup plan. Passively look for jobs so that you have a head start if you are laid off. Network with previous employers or colleagues so that you can contact them in you ever need to. Update your resume, return agency' phone calls, and start picturing where else you might like to work just to be on the safe side.

11) Become Indispensable.
Become a specialist at some aspect of your companies business. If you have acquired knowledge or skills that your colleagues do not possess, it makes you more valuable, important and irreplaceable to your company. Be an asset to your company.

12) Become a "Can Do" Employee.
Employers like it when they can give you a problem or task and know that it will be undertaken promptly and resourcefully. Your bosses will notice this, and your value within the company will grow.

13) Stay Put.
Evade the thought of moving to a new employer unless you are totally confident that your present company has no future. No matter how good the job is or may sound, being the new member of the team makes you highly vulnerable in these economic slumps.

14) Stay Smart.
Make extra efforts to go into the office smartly dressed. Do not let your standards drop. It may sound hard to believe, but being a smart individual could mean the difference between keeping and losing your job.

15) Don’t Be a High Maintenance Employee.
Be easy to work with. Avoid complaining. Make sure to uphold your professionalism at all times. Furthermore, avoid taking too many sick days, arriving late to work, or taking excessive vacations. Be as efficient and accessible to your boss and coworkers as possible.

16) Get to Work Early & Stay Late
This does not mean that you have to work until midnight. However, try to avoid being the first one out the door when the clock strikes five. With the current economic storm, putting in a few extra hours is an investment in your future.

17) Minimize Personal Activity.
Keep personal calls, emails and text messaging to a minimum during the workday.

18) Give Your Leaders a Break.
As much as we may find objectionable certain actions of bosses, it is important to realize that they really do not take pleasure in having to lay off their people. Endeavour to ease the leader’s load and help them protect and preserve your department.

19) Stop Complaining.
A good attitude goes a long way. At times like these, management is looking people who can boost morale. In addition, happy, positive workers are less likely to get laid off than people who seem to have an aversion to what they do.

20) Be Likable.
It is not easy to be light-hearted when financial situations are rocky. However, research by Tiziana Casciaro and Miguel Sousa Lobo published in a 2005 HBR article, "Competent Jerks, Lovable Fools, and the Formation of Social Networks," found that when people need help with getting a job done, they would typically opt for a friendly and pleasant co-worker rather than a more competent one.


Resources:

http://www.hr.com/SITEFORUM?&t=/Default/gateway&i=1116423256281&application=blog&elementID=1234479098459

Is the current global meltdown beginning to affect the Indian youth?

Frowning faces, twisted eye-brows, shrugs and shudders are amongst the most common expressions radiating from people all over, irrespective of their profession, class, age, experience and all those parameters which, in a utopian world, would have ensured infinite glory, if not job security and certain future. What started out as a sub-prime lending crisis in the U.S. has now transformed into a 'shock wave' giving everyone a taste of the tremor it beholds. And nobody is left untouched by the present global financial fiasco - not even the youth community, which had only recently understood how grave inflation could be.

Being an engineering undergraduate, it's not difficult for me to explain how the ready-to-step-into-the-corporate-world-undergraduates of different engineering domains are facing a bolt from the blue. With lay-offs, pink slips, downsizing, and other scary synonyms hitting the front page of the newspapers, students aren't quite surprised to learn long before that a number of traditionally top-recruiting companies won't even be visiting the campus, forget recruitment. The companies that did visit reflected the current scenario in terms of the 'infinitesimal' number of students finally recruited and their relatively meagre pay package. Even young graduates who had, some years ago, successfully made into different MNCs echoed similar sentiments.

Having said that, 'there are always two sides to a coin'. The lucky side tells a different story altogether. The chain of events over the last fifteen months or so culminating into the present global meltdown, although sad, has both inspired and pushed the youth to develop a completely global outlook and take calculated steps in all their ventures. They have quickly understood that this scenario requires an utter professional approach and it's time we took things not for granted. This thinking is reflected in their future course of action. The best example would be that of the IIM students, a major number of who are more interested in self-ventures, as entrepreneurs, or committing to a 'start-up business'. Now, as entrepreneurs, they would ultimately create a wide range of avenues for others, thus, countering situations like that of now.

'In the medieval times, being unable to read and write was a curse. In the modern era, lack of monetary knowledge is a curse'. The youth today has quickly realized the practical importance of these words and therefore, there has been a gradual and steady inclination towards getting the basic skills right when it comes to finance and its derivatives. It won't be an exaggeration to assume that soon there will be a time when the global-financial-system-management wouldn't lie entirely in the hands of the 'grey-beards', which is apparently the case now. Moreover, it all works out good for a country, in particular, which can be rest assured of a strong economy largely impervious to foreign influences. And more so in case of India, which houses around 55 per cent young and eager-to-learn blood.

Another very important lesson learnt is the perils of globalization. For some time now, the youth of India, to a large extent, had an undimensional outlook towards globalization which had largely, and not entirely rightly, influenced their approach to various opportunities. Now would be a good time to rethink.

By and large, the current financial crunch has affected the Youngistan in more ways than one. Arguably, the positive impacts far outweigh the negative ones, and in due course will prove its worth.

Ref: http://www.timesascent.in

Layoffs not the Best Solution in a Downturn

Layoffs not the Best Solution in a Downturn

"Will I able to survive in my organization or will my organization survive in this bad time?" is a question which every person is asking himself/herself these days. In today's phase of economic recession, every organization and employee is concerned about his/her fate. Companies are trying to cut costs as much as possible and the most common way to do that is ‘layoffs’. Small, private firms do not have as much pressure to cut costs if the owner believes it is possible to ride out the storm. Conversely, in a public firm, even if a CEO is inclined to seek alternatives to layoffs, pressure from shareholders and analysts to cut staff might be too great.


Layoffs are done to save money; unfortunately, they are usually a short term fix, detrimental to the companies. In a study of 531 large organizations, three quarter reported having cut pay rolls. Out of these 85 per cent that sought higher profit, only 46 per cent saw any measurable profit; 58 per cent sought higher productivity but only 34 per cent saw even the slight increase; 61 per cent wanted to increase customer service but only 31 per cent achieved this. So layoffs are not the best option even in the period of economic recession.


Many companies fail to realize that they have already invested a huge amount on training and development of their employees. A company can save for a short term by conducting layoffs but it also has to spend more in training a new batch of employees once the economy picks up.


A company may lay off employees, but in the process it creates an atmosphere of uncertainty which causes others to leave the organization. The first ones to leave the company due to uncertainty are usually the ‘best’ people. The ones who stay back are stressed most of the time. Thus, the climate of uncertainty followed by a layoff always results in reduction in not just the quantity but also the quality of staff.


The first question to ask before any layoff is - Is the need for the layoff driven by having too many employees or too little profit? Using a layoff solely as a cost cutting measure is highly not recommended; removing valuable talent and organizational learning by laying off employees only makes a bad situation worse. And it reduces the efficiency of remaining resources as well as the potential for future growth. Scott Paper laid off 10, 500 employees in the mid-1990s. In the years that followed, Scott was unable to introduce any new products and saw a dramatic decrease in profitability, until it was eventually bought out by competitor Kimberly-Clark. If the answer is too many employees, the management needs to look at the organization's business plan, not its head count.


Whatever the route, layoffs is a toxic solution. So except in few circumstances where laying off is the only option, the management should try other options like job sharing, pay cuts, reduced working hours etc. These measures, most of the time, are sufficient to pass out a bad phase.

Ref: Kamal Kapoor

Employers Believe Hiring Will Improve as Unemployment Numbers Worsen

Employers Believe Hiring Will Improve as Unemployment Numbers Worsen

Despite some bleak employment news this week, a large number of executives appear to be bullish on a need for talent.

More than three-quarters of executives surveyed by Korn/Ferry International Inc. say demand for talent will increase more in the next five years than in the previous five.

In addition, 52 percent predicted a recovery in 2009, with 35 percent saying it will be the second half of the year before there are signs of improvement. Another 39 percent said labor market challenges will linger until 2010.

Half of executives looking for jobs said they are “very confident” in their abilities to find one in 2009 that meets their expectations.

The Korn/Ferry report, released Thursday, February 5, arrived as the number of initial jobless claims in the U.S. climbed 5.9 percent the week ended January 31, the Department of Labor reported.

There were 626,000 initial claims for unemployment filed, up from the previous week’s revised figure of 591,000, according to the report released Thursday, February 5.

The Labor Department report corresponds with the most recent Monster Worldwide Inc. employment index, which fell 13 points to a reading of 118 in January. It is down 42 points from a year ago.

“The fact that employers have chosen to begin recruiting in 2009 on a cautious note is not surprising given the uncertain nature of the global economy,” said Jesse Harriott, senior vice president and chief knowledge officer at Massachusetts-based Monster.

“However, there are a few bright spots, including recruiting activity in public administration as well as in the agricultural sector. Furthermore, online recruitment activity still remains higher than levels seen during 2003 after the last recession.”

Monster’s index is based on a review of online job ads taken from a selection of corporate career Web sites and job boards, including Monster.

Ref: http://www.workforce.com/section/00/article/26/15/94.php

Someone Is Getting a Raise—But Perhaps Not You

Someone Is Getting a Raise—But Perhaps Not You

To the employees who thought 2009 was the year of the pay freeze: You were wrong, at least so far.

Contrary to the sour economic mood, employers are giving salary increases averaging 3.1 percent in 2009, according to a survey of 1,000 employers by human resources organization “World at Work”. Only 10 percent of employers are freezing salaries of their workers, both “World at Work” and Hewitt Associates report in separate surveys of employers.

Still, wage growth is slowing and is expected to slow further. Companies projected lower salary increases in December than the 3.8 percent increase they had anticipated when “World at Work” surveyed companies in April about projected salary increases for 2009. As companies revise their budgets, they are lowering raises. Still, it’s better than nothing—which is what about one in 10 employers say they will give non-executive-level employees this year, according to the study.

“Organizations are scaling back, but there seems to be a very clear effort to reward employees,” said Alison Avalos, practice leader for Scottsdale, Arizona-based “World at Work”.“If you have a job … you’re in a good position to receive a pay increase this year.”

In another survey, Hewitt Associates reported that 50 percent of U.S. employers are cutting salary increases for 2009. Perhaps more important, 35 percent are laying off workers and 39 percent have instituted hiring freezes.

Other economic indicators paint a much gloomier picture: The Dow Jones industrial average has dipped to below 8,000 from a high of 14,000 in October 2007; the Consumer Confidence Index dropped to another historic low in January, the Conference Board reported January 27; and the Bureau of Labor Statistics also reported last month that in 2008, salaries increased an average of 2.6 percent, less than the projection for 2009 by “World at Work”.

Conference Board economist Ken Goldstein said changes in wages often lag behind declines in the economy and lost jobs.

“With a loss of half a million jobs in November and again in December, and very likely in January, wage growth will slow even more over the next few months,” Goldstein wrote in an e-mail.

According to “World at Work”, executives were more likely to take a pay freeze. About 17 percent of employers surveyed said executives would not receive a raise in 2009.

Across industries and regions, businesses reduced the raises they originally planned to give employees. Half the businesses responding to the survey said their company’s financial performance was worse than in 2007 and that they anticipated a decline in business this year.

Contrary to expectations, hard-hit industries such as manufacturing and finance were no more likely to reduce payouts than other industries, despite receiving federal bailout money.

“It seems those industries are no more affected than any other,” Avalos said. “Everyone has scaled down to the same degree.”

Manufacturing companies said in April that white-collar workers would receive a 3.8 percent raise for 2009, equal to the national average. In December, when the latest survey was taken, the industry reported that white-collar workers would receive an average 2.9 percent raise.

Financial companies projected in April that they would increase salaries for white-collar workers an average of 3.9 percent; as of December that number was 3.2 percent, in both cases just above the national average.

Depending on how one looks at it, the small percentage of workers who had their pay frozen will not see their overall buying power drastically reduced. The Consumer Price Index, a major indicator for gauging inflation reported by the Bureau of Labor Statistics, rose 0.1 percent as of the end of 2008 compared with a year earlier, as the drop in fuel prices brought overall costs down.

Ref: Jeremy Smerd

Obama's HR Policy For Tough Economic Times

Obama's HR Policy For Tough Economic Times

Barack Obama said "Hire above the job". Hire a person who is overqualified, especially in these times. They will be eternally grateful, and work twice as hard.

But if we analyze it correctly and try to understand its consequences, it comes out to be not a very easy task. A report on the analysis and understanding on the industry behaviors is appended.

In these times hiring someone currently unemployed because of a layoff that is at or slightly above the basic requirements is a good practice because they will not only make a good addition for the organization in the short term but also provide value for future growth. As the organization grows the position may, in fact, expand to meet the actual experience level of the incumbent.

Successful organizations should always hire with growth in mind because it is easier to have the demands of a position grow around an incumbent than to have an incumbent be expected to grow into an expanded position.

So while one should always hire the most suitably qualified for a position, I think to simply hire a significantly over-qualified person would be a mistake. On the other hand, if a person is marginally over-qualified, then all well and good. They likely would be at the top of any "short list" for promotion as soon as economic conditions improve.

In these times hiring an unemployed person that has been laid off also provides an immediate stimulus for the economy, which may hasten growth for the organization. One other thing to consider when hiring, especially in troubled economic times, is that it is easier to hire pre-need than at need because in waiting for the at-need situation it may be very difficult to hire rapidly enough to meet the needs of the organization.

Please feel free to comment and give suggestions.

ECONOMIC MELTDOWN- THE NEW GLOBAL PERSPECTIVE…………

ECONOMIC MELTDOWN- THE NEW GLOBAL PERSPECTIVE…………

The ripple effects of global credit crisis has hit the world economy hard triggering global credit recession. As the world enters what many see as the worst economic crisis since The Great Depression, several factors begin to interfere with our daily life.

Before understanding the genesis of the recession let us basically know what is recession......

WHAT IS RECESSION AND TRADE CYCLE....?

The downturn of economic activities or a constant fall in demand is termed as recession. As observed the trade cycle boom precedes recession and depression and ultiamately recovery succeds recession.

THE MAJOR GREAT DEPRESSION

The Great Depression of 1929 was a worldwide economic depression that lasted approximately 10 years. On October 24, 1929, “Black Thursday” 12.9 million shares of stock were sold in one day, triple the normal amount prices .This great depression ended under the supervision of U.S President Franklin.D.Roosevelt.

THE CREDIT CRISIS OF 2008......

To understand the genesis of the current financial meltdown we need to start with the U.S housing market, a $22.5 trillion major economic driver larger in size than US stock market. Ratio of home prices to household incomes were at an all time high and appeared unsustainable as the home prices increased by nearly 85% overall with a per year compound rate of 12% between 2000 and 2005.

The idea that the housing prices would only appreciate caused US banks and mortgage companies to loosen their credit standards and start lending to families with no credit history and only tenous ability to service their mortgage. SUBPRIME lending , which in the us context meant lending to credit histories, grew rapidly during he housing bubble.

The first death knell for sub-prime mortgage holders was the increase in oil and commodity prices, which pushed up inflation and the all important interest rates. Unable to meet the higher payments, sub-prime borrowers began defaulting on their mortgages in large numbers. In various cases home owners walked away from the debt, ultimately resulting in sub-prime crisis.

Though this type of situation was encountered in the past, what makes the current crisis unique is its severity and global reach.

THE CRISIS SPREADS

It took nearly a year of falling home prices and subsequent mortgage defaults to leak into larger economy. $56 billion 'New Century Financial Corporation', one of the largest sub-prime lenders was one of the first banks to fall. Two investment banks, 'Bear Sterns' and 'Lehman Brothers' filed for bankruptcy. After the 158-year old Lehman Brothers failed, the floodgates opened for insolvencies. Most of the investment banks failed as unlike retail banks, they typically do not have capital. When the news spread that banks were in financial difficulties, the loss of confidence caused a run on several institutions, and mainly banks in Europe and USA became insolvent. Not surprisingly the US markets began a long and unchecked downward slide, eventually loosing 40% of its value.

IMPLICATIONS FOR INDIA……

Due to the sub-prime crisis, property prices have appreciated much more rapidly. India has opportunity to learn from America’s mistakes. With the whole American industry in recession it is likely that India's export may take a downward trend affecting the manufacturing sector thus resulting in loss of jobs. We are already feeling the pinch. Many IT professionals may also lose their jobs. The government of India with the assistance of RBI has taken measures to combat the recession effects in India, by cutting CRR rate, repo rate and interest rates.

For India to be unperturbed by the recession, a well functioning disclosure and regulatory environment, an infrastructure that supports clear communication to the investors and high quality audits are to be followed by India thus leading itself on the path of growth and making itself an economic superpower.

Suggested HR Strategies to Reduce Effects of the Crisis.

Suggested HR Strategies to Reduce Effects of the Crisis.

Communication.

Dedicate time to positive reasoning. Hold town hall meetings involving staff and management on ways to tackle the challenges of the downturn. Hear the staff out. Take time to listen to the employees for confidence building. During such engagement, declare immunity to cover all staff, in which any staff that offers to critique the organization is insulated from witch-hunting sanctions and victimization. This gives room for sincere invectives and inputs, which may turn the organization around for good. Staff should be encouraged to objectively give their assessment of where the organization was, where it is and where they believe the organization should be and what should be done to survive the recession. After listening to the staff, thank them for valued contributions and promise to work with their inputs. Reiterate the vision and mission statements of the organization. Appeal to staff to do everything possible to actualize the goals and objectives of the organization. They should show more personal and collective commitment, loyalty and dedication to the organization for improved productivity. Seek their support for the strategic action plans. At the same time, strengthen the two ways communication process and dedicate time to feed backs.

Positive team culture.

Stress shared vision, strategies and belief in team culture, improved symbiotic team spirit because of the positive value addition of synergy. HR Managers should at this time radiate and give hope and lift their staff from negativity to positivity. A positive team culture stresses collectivism, and symbiosis. Do well to stress the importance of every team member.

Learning.

Learning is the key that opens the individual employee to knowledge beyond his/her immediate reach. It helps to bring a strong barrier against failures and landmines that may bomb the organization out of existence. It assists the worker to open up to new initiatives, ideas and best practices. Design programmes that put the organization on top of the pack and enable the organization have a competitive edge. Staff may not necessarily be moved from their places of work because of the innovations in as e-learning and intranet services are becoming a way of life. Encourage staff to participate in workshops and conferences to enable them compare notes on experiences and learn from others. Where only a few staff can attend, those who attended should be given an opportunity to share their learning experiences with their colleagues at a forum.

Leadership focus during the downturn.

1. Transparency.
2. Accountability.
3. Courage to effect necessary changes.
4. Training.
5. Proactive strategy.
6. Sacrifice.
7. Incremental changes.
8. Address issues of insecurity.
9. Credible leadership.
10. Mentoring.
11. Coaching.
12. Nurturing.
13. Sifting down process between the effective staff.
14. Walk-the-talk.

Performance incentives.

. General Motivation techniques: Positive and negative sanctions
. Performance Incentive Bonus (PIB)

Review of organizational structure and procedures.


1. Reduce complex structure to a simple structure.
2. Increased autonomy to improve decision making process.
3. Concentration on core areas.
4. Elimination of tribal, political and racial considerations in the appointments of chief executives and recruitment processes.
5. Review of recruitment policies. It is a well known fact that in most parastatals of government in Nigeria, there are periods of employment freeze, unfreeze, refreeze and retrenchment at the fiat of the executive arm of government.
6. Review financial management procedures to optimize profitability.
7. Improve cost culture and asset utilization.

Redefinition of business value system.

This is a moment to re-examine the organization’s business value system, goals, roadmaps, strategies and practices to align with the anatomy and physiology of the organization. The vision of the organization should be cascaded down the ladder so that there will be a total buy-in; into the new ways of achieving the vision even at these difficult times. A shared vision sets the tone for the conscious will power to achieve the impossible.

Succession planning.

The chief executives of many parastatals of government are removed and replaced at will. The high turnover of the top management is the bane of poor performance of some organizations. It makes planning difficult, truncates strategic plans processes and kills any organization’s initiatives to achieve a well tailored succession plan, which is a Sequa-non for organizational success. There should be a reversal of this unwholesome process.

Attitudinal change.


. Paradigm shift in work culture and values.
. Stop the attitudes of being busy doing the wrong things. The aim is to change from busyness to effectiveness as being busy does not connote effectiveness. Being busy and working hard without focus does not translate to results the organization needs to be effective.

Job rotation.


Temporary postings to areas of unsaturated staff.
Equal opportunities.
Redeployment.

Pre-retirement seminars.

Pre retirement workshop.
Incentives for early retirement (discourages swearing affidavits to cheat on age).

Personal income management.

Almost all staff are now very heavily indebted to the banks with slimmer income. It is often said that the “take home pay of workers no longer take them home”. Staff of various organizations have found themselves in this conundrum in Abuja because of the need to purchase personal houses in other to avoid the cut throat high rents in the FCT.

Engage external consultants to talk to staff on personal income management and the need to prepare for retirement. HR managers should help enforce the one-third rule of loans over which a staff cannot approach the organization for loans so that staff will be able to maintain and cater for their immediate families at this critical time.

Proactive HRM.


1. Application of emotional intelligence strategies.
2. Fair HR practice in the use of the carrot and stick approach.
3. Assessment of the competencies of employees and productivity level. Do not wait for the end of year.
4. In-plant knowledge sharing forum should be enthroned to encourage staff to share their knowledge in an in plant workshop. This will assist the organization to source for and maintain a knowledge pool in the organization.
5. Change management. Change will be effected in bits and not radically so as not to further stress the staff.
6. Review the organization’s customer management processes.
7. Enthrone an integrated research and development processes.

Performance evaluation.Enthrone an effective performance management system.

Performance evaluation should focus on:

1. The organization.
2. Departments.
3. Customer service.
4. Teams’ performance.
5. Processes.
6. Individuals.

. Solutions to challenges rather than sanctions, condemnation and the blame trade.
. Seek to be understood before seeking others’ understanding.
. Expectations should be mutually agreed using basic standard benchmarks.
. Consider individual strengths, experience, priorities, inner motivation (is he a loner, extrovert) and confidence in assigning tasks.
. Acquire the skills to align the staff skills and competency to align with the organizational objectives.
. Monitor performance (don’t wait until the end of the year).
. Reward top performers and ascertain collateral damage if any.
. Investigate and sanction poor performance.
. Watch out for the aftershocks of performance evaluation.

Any of the following models could be used to address the performance challenges that organizations may face during the periods of financial crisis:

. The Balanced Scorecard (Kaplan and Norton provides the theoretical framework for the Balanced Scorecard (BSC) with four perspectives - financial measures, customer knowledge, internal business processes, and learning and growth. The BSC helps the organization to strike a balance between short, medium and long-term objectives. The BSC is a tested tool change processes.
. Ulrich model.


Ref: http://louisbrownogbeifun.com/?p=55

3 steps to positive HR with a recession looming

Demand for HR increases with a recession looming


I’ve just done a quick search on Google Trends of what we, the citizens, are saying. Pop a few terms in yourself. What patterns do you see?

Talk of recession rose sharply in January 2008 and has leveled off.

There has been a lot of talk about lay offs but less about job losses. Semantics possibly, but also talk about what management does to us rather than what we experience?

Increasing searches for HR and a steady decline in interest in leadership.

It makes sense that people are more interested in HR when job losses are in the offing. This pattern seems to be more pronounced in India and it is not possible to tell whether India is creating the global trend by force of numbers, or creating the trend by the direction of its attention, or simply the place with the most pronounced pattern.

The role of HR during a recession

Though it is an important concern, I am not particularly interested in whether there is a recession or not. What concerns me is that we cannot create a good future until we can imagine it.

And I am concerned about the role we in HR play in helping people imagine a positive future. People come to us when they are in trouble and feeling negative. People come to us when they cannot see a way forward. The graphs on recession, leadership, HR, hope and strategy show that people are not even looking for hope, strategy and leadership when they are looking for us!

Our key task

The challenge, for us, is that emotion is highly contagious. Natural empathy will allow us to be infected by our clients’ gloom.

But they don’t want us to share their gloomy predictions. They want positive action from us. They want us to advise them and to act effectively on their behalf. This is what concerns them.

1. What are their options and what can the firm do to help them?
2. What could we do with our skill base that we haven’t thought of?

Practical steps to positive HR in gloomy times
So if we are likely to reflect and perpetuate the gloominess of our clients, how can halt this process and restore a positive, forward looking, strategic atmosphere?

Here are three practical suggestions.

1. Make emotional R&R mandatory for the HR team.
Budget part of the day, part of the week, and part of the month for them to recover from toxic emotions and to restore their sense of what is “good and true, better and possible”. Allow frequent “walks in the woods”.

2. Increase your budget for strategic thinking (not tactical response) and engage the organization in thinking through positive futures for all its staff.
After all, a firm that is healthy and thriving should be able to imagine positive futures for all the skill sets used in their industry.

3. Increase your budget for calming down line managers.
Stress causes defensiveness. We try to control what we have and imagination flies out the window. Stressed managers will quickly create a downward spiral.

And because supporting stressed people is extremely hard work, look after yourself.

Why I am positive
The positive news is that people are generally active and focused rather than passive and reactive. People are less interested in abstract concepts like “recession” and much more interested in “what they are going to do”.

For young people, recession is not a bad memory. They weren’t here during the last one. A minor economic downturn is simply an adventure: something to be explored, something to be understood, something to be conquered and something to be enjoyed in the company of fellow travelers.

My call to action
My call to action: Add an explicit positive agenda to your HR now.

1. Give your staff resources to recover from negativity.
2. Up the time spent on strategic HR and don’t stop until you have a positive vision for everyone in the company.
3. Work with senior managers. When they are glum, they make everyone else glum, who then make them even more moody!
And make sure you have your quote of “walks in the woods”, positive mentors, simple pleasures and good home life.

Are you looking for a mentor or are you available to mentor an HR Manager trying to implement positive HR?


Ref: http://flowingmotion.wordpress.com/2008/07/24/3-steps-to-positive-hr-with-a-recession-looming/

Global Economic Recession, Lay-off’s and its Impact on You – Survival of the Fittest

Global Economic Recession, Lay-off’s and its Impact on You – Survival of the Fittest

Introduction

Most of the countries all over the world are going through this phase of economic recession. Many old and big companies have already been brought down on their knees to bite the dust. Many companies as well as countries have become bankrupt or are on the verge of it. Millions and millions of people have lost their jobs. Many people have lost millions and billions of dollars. People in general are scared and fearsome. This is not the first time that the global economy is going through recession and this is also not the last time. There is a pattern involved in it. On an average it is happening after every 8-10 years. This article is an attempt to highlight some of the issues involved and some of the possible solutions.

Dynamics Involved

In our life, there is a special place for money (be it in any currency). Most of the problems that we are facing in our life and day-to-day living are linked with it. Food, shelter, clothes, life-style, education, comforts and etc and etc, each and everything involves money. Money should be revolving; it comes, it goes and it comes back again. It should always change hands or else it is useless. It is this nature of the money that drives the economy of a country, a company or our life. And when you are going through recession, it means no money is coming in. Money is not coming in but yet you need to live and hence there is a need for cost-cutting. But you never know how long the recession will continue and hence more cost cutting. People drive the economy and when there is recession then it is these very people who suffer.

…and then you are laid off. Now what? What will you do? How will you survive? How will you take care of yourself and your family? Earlier there was less money coming in and now there is no money coming in, what will you do?

In such times of global recession when everyone is trying hard to survive and pass through one of the toughest phase of their life, no one thinks about making the profit out of adversity. Everyone is trying to survive and it will be survival of the fittest. Anyone who will be able to pass through this will come out as a stronger entity or person or country. Companies are no exception to this rule. They are also trying hard to survive. With them they are also trying to float and swim through as many people as possible but certainly not all. As a part of cost cutting, some of the employees need to be laid off so that the company and others can survive. Similar things happens in a lift, when it is overloaded; ship, when it is sinking and even airplane, when it is overloaded and etc. Something or someone needs to go out for the rest of them to survive.

But, what is the pattern? Who needs to be laid-off? When? How? There are many such questions that need to be addressed. Let’s move further and discuss.

The Pattern

There is a set process that needs to be followed at the time of laying-off. I am not sure how many companies actually follow it. Let me elaborate.

1) Freezing the recruitment. No new hiring.
2) Fresh graduates or those who are new to the market will find it difficult to get a job. More so, if they are not from A-grade institutes.
3) Last in, First Out. Among the employees who are already inside the company and are employed, the person who has joined recently will be the first one to go out. To be more precise, all those who are on their probation will be shown the door.
4) Average performers or difficult employee will also be shown the door. Performance records of last three years will be re-examined and reanalyzed and those with average or below average performance will be shown the door.
5) Outsourcing to increase. Most of the routine functions will be outsourced and those departments will be closed.

What more to expect?

1) Training and Development programs to freeze. No more expenditures on company sponsored training and development programs.
2) Perks, benefits and retention allowances to be withdrawn. The company will freeze all perks and benefits that has been extended to its senior employees.
3) Bonuses and incentives to be stopped. For the time being the companies will stop all the bonuses and incentives that are due to its employees.
4) Specialists are out and generalists are in. At the time when economy was booming, companies might have hired different people for different role within a function / department or most likely they have hired more than one person for a role, all these arrangements will go away and only those people who are willing to do the work of more than one person or those who can do multiple roles will stay in.

This is the basic process that is followed in many companies at the time of such economic crisis. What does it means to the people in general and what they should be doing? There is something to be learned from every crisis and this one is no different. Let’s discuss further.

Learning’s

It is not important to know what is happening across the world but it is important to know what is happening in your company. It is also important to keep an eye on the market situation and keep yourself updated with the latest. If you are the one who has been laid-off, then you must be the one falling in any of the above mentioned scenarios. I think you also need to take the blame of your current situation. However, there is no need to get panic. Hold your emotions and look around.

If you are the one who has been laid-off then you must do the following:

1) Time with family. Remember when you were working and working for 12-15 hours a day, how difficult it was for you to find some time for your family. Now is your time to be with your family. Spend some time with them. Strengthen your bond with them.

2) Improve your skills and personality. No one is perfect and there is a scope for improvement in everyone of us. Use this time to work on your areas of improvement and weaknesses. Sharpen your skills.

3) Work on your professional and personal network. Networking is very important for the growth of an individual. Use this time to build and strengthen your professional and personal network, so that whenever the market situation improves, you get the benefit of it.

4) Heading back to schools, colleges and institutes. This is also a good time for you to share your knowledge and experiences with new generation and to pass on your intellectual legacy to them. Get associated with some colleges and institutes to do so. There is a possibility that you might get paid for it, which in turn might give you the required financial support.

These are some of the ways you can spend your time during this phase.

Good time and bad time will always be there but when we pass through the good phase of our life we forget to prepare for the bad time. We get carried away. We do not plan for our future and difficult times lying ahead and crisis and adversities are part and parcel of our life that we cannot run-away from. Recession of one such crisis and we need to prepare our selves for all such adversities. We can do it in a following way:

1) Save generously and invest wisely. In such crisis, nothing but only your savings in the bank can save you. More the savings that you might have lesser will be your pain.
It is also important for you to invest wisely. The higher the risk the higher will be the gain and more higher will be the loss. Hence, one needs to think about it.

2) Both husband and wife should be working. In some conservative families, even in this 21st century, only males are allowed to work. But I think if both husband and wife works that also lessens the pain. If one person looses the job, the other will have and hence the money will still come in.

3) Keep updating your existing skills all the time and acquiring new skills. Don’t take anything for guaranteed. Learn and relearn. Keep the sword of your skills sharpen, all the time. Learn new things and that can help in your professional growth.

4) Have a hobby that can also be transformed into a profession. We all should have some hobbies. To do things in our spare time that we are passionate about. Painting, dancing, music, writing, acting and etc are some hobbies that can also be transformed as a profession, if required.

Now, these are few things that might help you to overcome any type of economic recession or crisis in your life.

Conclusion

I hope that the points discussed in this article will be of some use to the readers. We are in a situation where no one can actually help and there is no point in blaming the God or the circumstances for our situation. You cannot also blame the Government of your country or the company you was working for this situation. It is just a tough time and the fittest will survive, others will get washed away with the time.

Ref: http://sanjeevhimachali.blogspot.com/