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The Fordyce Letter

Straight Talk for the Recruiting Profession


Articles tagged 'recession'

Business, Relationships

Our Clients Not Only Made Lemonade, They Served Jambalaya



Mark Tyler, President of OEM Fabricators in Woodville, WI

Lemonade was the theme of our last Fordyce Letter article (Lemonade, Anyone? From the January 2011 issue). We were happy to share the three main strategies we implemented when a down economy really forced our hand, driving a change from a salesperson-driven culture to one more affordable and still focused on new business development, but sans salesperson. To recap, our three “Lemonade” initiatives were:

  1. No more salespeople. Our traditional staffing coordinators are now relationship experts — not only with applicants and contract employees, but also with prospects and customers. Their relationships, and strategic business development goals, drive new business development.
  2. A bigger, friendlier brand presence with customers. We continue to be the “little staffing company that helped.” We don’t want the lack of dedicated salespeople to create a vacuum, so we continue to stay very active in personal relationships, educational marketing initiatives, and social media, to stay top-of-mind in a truly helpful way.
  3. A more engaged, relationship-oriented presence continues to be our recruiting strength as well as a sales strategy. Since the Lemonade article in January, we have continued to avoid paid recruiting advertising and stayed focused on the more personal touch — including all forms social media, referral programs, job fairs, and other old-fashioned recruiting methods. We even resurrected the “Now Hiring” job flyers — they work in our market!

As we continue to make “lemonade” and improve and strengthen our relationship-based, social media-driven methodologies, we were delighted when one of our longtime clients asked us to bring those tools to the table when they threw a huge party — in honor of BURYING the recession. Here is a “When the economy throws you a curve ball, make Jambalaya” story that I hope makes you smile. Thanks to our client, OEM Fabricators in Wisconsin, for allowing us to be a part of this event and share the story.

Industry News

Surprising Economic Reports Help Lift U.S. Stocks



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With the world’s investors worrying about Japan’s nuclear problems and rebellions of all sorts in the Mideast, the U.S. enjoyed a little good news this week.

Initial unemployment filings dropped more than economists expected, while the Federal Reserve’s Philadelphia branch reported that manufacturing orders in its region were soaring.

The news helped lift the Dow to a nearly 150-point gain by late afternoon Thursday.

Business

Recruiting, Redemption, and American Economic Viability



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“We would like to live as we once did but history will not permit it.” –John F Kennedy

I was instantly impressed by the tone. By the anger and edgy urban feel. The tag line gave me shivers as the Super Bowl’s “Imported From Detroit” spot knocked me out — an up front, in your face blast from the Motor City. The message? Absolutely gorgeous and ice cold simple. We Are Back. Yes indeed! I too love the smell of napalm in the morning.

Being a boy who loves cars, I have always been a fan of Detroit and made reference to it very specifically in Employment Rage. Case in point: Quoting from a special report in Time magazine, October 5, 2009: “By any quantifiable standard, the city is on life support. Detroit’s treasury is $300 million short of the funds needed to provide the barest municipal services … The murder rate is soaring, and 7 out of 10 remain unsolved …the unemployment rate is 28.9 percent. That’s worth spelling out: twenty-eight point nine percent.” Clearly, as goes the car industry, so goes Detroit.

We have lived through a grisly two years. The causalities have been monumental and the casualties have been deep. Homes, careers, dreams, and marriages — gone. Enough. Enough of what has been because the past is a bucket of ashes.

The time has come to focus on what will be. To find a new sense of pride and a new sense of purpose and a new sense of hope for all we can do to create a vibrant and durable American economy.

Business, Contract Staffing, Industry News

Employees Are A Pain – Or Are They?



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On CIO, an article was recently run called The Semiotic Diet: The future of work in the U.S. In this article, author Bob Lewis discusses the differences in hiring contractors vs. employees as the U.S. pulls itself out of the recession, and bluntly provides his thoughts on how companies view employees:

Most U.S. companies consider employees to be a colossal pain in the tush, and the bigger the company, the more that’s likely to be the case.

Editor's Corner, Industry News, The Business of Recruiting

The New Temporary/Contract Workforce



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Last week, CNN Money reported that according to the Labor Department, “jobs in the temporary services industry are up 22.1% year-over-year…But the overall job market expanded only 0.2% during the same period.” There is a shift in the direction of employment, and it seems to be in the direction of a heavily contract, temporary, and consultant workforce.

Temporary hiring has traditionally been an economic indicator, as CNN Money reports that it is the first to be put on hold leading into a recession and the first to come back in times of recovery. But this time, things seems different.

RPO

RPO 2010 – Part 2: An Inflection Point…What’s Next?



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Part 1 of this article ended with the following position;

“So I think that 2011 will look a lot like 1999, when RPO firms were called “project recruitment” or “staff augmentation” firms. We seem have come full circle. In the end, is this a good thing or a bad thing? Stay tuned for part 2 of this series….”

Into 2011 – RPO

The above stated, I would offer that we will in fact look more like 1999, but I think that is a very good thing, and here are some reasons why on both (the 1999 and the good):

Entrepreneurship, The Business of Recruiting

The Ups and Downs of Recruiting Entrepreneurism – Part 1: Critical Choices



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As recruiters, we are entrepreneurs. Even for those of us who are employees, we are still entrepreneurs. Since our industry is incentivized, we get paid on what we produce: close more deals, make more money. This is what entrepreneurs do. And as self motivated people, we have a huge tendency to always be optimistic as to where and when the next deal is coming from. The ‘what if’s, ‘maybe’s, ‘should have’s, ‘could have’s, and being so close to the deal are the bane of every good entrepreneur’s existence. Even if you disagree that you are this way, I openly admit that I am. Even my wife has been programmed to ask me about the activity level of my staff and myself every few days. And, of course, I am always optimistic. Aren’t most of you?

This, however, is where the problem begins because being an eternal optimist has a way of playing with your head and emotions and ultimately gets in the way of making smart and sound judgments about your business. It certainly has for me, especially since the middle of 2008.This is where the paradox, or dilemma, begins and actually ends for me.

The Business of Recruiting

How Will You Emerge…This Time?



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Most senior level executive recruiters have now experienced more than one market downturn. In order to make it through these lean times many recruiting businesses are forced to adjust their business model in order to survive. These adjustments include terminating staff, adjusting prices, and creating new services. However, when the markets rebound many recruiters rebuild their older, traditional model.

So how will you emerge when the market rebounds?

The Tradition

From the client’s perspective, the senior level executive recruiting model hasn’t changed much over the past four decades. Fees remain about the same, roughly one-third of the hire’s first-year total cash compensation. Average time-to-completion remains around 120 days. And perhaps most telling is that the average successful completion rate remains just under 70% at most big-brand firms.

Even as technology developments have opened access and streamlined the ability to identify and track targets, the internal execution model at most firms remains exactly the same as it was decades ago: Rainmaker recruiters generate business and serve in the lead role on many search projects while a support staff consisting of junior recruiters, researchers, and assistants serve in key execution roles.

During peak conditions in the market, rainmakers may manage as many as ten active search projects, and the firms create a bulging support team to serve them. In these good times individual search profit margins can easily reach 65%, and for small firms it sometimes gets as high as 85%.

Recruiter, Meet Adversity

So, what happens when the market drops? Firm operators know people costs far outweigh the other expenses, so the focus is initially on staff reduction. At most firms the support ranks are the first to get thinned.  After all, these individuals cost the firm money while the rainmakers make money for the firm. After the support staff is reduced to bare bones, firms move on to remove unprofitable recruiters. With empty offices and empty desks, firms usually limp along until the market rebounds. During this period you’ll hear all kinds of rumors and stories about desperation among recruiters, including super-low fees, lower-level search work, research-for-hire, and even freebies. (In desperation, imagine what one would say or do when the quicksand is up to their neck.)

RPO

RPO 2010 – Part 1: An Inflection Point…What’s Next?



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RPO (Recruitment Process Outsourcing). Seems fairly easy to make an educated guess as to what this really means, but think again.

I myself own an “RPO” firm (or so I thought). I have attended several national and international RPO professional symposiums over the last five years. Typically these gatherings include RPO firm executives, as well as industry gurus, and more times than not, one of the breakout sessions at these meetings revolves around a panel of experts discussing what their definition of RPO really is.

Interestingly enough, and coincidentally, each individual always seems to have a slightly different take on what “RPO” really means. They are a group of peers, all in leadership positions within the “RPO” business, yet their definition and perspective of what this actually means and what services should be and are delivered under this type of model vary widely.

RPO EARLY ROOTS

Contrary to the opinion of some, RPO did not just appear as a business model out of thin air over the last five years. The RPO model’s precursor really started in the early to mid 1990’s. The semantics of those days did not include the RPO vernacular, but was described as “Project Staffing”, or “Staff Augmentation”, or even “Stampede Recruiting”. Many firms were created in the “RPO” style in the 1990’s based on the need of Technology companies to grow exponentially on a “real time basis”. Technology companies at that time, and still today, often need to “reactively” hire very large numbers of people to fulfill the demand of a newly produced technology product or service (i.e. think Google or Apple). It was, and is, extremely important to get new technology products to market as quickly as possible, and to do that, you needed increasingly large numbers of developers, sales staff and marketing staff. Because of the large increase in headcount in those areas, it became vital to hire large numbers of infrastructure roles to support the larger organization (i.e. HR, Finance, Procurement, etc.)

Industry News

Wall Street Financial Hiring Getting Back On Track



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Financial services search professionals are seeing an uptick in business, as Wall Street reports a return to hiring to replenish a diminished workforce. This adds to the list of industries that are starting to climb their way out of the recession. According to a Businessweek article this morning, “[financial] firms are adding jobs for the first time in two years, rebuilding businesses cut during the financial crisis and offering guaranteed payouts to lure top bankers.” Five big Wall Street players — Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc. and Morgan Stanley — reported to have added significant head-count in the first quarter of this year. The attractiveness of these jobs is due largely to guaranteed bonuses, which are bonuses paid regardless of an employee’s or the company’s performance. This practice is being brought back as firms are returning to recruiting individuals from their competitors and not just recruiting professionals out of unemployment.

Additionally, Wall Street firms are also looking to hire more college graduates this year. Securities Industry News shares that ”75% of Wall Street firms plan to hire an increased number of college graduates in 2010″, according to a survey conducted by 7city Learning. Last month, a Training The Street survey revealed that MBA graduates are being aggressively pursued, finding that “69% of respondents [business school students at the top 25 MBA programs] received an internship and/or job offer, and 39% have received more than one offer.”

For search professionals, this is good news as entry-level as well as experienced professional needs increase while internal recruiting teams are feeling the pressure to bring on new talent with a lean workforce.

For those of you who work in the financial services industry, have you noticed an increase in your clients’ needs recently? Are these findings indicative of your workload? Share your thoughts and experiences in the comments below.