Sunday, December 02, 2012

The Unemployment Conundrum:

How Can Business Benefit?
 
High unemployment has been with us for four years and economists say it will be with us into 2013.  The MainStream Management Monthly Newsletter #21 states “The employment outlook for 2013 offers little cause for New Year’s Eve celebration. Champagne bottles will have more fizz than the U.S. economy in the near term, and the same unemployment headaches we cited sixteen months ago will persist.”
 
The government appears to settle on the same solutions while expecting different results.  Since we are expecting more of the same policies, will business react differently in order to grow their flat revenues? 
 
Which businesses will benefit from the new “normal” workforce?  How will they change their way of doing business in order to grow their revenues? 
 
Many business leaders point to the economy and say, “Look at the state of the economy!  No wonder our revenues are flat.”  Therefore they are demonstrating they are willing to continue to conduct business the same way while expecting different results or at least accepting their current condition.
 
The workforce is dynamic; and wise companies adopt new methods when the workforce economy changes.  How may companies benefit from the current conditions?
 
The official unemployment rate is table U3 in the Bureau of Labor Statistics, Household Data, Table A.15 Alternative Measures of Labor Underutilization (http://www.bls.gov/news.release/empsit.t15.htm) .  In October 2012, the official unemployment rate was 7.9%.  Table U3 only measures individuals receiving unemployment benefits.  People who have dropped off of unemployment benefits are no longer counted in Table U3.  Then they fall into table U6 where they are counted as unemployed or underutilized as a result of the economy.  In October 2012, that number was 14.6% of the available workforce.  Table U6 translates roughly to 23 million workers either unemployed or under employed as a result of the economy.
 
Of those 23 million workers, how many are spending money and contributing to our economy?  Not many.  How do we improve the economy?  Hire these people one at a time on a full time or temporary basis.  Even large hiring efforts only hire one person at a time.  The time between hires and the methods of sourcing are different.
 
For the sake of discussion, it is well documented that generally companies do not track their high performers well.  Of the 23 million unemployed or under employed workers how many are Top Performers?  My guess is there are only about 10% of those people who are Top Performers.  In our current economy roughly 2.3 million unemployed/under employed workers are Top Performers, otherwise known as “A” Players.  Of course that number causes people to further wonder about the wisdom of only hiring people who have jobs, especially when you consider that 90% of employed workers are not considered Top Performers.
 
Why would a company in need of new revenues want to attract a Top Performer now?  That person may be the person that discovers the answer to revenue woes and change the business immediately while cutting costs and adding profitable new revenues.  As a result of their unemployment, they generally are willing to accept less compensation than if they were employed full time.  Now companies may attract the smart, ingenious, seasoned performers with initiative at a time when they can afford them.  With the additional profitable revenues, the company comes out ahead financially.
 
How can companies with flat revenues attract these Top Performers?  It depends on the business strategy. 
 
If the business only wants to hire full time employees, they need a recruiting process that facilitates the attraction of “A” Players.  Sometimes those individuals are driven away from companies that do not understand that successful recruitment is a sales process.
 
 
Of course some companies’ revenues are so low now that as much as they would like to hire someone new it would be unwise for all parties.  These companies may want to consider hiring a pre-screened interim executive from an established management consulting firm.
 
These interim executives have proven talent growing revenues in companies where revenue growth is stagnant.  Top Performers give a fresh look at all aspects of a company – products, services, pricing, profitability, talent, manufacturing, logistics, vendors, and customers without shades with sacred cows looking in to protect their turf. 
 
The unemployment conundrum may benefit companies with the need for more aggressive profitable revenue growth during a time when the best talent is readily available and affordable.