CareerXroads

CareerXroads®Update - January 2010

By Gerry Crispin, SPHR and Mark Mehler
mmc@careerxroads.com

Because January is a month devoted to predictions, prognostications and sundry crystal ball gazing activities, we have combined our Bellwether (a trends e-newsletter that normally only goes out to our CareerXroads Colloquium members) with our broader public commentary (CareerXroads Update) that is sent to all those interested in staying in touch.

In the spirit of the season, here are five predictions for you to ponder:

#1 - The One No One is Talking About: Contingent Staffing

According to this Workforce Management article by Irwin Speizer quoting a recent(?) study, "73% of responding employers are planning to increase their use of contingent labor" (we hate unnamed surveys on general principles).

Further on, the article notes the conclusion of a law firm, Littler Mendelson (we go from unnamed sources to vendors with agendas). Their research suggests that contingent labor could increase its penetration threefold - from the 13% of employees estimated (by Staffing Management Analyst, yeah someone with real data) to 39% as we come out of the recession.

Perhaps the most telling stat though is a poll of employers (with at least 2000 employees) conducted by Veritude that found: "only 3 percent planned to revert to the staffing model they used before the recession." Now this is a point to ponder.

It is also important to note that contingent labor did dip dramatically during the recession. We first noted last February, in our Source of Hire 2008 whitepaper, that contingent labor had been dramatically reduced during the recession (from 17% to 10%) among those folks who responded to our SOH Survey (If you have 5,000+ employees and want to participate in this year's SOH survey, we are accepting surv ey input now).

The Workforce Management article also took note of this dip by noting stats from the "American Staffing Association, which tracks trends among staffing companies that provide contingent and temporary workers to others. The number of people placed by staffing firms fell by a third, dropping from about 3 million in 2007 to about 1.9 million in the second quarter of 2009."

We believe this trend has been in play for a decade and won't explode anytime soon. It will grow gradually but, staffing leaders need to ask themselves whether they are even responsible for strategy, tactics, assessment and audit, policy oversight etc. for contingent labor. We think - not enough.

#2 Nobel Prize Winners Offer Evidence You Have Been Looking For: Outsourcing

Two economists, Oliver Williamson and Elinor Ostram pointed out in this article that "a special economic and legal relationship exists between employers and employees, and it can be lost when a company outsources its work" - - - and for this they won the Nobel Prize!

Once we got over being jealous and held ourselves back from offering the Nobel committee several other self-evident truths, we realized this research is really important work for running a business and staffing it. The article is a must read for every staffing leader. The pendulum has swung.

Still, there will continue to be solutions-seeking problems like this recent decision of the Australian army to outsource its efforts to woo recruits as described here in two articles:

Heaven help us if the US Army went down this road.

#3 The Candidate Experience Revolution. Let Them Eat Cake.

Ok, there won't really be a revolution in 2010 because too many candidates, even the good ones, are wussies. Still, CareerXroads will continue to beat the Candidate Experience bandwagon and push for operationally defining the experience candidates should have to justify your EVP claims.

This online column from Michele Goodman describing the Five Worst Trends of 2009 (could have been the last decade) is the best of what's wrong from the candidate's perspective. She lists:

We agree.

Perhaps the underground aspect of this trend is that Career Management advice is shifting radically as Social Network tools like Linkedin and Facebook mature (zoominfo even recently offered a free service to job seekers). The real value of SN is in the hands of job seekers and employees not recruiters and employers (except as recipients). The very best and brightest job seekers are learning:

Unfortunately, there are unscrupulous folks trying to help job seekers short cut their way to employment and this website offering fake references is worth noting.

#4 There Will Be More Experts in Social Media than People Populating Them

We're changing all our branding to "student" since the term "expert", "guru" "new media strategist" and "digital enthusiast" is appended to the names of 140,000,000 online profiles. At least there are plenty of people to learn from so maybe we can make a living telling you which ones can actually teach something useful. (We're only kidding a little bit.)

This article by Traci Armstrong (in AdAge of all places) making the case for Social media's value in corporations is well done. She details these six reasons for getting your company to get with it and unblock social networks:

Our own CXR survey in November showed that 50% of firms still believe they are preventing their employees from accessing Facebook, etc. Yeah, sure they are.

#5 Staffing Leaders Will Increasingly Reside Outside The US

This last trend is also a bit tongue-in-cheek but the importance of global knowledge about staffing is fast becoming a critical competency for future staffing and HR leaders. Get on the bandwagon early if you plan on a long career in staffing.

Gerry blogged during his recent trip to India and he started by asking "what would you ask if you were me?" Here are some observations in response to those questions raised by Kristen Weirick (Cargill), Tarek Dawes (Deloitte), Judith Panagakos (JP Morgan), Kim Warne (GE), Bob Markey (Aramark), Michael Lowe (Comcast) and many others. Thanks for your interest although this subject warrants another decade of study.

What should US corporations in India do to attract more student applications?

Companies competing on US campuses typically conduct onsite interviews, develop internship, summer and co-op programs, sponsor courses with visiting lecturers, fund scholarships, clubs and special projects with professors, etc. I've no reason to believe that these and many more tactics are any less effective.

There are however, a few issues that came up repeatedly in discussions with students, professors and deans at the three Universities our delegation met with that caused me to rethink how the competition on campus for talent might shift in the future.

  1. Community Social Responsibility and Sustainability issues are far more embedded and far more complex in India than in the US. While students are not at all likely to choose a firm (or turn down an offer) because of the firm's stance and level of commitment on these issues, it does impact:

    a. employee engagement levels (and therefore performance - India has levels of employee engagement most US firms can only dream about),

    b. status attributed to the firm as a place to work i.e. EVP and,

    c. the firm's relationship with the state and national political structure in the country. All businesses are expected to proactively attack one or more of the country's challenges at levels appropriate to their presence in the country.

    And as a country, India may be the world's "canary in the mine" as the challenges to improve infrastructure (shelter, electric, water, roads), educate the broader populace and manage pollution are on a scale that is extraordinary. Even small wins managed by US firms will add significantly to their attractiveness. One business leader painted a picture of the number of freshly displaced rural Indians now moving to their overtaxed cities during the next ten years as equal to all the people currently living in North America!

    Leadership of HR, Business and Staffing needs to be deeply embedded in deciding which of the many projects they might undertake will have the most synergy for their business especially in how they leverage their talent. This is not a trivial exercise and staffing should be heavily involved.


  2. Education in India has very different roots, goals and gaps than in the US.

    Here we increasingly complain how students are unprepared to work in our businesses and industries. The problem is exacerbated in India to a lesser degree because of a lack of access to content and resources. More important are larger differences in quality of the lesser known institutions themselves and the fact that the students have had few business role models (because until 1991, there were almost no alternatives except to leave for countries like the US.)

    Despite the above and the fact that fewer than 25% of India's women are educated and that hundreds of millions have no access to any education at all, there is still an incredible number of highly educated secondary equivalent students competing for the "best" colleges though specialized tests.

    IIT Bombay is an example of one of India's top engineering and science collages where we were offered both admissions and student placement statistics. Their data suggested that their admissions criteria was far more stringent (and perhaps more fair) than our most elite universities. As many as 250,000 students each year apply for admission via testing and fewer than 4000 are accepted in some of the core engineering programs.

    The Dean of the University noted in our meeting that he was only just now (2009) getting around to studying where his alumni are working (IIT Bombay has been around since just after India's Independence in 1947). He discovered (not to his surprise) that alumni live all over the world and are working in 70% of the Fortune 500 firms.

    There is no question, as several folks have asked, that the college you graduated from is much more important than many other variables (and it ain't because of the sports program). There is also a cache to having worked outside India for a time and then returned home. Several firms discussed their initiatives in sourcing expats living although their success was modest. It then occurred to me that the Indian Universities had limited "Alumni" Association programs because they don't depend on donations (the government subsidizes most colleges).

    The IIT Bombay Dean (who was responsible for student placement) had not (yet) examined whether Linkedin or other social media might be leveraged to help students find openings. However, since every student we met has a profile on Linkedin and Facebook (e.g. I have 1600 1st 2nd or 3rd degree connections to IIT Bombay Alumni on Linkedin) it is a two way street.

    The demographics of most US firm's employees will include immigrants new and old from India and many will have degrees from top colleges in India as well as US colleges. Mine your own database. These employees can form the basis for a specialized referral program that crosses national boundaries. In addition, almost every top college in India has a US or European sister college (IIT is affiliated with MIT for example and 2 other schools in the West). Map and explore these relationships (especially if your firm has strong ties to the US counterparts) few firms are doing this based on several calls we recently made.

    As noted in this BusinessWeek article, it might also be critical to aggressively pursue H1-B and J-1 visas for the most talented candidates that you want to retain by offering development in the US and then potentially returning to India.


  3. Cultural implications cannot be ignored when attempting to attract students. Some that were more obvious even for me:

    a. Class of job: Contract or part-time positions have much lower status and are not going to be attractive for the best and brightest. Publish what percentage of "temp-to-perm" if you must. What percentage of those you hired were interns?

    b. Gender & Caste: IMHO, India is where we were in the 60s (not really but that is as close an analogy as I can manage). Some movement but lots more is coming and, since the basic problem is access to the education that allows the affected class to qualify to even interview with you, you won't see the problem - unless you choose to address it via your social responsibility initiatives.

    c. Family involvement: The kids I spoke to claimed their parents were much less involved in deciding where they worked and then stated that "we make our own decisions - - unless our parents oppose our choice." Hmmm.

    Clearly families influence decisions differently than they might in the US. But, since so much change has taken place in the last two decades, it is the family members with experience outside India that are more likely to be sought out for their input. Location is an issue but more often it is because of the commute rather than where the family is located. Travel within India is relatively low in cost. US firms paying better wages are a plus to any family decision.

    I do believe the concerns differ by gender. However, women who have gotten access to education and are now capable of being hired by western firms have already rebelled against traditional mores and should not be assumed to be that much different from their male counterparts. Unfortunately, once the family unit has children, the likelihood of the female continuing her career is less than the US at the present time.

    d. Workforce readiness: Students working on their masters degrees have almost always worked for 2-5 years in a top firm. Students getting out with a Bachelors (but no internships) are not as prepared to deal with all the niceties of a work environment. Understanding exactly what you need to do to onboard new employees was the subject of several conversations. Not a trivial subject.

    4. What technology tools do companies recruiting in India use in their staffing process?

    Same as us. ATS, CRM, referrals, etc. The problem is the lag time. Staffs are generally not as large nor as broadly trained in their efforts to acquire talent. At one customer center where all employees (thousands) were college graduates, well-versed in English and, in many cases also had business, financial or IT expertise, nearly 50% were hired via 3rd party, 14% through employee referral and 25% job boards.

    Another Indian recruiting leader (working for a Colloquium member firm) advised that his team employed extensive sourcing techniques in their efforts to hire top technology grads with experience but still relied on 3rd party for 25% of their hires. Another 25% came from job boards and 25% from employee referrals.

    Anecdotally, newspapers appear limited as classifieds and billboards are surprisingly common and well-maintained but tend, when used for employment, to focus on health care opportunities. Personal computers were evident in all the universities and adoption of smart phones was also visible but we didn't see professionals as obsessed with their online "friends" as their US counterparts. I would be interested in seeing data about % completion of profiles and time spent updating Facebook status, etc. I suspect it would be much different.

    How are the talent acquisition functions aligned in Indian companies?

    I'm sure it is all over the map, as it is everywhere, but for the most part it appears to be more centralized under HR which is well-established and at the trench level it seems to be line of business, location or function, whichever dominates.

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    CareerXroads
    The Staffing Strategy Connection
    By Gerry Crispin and Mark Mehler
    mmc@careerxroads.com     - 732-821-6652