The 2004 Recruitment Boom: An Interview with Dr. John Sullivan

As an author and corporate advisor, I receive several hundred questions a week from firms looking for advice, direction, and assistance on recruiting issues. Recently, I was contacted by a firm who posed the following questions after reading article I had previously written on preparing for the second installment of the War for Talent. They were interested in sharing these responses with their senior and line management If you are looking for a way to strike up a dialogue about transforming your staffing function into a world-class one, you might consider the following topics as a good starting point.

Why do you think recruitment will boom in 2004? There are several factors that indicate an upturn in corporate hiring is near. The first, and the one most referenced by economists, is an upturn in key economic indicators such as corporate sales/profits, production and inventory turnover, and money stock and debt measures. Movements in these economic indicators serve as precursor warnings that economic growth is afoot. But the indicator I place the most faith in is one that is quite subjective and much less scientific: what actions leading corporations are currently taking?

Knowledge of these current actions is the key “insider” indicator. At this moment, many leading U.S. corporations are retooling their recruiting departments. They are evaluating current leadership, trading up talent, and replacing key players in roles that were eliminated during slower times. Once the recruiting departments of these major firms finish rebuilding their recruitment engines, it is only a matter of time until they are fired up and put to use rebuilding the talent base of the organization in other growing areas. The capital required to rebuild the recruiting engines would have never been made available if financial stewards inside the corporation were not predicting growth that would require headcount expansion.

In which sectors in particular will recruitment boom? Many industries grow in cyclical spurts – high technology and pharmaceuticals are good examples. However, changing workforce demographics around the globe will force the historical cycles that have driven healthcare-related industries to get shorter and shorter. I predict that in the coming year we will see moderate hiring and expansion in consumer technology, biomedical, corporate and personal security, telecom, and defense. I look for the most aggressive growth in developing regions such as China and India. Recruiting follows corporate and consumer spending.

Why are employees now less loyal? In short, employees are less loyal because companies have been less loyal to them. During the late ’90s, many employees became more comfortable with changing jobs more frequently. This practice was seen as one of the few options available to increase their compensation, garner promotions, and in general advance their career more quickly than they could internally. By allowing avenues for advancement outside the corporation to succeed internal avenues, corporations literally pushed their employees out the door.

In addition, many employees learned through the latest round of layoffs that, no matter how mission critical they were to a product or service, they are always considered expendable in the eyes of corporate finance. Layoffs have become so common that companies are no longer reluctant to perform them out of fear of harming their image. I could also add that the Internet makes it quite easy to look for and apply for jobs, anytime and anywhere. Now that relevant jobs can be automatically emailed to any individual, top performers can be teased literally every day with new opportunities.

What type of employee will be looking for a new job? Anyone who can! Top performers and above average professionals have been stuck in their jobs for the last few years due to the economy. Once openings begin to occur, current studies suggest that between 20 and 40 percent of the current labor force will begin looking. Most managers are unaware of this “tidal wave” of turnover that has been predicted. If they don’t act quickly, they won’t be able to avoid being impacted by it.

Why will employees be searching for new jobs? Because they learned in the late ’90s that they can advance their career much faster by leveraging growth opportunities outside their current employer. They also learned that they can leverage the talent shortage to their economic benefit by increasing the frequency of changing jobs.

What things will they be looking for in a new job? Most will just be seeking some kind of change because they have been stuck in the same job for the last three to four years. In a rapidly changing world, employees are no different than customers; they have grown to desire and expect change. They will once again gravitate towards fast-growing industries, because top talent always does.

How can companies stop their employees looking for other jobs? Companies can’t legally or physically stop anyone from looking, but they can act now to make the value proposition of staying with them better than what competing firms can provide. Many firms approach this from the angle of implementing financial punishments for leaving, but unfortunately punishments can be made easily irrelevant by financial rewards offered for accepting a new job elsewhere. Instead, managers need to identify what motivates and frustrates individuals, and then “re-recruit” them with jobs that increase the motivation factors and decrease the frustration factors. The key is to make the best opportunity come from inside the corporation as opposed to outside of it. Instead of ignoring workers, managers need to pay attention to them.

What problems will this new “disloyalty” throw up for companies? Managers will have to pay more attention to key employees, and once again manage. Many managers have become nothing more than glorified workers who spend just a small percentage of their time doing administrative management. Managers will have to become experts in identifying signs of unhappiness, in motivating employees, and in eliminating things that frustrate employees.

What problems will it throw up for search/recruitment firms? War for Talent II will be much different than the last one. There will be a shortage of recruiters. External recruiting firms will need to revise their business plans and recruiting strategies. Smart recruiting firms will also act as advisors to management so that they don’t make the same mistakes that occurred during the last boom over hiring and subsequently having to do lay offs. Unfortunately, HR has learned very little from the boom of the late ’90s and the bust of the early 21st-century. Workforce planning is the key to preventing this boom-and-bust cycle.

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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