I received a press release from IBISWorld with some interesting data about where the employment growth will occur over the next 4-5 years.  Of course, I would be a bit skeptical about number 2 considering the recent announcements from the White House concerning the banking industry.  Nonetheless, still an interesting picture:

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You don’t have to look far to find disconcerting news about the present economy.  This AP story from one of our local papers lays out numbers that paint a vivid picture (emphasis mine):

There were nearly 6.4 unemployed workers, on average, for each available job at the end of November, according to Labor Department data released Tuesday. That’s up from 6.1 in October, and a record high.

There were 1.7 jobless people for each opening in December 2007, when the recession began.

Job openings fell sharply to 2.42 million in November from 2.57 million in October, according to the department’s Job Openings and Labor Turnover Survey.

That may sound like a lot, given the depths of the recession, but it’s the lowest number of job openings since July and the second-lowest since the department began tracking the data in 2000. It’s also about half the peak level of 4.8 million, reached in June 2007.

It will turn as our economy is almost constantly in a state of expanding or contracting.  The real issue on the horizon is retention as I have written about in the past.  Hiring is the key.  There are many salespeople today who are “corporate cocooning” until hiring picks up again.

Earlier this week I spoke to just such a salesperson.  He is stuck in a development position where the company is eager to talk about supportive changes but reticent to act on them.  He is simply performing in the role as best as he can with the internal company factors working against him.  He basically said he is ready to leave once there are signs of expansion in the economy.

There is probably a ratio in the above quoted article that flips the exit light on for salespeople.  I won’t hazard a guess, but I suspect it won’t have to get back down to 1.7 jobless people for each opening to open the floodgates to job jumping.

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This story from abcnews.com carries some weight in terms of a real economic forecast.  It isn’t good:

More of America’s largest companies will shrink their staffs than will hire in the next six months, according to the latest survey of their CEOs.

Nineteen percent of the CEOs expect to expand their work forces, while 31 percent predict a decrease in the next six months, according to a quarterly survey from the Business Roundtable released Tuesday. That’s slightly better than the 13 percent who expected increased hiring three months earlier. At that time, 40 percent forecast cuts.

Granted, the trend is good, but the actualities are not.  2010 is shaping up to be a lackluster hiring climate.  We work with CEO’s in some of our customer organizations and we are hearing similar reports.  The general consensus is to sit tight until there is some discernable signs of a recovery.  A healthcare overhaul, cap and trade and tax increases are not helping stimulate the economy (emphasis mine):

A new question on the Roundtable survey asked CEOs to identify their greatest cost pressures. The largest group — about one-third — cited health care.

One other note is the 2010 revenue forecast.  I don’t know if I have ever seen a more difficult task for our customers.  The uncertainty is astonishingly high.  One thing it does point back to – you better have strong qualifying salespeople on your team in this climate.  If not, your forecast will be replete with deals welded to the 90-day close…that never close.

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How about this quote from Stephen King’s Danse Macabre (h/t JustSell.com):

… talent is a dreadfully cheap commodity, cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work and study; a constant process of honing. Talent is a dull knife that will cut nothing unless it is wielded with great force — a force so great that the knife is not really cutting at all but bludgeoning and breaking… Discipline and constant work are the whetstones upon which the dull knife of talent is honed until it becomes sharp enough, hopefully, to cut through even the toughest meat and gristle.

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Jobless recoveries is an all-too-frequent phrase in our modern economy.  The 3.5% growth in 3rd quarter GDP is a bit misleading as the government poured money into the economy (cash for clunkers, first-time home buyer program, etc.).  The hiring trend continues to be abysmal as somewhat expected as it is a lagging indicator.

But is it becoming more of a lagging indicator?  This article from Commentary Magazine makes an observation I haven’t heard elsewhere (emphasis mine):

The underlying reason for increasingly jobless recoveries in recent decades can be found in Chart 5 of the New York Fed’s report. In the early 1980s, 51 percent of industries were undergoing structural change as opposed to merely cyclical change. By the 1990s, that percentage was 57. In 2003, it was fully 79 percent. It is undoubtedly even more now, six years later. The fact of the matter is that the microprocessor is remaking the economy from top to bottom—just as the steam engine did two centuries earlier—but it is doing so much faster. One result of this profound economic revolution is that productivity—the amount of output per unit of input—is rising quickly, and the largest input in most industries is labor. Thus the need to hire new workers as the economy begins to grow again is less and less urgent. It increasingly makes a lot more business sense to invest in new, highly productive equipment instead.

The author makes a good point regarding ever increasing productivity requirements.  My impromptu analysis of my business circle supports these requirements.  Many people talk of doing 2 –3 different jobs for their company…and the company expects this effort.  Clearly the present job market supports companies requiring this of their employees – jobs are scarce.

The ability to leverage technology to greatly increase productivity is an ominous development in the effort to recover from this deep recession.

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I have heard many cheerleader reports attempting to claim the recession is over and the recovery has begun.  I’m not so certain especially when these people note the stock market as the leading indicator.  This article from CNNMoney.com explains why this cheerleader approach is flawed (my bold):

Several experts point out than many of the relatively strong earnings reports helping to lift the markets in recent days are being driven by cost cuts, rather than strong revenue growth that would be a better indicator of consumers and businesses being willing to spend again. If businesses keep cutting costs to make the numbers that Wall Street wants to see, that can only put more downward pressure on jobs and wages, and result in weaker economic growth or another downturn.

“The companies are cutting fat, and in many cases cutting bone and muscle. There’s no organic economic growth there,” said Yamarone.

And then there is this crucial fact of which I was unaware:

Another reason that comparisons to Dow levels of a year ago are risky is that two of the more troubled components — General Motors and Citigroup (C, Fortune 500) — were dropped and replaced by stronger companies such as Cisco Systems (CSCO, Fortune 500) and Travelers Cos. (TRV, Fortune 500) in June.

The recover, when it starts, will take far longer to bring us back to our past levels.  My question is this, how many Baby Boomers are going to simply leave the workforce after this extended recession?  The rehiring that is sure to occur may accelerate due to the certain lack of candidates.  I am hopeful that we see a sling shot of hiring once the corporate world is certain the recover has legs.

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From a CNNMoney.com article this morning (emphasis mine):

Private sector employment fell more than expected in September, but the pace of job losses continued to slow, according to a report released Wednesday.

Automatic Data Processing, a payroll-processing firm, said private-sector employers cut 254,000 jobs in September, down from a revised 277,000 in August. It was the smallest monthly total since July 2008.

The decline was greater than the 200,000 loss economists surveyed by Briefing.com had forecast. But the difference was “not statistically meaningful,” according to Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC.

“Not statistically meaningful” – tell that to the 54,000 people who lost their job this month.  Safe to say 10% unemployment is only a couple months away.

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I’m back from a needed break in this sour economy.  Everywhere I go I ask people about their business.  It is fairly consistent – something from “could be better” to “really down.”

That economic context allows some freedom for hiring companies to incorporate what I call contextual hiring techniques.  These are typically techniques that take longer to measure and allow the hiring company to see the salesperson in action.

Some examples:

Job Shadowing – just as it sounds, the candidate spends time with an existing sales rep to get an understanding of the position.  Peggy McKee at Medical Sales Recruiter has a post on this topic.  A friend of mine recently did this for a sales position that provided him the opportunity to ask many questions that would be difficult to ask in a formal interview.

I am a fan of this approach especially if the job market is slow.  It can be difficult if the market is hot and candidates have many opportunities.  However, this approach is a strong qualifier for the candidate’s interest.

The one caveat here is to pick the right salesperson for the candidate to shadow.  My friend learned many topics about the hiring company from the sales rep.  The topics that the rep offered up were too much of “inside baseball” to be sharing with a good candidate.

Trial Periods – yes, every position is technically a trial for the first 90 days.  What I’m talking about involves is a 30 – 60 day trial for observing a new salesperson.  Again, I’m a fan of this approach in this type of economy.

The main topics that can be ascertained in this time period is the candidate’s fit to your culture, his or her approach to the job and his or her interaction with you the boss.  Unless you have a short sales cycle, you won’t be able to observe them through the entire sales cycle.  You will have to monitor/observe their activity and extrapolate from that data.

It is a short window, but combining pre-hire assessments with a day of job shadowing and a trial period and you will have an in-depth understanding of your newly hired salesperson.

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Hiring, that is, and it appears that it is going to be an even rougher road over the back half of 2009.  If you are in the recruiting, hiring, assessing business you are aware of this fact.  9.4% unemployment is remarkable.  From abcnews.com:

The percentage of people without jobs in this country is now at the highest point in nearly 26 years. Every month since January 2008 we have seen jobs disappear.

So far the economy has shed 6 million jobs since the recession started push (sic) employers to start handing out pink slips.

I’m still looking for the report that lists the number of jobs “saved” by the stimulus package.  I suspect I will have to wait a bit longer for that information.  But fear not, the bleeding does seem to be slowing down:

The Labor Department this morning announced that another 345,000 Americans lost their jobs last month, pushing the unemployment rate up from 8.9 percent in April. Economists had expected a loss of 550,000 jobs and the news that significantly less were lost initially shot the stock market up.

Again, more economists with an inaccurate prediction.  I dare say the economy is too dynamic, too multi-faceted for any one person to accurately predict…much like the weather.  Yet, here is a development for which I was unaware (emphasis mine):

The (EEOC) commission received an unprecedented 95,402 complaints during a 12-month period ending in October. That’s up 15 percent from the prior year. Of those, 24,582 are charges of age discrimination, a massive 29 percent increase.

I think most of us know that companies often use down markets to purge employees whether deserving or not.  A recessionary economy provides cover for companies to layoff workers from a protected class with less liability.  I’m not condoning the practice, just being brutally honest.

This uptick in complaints seems to support this unwritten business practice.  I think an aspect that the reporter did not address is the overall aging of the workforce.  If the Boomers are the majority of the workforce, there stands to reason that there will be a continued increase in age discrimination charges simply based on the numbers.  That data would have provided a needed context to the article.

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This Selling Power article title made me laugh – Are You Using a Funnel or a Sieve?  I laughed because my son is a hockey goalie so the word “sieve” carries a special horror.  That horror is compounded by the fact that we just returned from a hockey tournament in Winnipeg where I expected to hear some rowdy crowds and perhaps a sieve chant towards my son.

My fears were unfounded as the Canadians were extremely pleasant.

Hockey colloquialisms aside, this article makes many excellent points before turning into an advertisement.  This entire graph is valuable:

It’s an issue that makes sense from a cost standpoint as well. Karam says it costs about one-sixth the amount of money to nurture a lead that has fallen out of the funnel than it does to find a brand new one. Most sales managers know this but are so quarter-driven that funnel leakage tends to hold a low priority on their to-do lists. And until recently, that’s worked just fine. Prior to the recession, sales teams could “focus on the hot stuff and they’d make their numbers. Well, now there’s not enough hot stuff,” says Karam. In light of all this, he adds, “there’s been a lot of attention recently on recovering leakage and re-mining or re-farming leads.”

Finding qualified leads is an expensive process which is why I focus extensively on qualifying ability.  When you are hiring salespeople, there is no greater urgency then to discover the candidate’s qualifying ability.  It is the backbone of successful selling.

I couldn’t agree more with the statement that most sales managers are aware of “funnel leakage” due to their quarterly revenue responsibilities.  I would go further and say a percentage of the forecast error is funnel leakage and the other is blue-sky forecasting.  Many a rep has been known to submit an inflated forecast in the hope of keeping their job for another quarter.  I suspect the salesperson is simply buying time with the hope that they will close a large deal during that bonus time.  It rarely happens.

Re-farming leads is a valuable exercise for any sales department in any economy.  Again, the costs associated with new lead development are far greater than re-farming leads.  One question I often ask sales candidates is for them to provide me with an example of when they went back to close a “dead” lead.  This question provides some insight into the candidate’s tenacity, strategy and ability…and it is easy to spot a fabricated story.

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