The On-Demand Economy

More and more workers are moving away from traditional jobs and towards the “gig” economy of on-demand roles that have a finite time frame.  Some of the startling trend from the Yahoo article (emphasis mine):

The report said the number of independent workers in America is expected to grow from 30.2 million to roughly 37.9 million in 2020, in part due to businesses seeking flexibility and also because young adults are more comfortable in the lifestyle.

Adding occasional independents, the projected number of US adults working independently will grow to an estimated 54 million or nearly 45 percent of the private, non-farm workforce, the group said.

I’m not sure what this effect will have on sales positions.  Perhaps the distributor/rep model that has been prevalent in certain sales for decades will become a common structure for companies.  I find it difficult to outsource a customer relationship especially if you are in a service sale.  Perhaps the development will be salespeople who have specific relationships with large companies and provide the channel to those decision makers?  Again, this is the distribution model that has been in manufacturing for decades and it would appear this model has the potential to expand in the very near future.

Spinning The Bad Economy

The economy is in rough shape as most people know.  However, I give credit to the Business Journal for attempting to spin a good story out of this hot mess.  Here is the headline:

Challenger report: June job cuts hit 13-month low

Sounds positive and they lead off with this info:

Nationally, the country’s employers announced plans to slash 37,551 jobs in June, down 39 percent from May, which marks a 13-month low for planned cuts, according to a new report from human resources consultancy Challenger, Gray & Christmas Inc.

Ah, but the truth often lies in the later paragraphs:

Still, halfway through 2012, there have been a total of 283,091 job cuts, an increase of about 15 percent from last year’s total during the same six-month period, per Challenger Gray & Christmas.

The job situation is still in shambles and we are seeing it in our business.  There are many strong candidates out there looking for opportunities that just are not materializing right now.

How To Tell You Are In A Bad Economy

From the Herman Trend Alert (emphasis mine):

In December, companies with fewer than 300 employees experienced employment growth of 1.54 percent, representing the largest percentage increase since June 2010.

1.54 percent?  That is encouraging?  I know, I realize there has been little to no growth, but 1.54 percent is almost as miniscule as it can be.  This is the largest growth in 18 months.  To say it is a difficult employment market would be a monumental understatement.

A Hiring Boom

Well, it is good to be back at it after a nice Christmas break with the family.  It is even better to come back to read an article like this one from CNNMoney.com.  How about this:

"We’re looking at some leading indicators on employment, and they’re all flashing green lights," said Bernard Baumohl of the Economic Outlook Group, a Princeton, N.J. research firm.

Though most economists still expect a painfully high unemployment rate of about 9% at the end of this year, Baumohl and others think that stat masks more important signs of strength.

Baumohl and some other economists forecast between 2.5 million and 3 million jobs being added to U.S. payrolls in 2011, about triple the gains likely to recorded in 2010 and what would be the best one-year jump since the white hot labor market of 1999.

I am hopeful that these economists are correct.  If you would like an odd indicator, try this one:

Baumohl says another non-traditional employment indicator, the number of day-care workers, which has been edging up for four months and is now about 2% higher than a year ago. "People need more day care when they’ve got jobs to go to," he said.

Odd, but it seems logical.  The hole we are in is far greater than 3 million jobs as you can read in the article.  This would be a good start, but it is going to take years to recover.  In that light, a “hiring boom” may be overstating things.

A Great Headline

From Forbes.com:

How To Handle Post-Recession Job Stress

Post-Recession?  I think most people are still dealing with Recession Job Stress.  It gets worse:

The worst of the waves of layoffs may be over, but countless American workers who still have their jobs are unhappy at them, overloaded with increased responsibilities, short of colleagues to share the burden, and unsure where they can turn to look for something better. Few people got raises last year–many took pay cuts–and it’s not looking like pay hikes will come anytime soon.

Again, this viewpoint strikes me as seriously off target.  I equate this type of unhappiness to people who complain that their ice cream is too cold.  There are countless people attempting to find employment so stories involving the stress of not receiving a raise seems out of touch.

ROE Over ROI

Here is a somewhat ethereal concept I have been encountering in this present economy.  It starts with this – return on investment (ROI).  ROI has been the backbone of sales since time immortal.  This is the basis of sales in that customers pay the money to receive the solution.  As long as the customer views the return on their investment as greater than the investment, they will make the purchase (generally speaking).

The top-performing salespeople possess this motivation pattern (called Utilitarian).  They view prospects in terms of ROI – how much return ($) will I receive if I invest time to close them.  This principle has changed in the present economy.

Salespeople know that spending is tight – deals are difficult to close.  I am seeing a change in the salesperson’s approach:  they are measuring prospects based on Return On Effort (ROE).  This approach is akin to taking the long road and it is a wise strategy in these recessionary times.

Salespeople are realizing that extended sales cycles are the norm so they have to focus their effort in the most strategic prospects.  Yes, you could argue the effort is their investment and that would be accurate.  However, I talk to more salespeople who speak in specific terms of their effort to close the prospect.  Is it the deal worth it?

I think this approach is born out of the lack of deals closing.  What I mean is this – salespeople are working on qualifying and closing deals, but deals are closing slowly (if at all).  So now the salesperson is stuck with fewer closes.  Instead, they have to keep their effort level elevated even though they are not receiving the return/reward they are accustomed to receiving (a sale).  The salesperson must change the metric and focus on their effort and what they will receive for it.

As a sales manager, it is important to keep the salesperson focused on keeping their effort level elevated.  A bad economy has a way of derailing salespeople, even good ones.  There will be a payoff in the long term for their effort.  Do not let the discouragement of extended sales cycles affect their Utilitarian motivation.

Strongest Performing Cities

I’m not sure what to make of this, but it caught my eye:

Overall, the reading on local economies is still grim though, as home prices continue to fall and unemployment rates remain historically high, the report said.

The list of strongest-performing areas included several middle American cities that were boosted by an uptick in manufacturing jobs and home price declines that were more modest than in other parts of the nation. The weakest performers were mostly sunbelt cities which saw some of the largest declines in home prices and continue to lag behind the rest of the country.

chart_recession_proof_cities.03.gif

Honolulu just jumps off the page for me.

News From The Twilight Zone

From CNNMoney.com:

A jobless recovery? Hardly.

By historical standards, the labor market is recovering nicely — job growth has started earlier than in past recessions.

I guess I was unaware of how good it is out there.  I think this article comes with a large serving of Kool-Aid also.

Job Progress

I’m beginning to think we are becoming immune to employment reporting.  A sentence from the beginning and end of a CNNMoney.com article (emphasis mine):

The good news: Overall employers announced fewer planned job cuts.

Economists are expecting the report to show there were 120,000 jobs lost in August, an improvement over July’s 131,000 job loss.

In a prolonged recession, I guess these pieces of information are uplifting.

The Stalled Economic Engine

You know this entire GDP reporting process is an absolute joke.  This AP article indicates that the Q2 GDP is going to be revised down…a LOT:

The government is about to confirm what many people have felt for some time: The economy barely has a pulse.

The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent

Honestly, if a publicly-traded company were to do this, executives would be incarcerated.  How the government gets away with this propaganda is beyond me.

But if you want to get to the crux of the problem, you need read a bit further into the article (emphasis mine):

Consumers can’t be sure their jobs are safe, with unemployment so high. Business executives don’t know if sales and profits will grow enough to justify adding jobs. And potential changes to tax laws at the end of this year and other policy reforms also make it hard to plan ahead, economists say.

People have been overwhelmed by uncertainty,” said Ethan Harris, an economist at Bank of America Merrill Lynch.

Uncertainty stalls business growth.