Unemployment Rate Rises Again

As Friday draws to a close, I saw the below article pop on CNN.com and could not help myself but post it for your review. Unemployment rose to 5.5% in May, the biggest one month jump since February of 1986. I hope this doesn't put a damper on your weekend, but we should all remain aware of the current economic market and the strains it is having on society.

Jobless spike deepens economic pain
Biggest jump in unemployment rate since 1986 - combined with energy and housing woes - stokes fears about recession.

NEW YORK (CNNMoney.com) -- A spike in the unemployment rate - the biggest in more than two decades - raised new concerns Friday that a weak labor outlook, high oil prices and continuing woes in the housing and credit markets are leading the U.S. economy into a painful recession.

The government said Friday that the unemployment rate soared to 5.5% in May from 5% in April - much higher than economists had forecast.

The surge marked the biggest one-month jump in unemployment since February 1986, and the 5.5% rate is the highest level seen since October 2004. Unemployment is now a full percentage point higher than it was a year ago.

"You're not going to have a lot of people arguing 'no recession' with this data," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. The prolonged job loss and jump in unemployment are better indicators that the economy is in a downturn than is the traditional thumbnail rule of two quarters of falling gross domestic product, he said.

The jobs report came on the same day that oil prices soared to $134 as the dollar lost value against the euro and the yen. It also comes the day after the Mortgage Bankers Association reported that homes in foreclosure crossed the 1 million mark during the first quarter, a record high.

"All these things take time to digest," said Roger Bayston, a senior portfolio manager for Franklin Templeton Investments. "We believe that in the long-term the economic boat is going to righted, but in the near term everyone is going to be busy bailing water."

Teenage unemployment soars
John Silvia, chief economist with Wachovia, said the unemployment rate was distorted by a big jump in teenage unemployment in May, to 18.7% from 15.4%, as the school year ended and teenagers started searching for jobs. And the Labor Department figures were probably underestimating unemployment in the months leading up to Friday's report, he said.

"This report reflects what we should have seen over the last two to three months," said Silvia.
The Labor Department also reported Friday a net loss of 49,000 jobs in May, compared to a revised loss of 28,000 jobs in April. That was a touch better than economists' forecast of a 60,000 loss, but it marked the fifth straight month that the economy has lost jobs.

Overall, the economy has shed 324,000 jobs this year, the worst start to a year since 2002, when the nation was still struggling with the aftereffects of a recession.

The job losses in the payroll report were widespread, as the battered construction industry lost 34,000 jobs and manufacturers cut 26,000 jobs from the nation's factories. But the service sector also saw job losses in many sectors, as retailers trimmed 27,000 jobs. The business and professional services categories took a 39,000 job hit.

"The business and professional has to be a focus of concern. The job losses have broadened out," Silvia said. "Those are generally good-paying jobs. This is a clear sign the weakness is spreading beyond the construction and manufacturing."

Part of the decline in business and professional services came from a 30,000 cut in temporary jobs, bringing losses in that sector to 106,000 so far this year. Tig Gilliam, chief executive of Adecco Group North America, the unit of the world's largest employment firm, said that cut is another indicator about widespread concern among employers.

"As the economy slows down, the temporary employees are sometimes the first to go," he said. Temporary employment also tends to pick up just before a recovery, he said. "The May number shows there's no recovery (ahead) yet."

Jobs on the campaign trail
Presidential candidates Barack Obama and John McCain were both quick to react to the jobs report. Each argued that the dire employment picture was proof that they had the best solution for the nation's economy, and that their opponent's policy would be a mistake.

"This is a reminder that working families continue to bear the brunt of the failed Bush economic policies that John McCain wants to continue for another four years," said Obama's statement.

"We can't afford John McCain's plan to spend billions of dollars on tax breaks for big corporations and wealthy CEOs."

McCain's statement argued that tax breaks are more important to spur the economy in the face of weak employment.

"The wrong change for our country would be an economic agenda based upon the policies of the past that advocate higher taxes, bigger government, government-run health care and greater isolationism," said McCain's statement. "To help families at this critical time, we cannot afford to go backward as Senator Obama advocates."

Poor Management

Happy Friday! With the weekend rapidly approaching, I wanted to bring your attention to an article I recently read regarding poor management. Thanks to Ronald Katz and ERE.net, today's feature article analyzes how poor management can result in a great employee being let go. Now I know some of you are going to say that some cases are the result of a bad hire - and yes, I do agree with you. However, there a many an instance, where a manager fires a good employee because of their inability to effectively manage. I hope this doesn't ring too close to home, but I thought it valuable to share as we never know when we might find ourselves in a similar scenario. Enjoy -

You Didn't Pick Things Up Quickly Enough
Is it an employee's fault they didn't know what to do?
5/22/2008 by Ronald Katz

My friend was released after just 20 days on the job.

She was given work assignments to complete that had never been discussed in the interview. At her exit interview, her manager admitted he had overestimated her technical skills in the interview. She had not professed extensive technical skills in the interview. She was given no notice that she was to be terminated, just asked to come to the conference room at 3 pm on what turned out to be her last day.

Reflecting back, she realized that there had been virtually no communication with her manager over her last three days leading up to her termination. What's ironic is that she was actually getting a lot of work done then. She felt that she was finally just starting to get the hang of things.

This was during the time when her manager was probably meeting with HR to work out and finalize her termination. At the exit interview, she was told that she "didn't pick things up quickly enough."

My friend had asked lots of questions of her manager while employed there, particularly when given work that was beyond what had been discussed in the interview. But whenever she asked her boss about her assignments, he talked about other things and never really answered her questions.

When a manager says something like "you didn't pick things up quickly enough," this can also be seen to mean, "I didn't take the time to manage you well."

Especially with new hires, managers have to invest a lot of time in integrating the new employee. When a new piece of equipment is obtained for the office, there is often instruction in how to use that piece of equipment, at least for the person who is responsible for using it. We may even send the person to training in how to use the machine.

Sink or Swim?

We don't seem to do that consistently with people. We throw them into situations and expect them to "sink or swim." We cannot afford to have too many new hires sink. It just costs too much money.

It costs a manager something more than money to admit that he may not have managed the person in the way that they needed to be managed. He didn't take the time to figure out how to motivate the person. He didn't figure out how the new person learns best, through careful instruction or trial and error.

The cost is that the manager has to admit that he made a mistake. That he was wrong. It's much easier to blame the now-terminated new hire:

"You didn't pick things up fast enough."
"You weren't communicating enough."
"You didn't understand the culture here."
"You were a bad fit."

In all these cases, the common denominator may have been that the manager didn't do a good enough job in interviewing the person or integrating the new hire into the workforce in the first weeks or months. In every case, the manager blamed the employee for what may have been the manager's shortcoming.

Managing is hard work. It's not intuitive. No one is born a manager. Some people are born leaders, but managing requires training and it takes time.

Good managers can be developed, but only if they are given the time to learn, also the same way new hires need time to develop.

Managers need to master a broad skill set to be effective in all phases of the role:
Understanding how the department operates so that the right mix of jobs is created.
Interviewing (which is so much more than just talking to people) to effectively determine whether candidates have the correct skill-match for the position.

Orienting the new hire to the workplace and to the job and his or her colleagues. Integrating a new hire takes weeks, not hours. Too frequently, managers leave orientation up to HR. No offense to HR, but new hires are too valuable to be trusted only to HR. The HR team has a critical role to play in integrating new employees, but the new hire is going to listen far more to what their new manager tells them than anything HR has to say.

Setting performance objectives so that the new hire clearly understands what is expected of him or her.

Giving feedback on an ongoing basis, not just at the end of the year in an anxiety-ridden performance evaluation.

Recognizing and rewarding people for their effort as well as for their accomplishments.

When you look at all the expectations that we have of managers, it's easy to understand why we invest so much in management development and training. It takes time to become an effective manager. Anyone promoted to management generally figures this out in the first few days on the job.

The piece that too often gets overlooked is training our managers in people management. How to interview candidates, how to select the right ones who can be most productive in their environment, and how to continue to get the most out of them on the job. Managers need to learn how to engage their staff so they give their best effort on the job as opposed to just doing enough not to get fired.

The good news is we usually give new managers the time to figure out how to do their new job, in part because of all the time and money invested in developing this person to the point of promotion.

No doubt, this new manager would certainly be annoyed if after a few weeks in the new position, their manager called them into a conference room and started in with, "You're not picking things up quickly enough."

Building a Strong Recruiter/Candidate Relationship

In today's posting, Bret Pyle discusses the importance of a strong recruiter/candidate relationship, founded on open and honest communication. I am sharing this article because there have been times when individuals have not shared the complete story with me, leaving my client high and dry after an offer has been made. These have been few and far between, knock on wood, but they still happen. My goal with this article is to minimize even the infrequent occurences. Thanks to Bret and ERE.net for today's article and I hope it sheds light as to why it is so important to have an open and honest dialogue with your recruiter.

How to Set Expectations with Your Candidates
Stay in the driver's seat to maintain control of the recruiting process
5/27/2008 by Bret Pyle

We've all heard of the perfect candidate flaking out at the 11th hour. Reasons can vary from the infamous counteroffer, a surprise month-long vacation, or the candidate accepting another offer you never knew they had.

Like it or not, any time you are blindsided by your candidate, you've lost control of the recruiting process. This negatively impacts your client, your organization, and it directly reflects on you as a recruiter.

You can't afford to lose control when credibility is the currency to all recruiting transactions.
We will never be able to completely eliminate these types of situations; however, the goal of a best-in-class recruiter is to minimize them as much as possible by maintaining candidate control. This control refers to the partnership and relationship that the recruiter drives. The recruiter should always remain in the driver's seat, making the candidate the passenger. Control does not mean forcefully restricting what the candidate can and can't do. Remember, you want to build the relationship.

To help maintain control of the recruiting process, the recruiter should set the tone of the relationship from the very first conversation with the candidate. This includes verbally setting clear expectations as to what each party needs to bring to the table.

At times, this practice can be challenging for new recruiters who may question its value, but the first conversation is the foundation upon which your candidate relationship will be built. The right conversation will positively affect all future conversations and will help ensure a positive final outcome in the recruiting process.

Setting expectations is not just for the recruiter's benefit. The recruiter should clearly communicate the purpose of the conversation to the candidate so both parties understand what is required to ensure success.

During the initial conversation the recruiter should always:
Provide full disclosure of the job requirements, duties, and full responsibilities of the position. At this time, the recruiter should also nail down the expected compensation and benefits. Do not end the conversation without clear expectations about what the candidate needs to make and what you can offer.

Be available to answer the candidate's questions in an open and transparent manner.

Keep in close contact with the candidate through the qualification, interview and offer processes.

Let the candidate know where they stand in the hiring process and provide constructive feedback when necessary.

On the flip side, the candidate should always:
Provide you with full disclosure of their job search status. This will include, if possible, the companies or agencies that they have submitted their resumes to, the companies they are actively engaged with and the status of each of those engagements.

Provide you with a well-written resume, examples of their work when applicable and being available to answer in-depth questions about their background.

Keep you well-informed of any changes in their availability to interview or anything that would prevent them from starting a new role, including vacations that may conflict with your company's or client's schedule.

This is not a one-way or a one-time process. This should be the standard for each and every initial candidate conversation.

As a recruiter, ask your candidate: "Has anything changed in your search status?" on a recurring basis. I've seen more "back outs" in my career due to the recruiter not having a 360-degree view of the candidate, their motivations, and all opportunities they are exploring.

The goal of the first conversation is for the candidate to leave with a clear understanding that you're a professional, an expert in your industry, and a partner in the process. Also, that an open and honest line of communication is a critical component to the recruiting process.

You'll find one of two things when you discuss these mutually beneficial expectations with your candidate:

The candidate is amenable with the expectations set and it is clear based on their active participation with you during the conversation that they are engaged and committed to the role and interested in partnering with you throughout the process.

Or, your candidate will not be completely engaged with the process even after you talk through their objections and have presented the benefits associated with each of the aforementioned expectations. For example, the candidate may not be open to sharing their past salary history or their desired rate with you, they may not be open to keeping you informed on their search status, or unwilling to confirm changes with you in a timely manner. These are the candidates you potentially will want to pass on. I say potentially as I've been in this business long enough to know that the recruiting process requires us to be flexible (especially when working with top-notch candidates). Make this decision with one caveat: a candidate who is unwilling to conform to simple parameters will be more likely to throw you for a loop at some point in your recruiting process.

Know what category your candidate fits into and resolve any red flags before proceeding. After the initial conversation, touch base with your active candidates often. Determine whether anything has changed in their status and uncover and resolve any additional concerns.
Reconfirm their ongoing commitment to the opportunity. Many of us have learned the hard way that things change quickly, at time daily! Reconnecting with candidates often will minimize being caught off guard.

You must drive the recruiting process; the recruiting process should not drive you. To keep your candidates as partners in the process, do your part to proactively and routinely reach out, engage, and set mutually beneficial expectations with them. By driving the process, you will stay in control, help your candidates land an amazing job, and achieve record placement results.

Will Unemployment Rise? Some Economists Think So

A recent article from the Associated Press on FOXNews.com indicated that while the housing crisis may be turning the corner, our economy and unemployment may worsen. Not a feel good story for a Monday morning - but one I thought pertinent to share. Let me know your thoughts and have a great week!

Forecasters See Weak Economy, But Housing Rebound
Monday, May 19, 2008
Associated Press

WASHINGTON — First the good news: The worst of the painful housing slump and the credit crunch might come to an end this year. Now the bad: The economy will weaken further and unemployment will rise.

That's the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known by its acronym NABE. It will take time for any rays of light to poke through the economic clouds, though.

A growing number of economists believe the country is on the brink of a recession or in one already, dragged down by all the problems in housing, credit and financial markets. Now 56 percent of the economists think the economy has started or will enter a recession this year. That's up from 45 percent in a survey in February. If there is a recession, it probably will be short and shallow, economists said.

Forecasters downgraded their projections for economic growth. They now predict the economy, which grew by 2.2 percent last year, will slow to 1.4 percent this year. That's lower than the 1.8 percent growth projected in February. If the new figure proves correct, it would mark the weakest growth since the last recession in 2001.

Next year, the economy should grow by 2.3 percent, less than previously forecast and a pace that is still considered subpar.

"Although housing and credit markets will gradually loosen their grip, U.S economic growth is expected to only slowly return to health," said Ellen Hughes-Cromwick, president of NABE and chief economist at Ford Motor Co.

Given the outlook for sluggish overall economic activity, companies are likely to remain cautious in their spending and hiring.

The unemployment rate, which averaged 4.6 percent last year, will move higher. Forecasters predict the jobless rate will hit 5.3 percent this year and 5.6 percent next year.

Forecasters are hopeful that the housing slump — in terms of home sales — will hit bottom this year. However, economists were divided over whether the low point would be reached in the second, third or fourth quarters of this year. House prices, though, are still expected to drop this year and next.

On the credit front, economists predict conditions will improve in the second half of this year.
"The economy is still going to be weak in the very near term, but the worst is likely to end this year with respect to the housing decline and the credit crunch," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group, who was involved in the NABE survey. The survey of 52 forecasters was conducted April 17 through May 1.

Weakness in housing was cited as the factor most responsible for the economy's troubles. That was closely followed by credit problems and high energy, food and commodity prices.

With food prices marching upward, gasoline prices closing in on $4 a gallon nationwide and oil hitting a record high near $128 a barrel, inflation should rise. Consumer prices will increase 3.6 percent this year, up from a previous forecast of a 3 percent rise. Next year, prices should calm down a bit, with the inflation rate clocking in at 2.4 percent.

To bolster the economy, the Federal Reserve has been cutting a key interest rate since last September. However, when the Fed last lowered rates, in April to 2 percent, policymakers signaled that their rate-cutting campaign may be drawing to a close. Fed policymakers are concerned that moving rates lower could aggravate inflation. At the same time, they are hopeful that their powerful rate cuts plus the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses will lift the country out of its slump.

The forecasters believe the Fed will hold its key rate steady at 2 percent though the rest of this year. However, they predict the Fed will start bumping up rates next year to ward off inflation. They believe the Fed's key rate will rise to 3 percent by the end of 2009.

Economists, meanwhile, had mixed thoughts about the extent to which tax rebates will be spent this year. The more spent, the more energizing effect they will have on the economy. Roughly 35 percent thought households will spend 26 to 50 percent of the rebates, while a quarter believe 25 percent or less would be spent. Thirty-one percent thought 51 to 75 percent would be spent.
"We're likely to see the boost from tax rebates fading later in the year," Reaser predicted. "The recovery is expected to be quite muted."

(Copyright 2008 by The Associated Press. All Rights Reserved.)