Saturday, October 30, 2010

Against All Odds...Contingency Search (Part 1)

Contingent: Having a cause-and-effect relationship with the occurrence of something else. See also conditional and provisional. (

For the most part, I do my headhunting on a contingency fee basis. When clients (employers) ask me what I charge to do a search, I tell them it’s FREE. That’s right; I do the search for free. Now the placement is another matter. It doesn’t cost an employer anything UNTIL they actually hire one of my candidates. I don’t get paid until I make the placement. Getting paid is better than not getting paid. That being the case, I am inclined to only accept searches where there is a reasonable chance of success.

So how do I determine if there is a reasonable chance of success? I use a four point check list:

Client relationship is at the top of the list for a reason. Before taking a search, my first question is always: What sort of a relationship do I have, or am I likely to develop, with the client? In my mind, this trumps all other issues. The company can be great, the job outstanding and the search conditions highly favorable. But, if I do not have a productive relationship with at least one key client contact, my odds of success go down dramatically. And if the company, the job or the search characteristics are weak (and in most cases one or more of them are), then my odds of success really go in the tank. The good news is that in most cases, if I get far enough along to actually get the search opportunity, I can establish a decent working relationship with the client. On a scale of 1 to 10 with 10 being the highest, if I can get to a 5 or 6 level relationship and the other factors are at least manageable; then I’ve got a fighting chance at success. Will I take a search where the client relationship is weak? If it’s a new client, yes. There’s always a chance that I can eventually build a strong relationship with a key hiring authority in that organization. But if it’s a client where I’ve had bad experiences and I just know that it’s not likely to change; I’ll suggest that they consider using another search firm.

Where the client relationship really comes into play, is when some of those other factors are highly unfavorable. As an example, let’s say I’ve got a company that is under-performing financially, the job specs are very tight and the compensation is low. If I have a productive relationship with the client, preferably the hiring authority, and I can have a candid conversation regarding these issues; it is very likely that we can tweak things just enough to have a successful outcome. Hopefully, that successful outcome will be a win-win-win: for the client, for the candidate who is hired and for me. But if you’re in this business for the long-term, sometimes it’s just a win for the client. Maybe after that candid conversation, the best option for the client is to promote from within. It might be a stretch promotion, but it’s the best option. Ultimately it’s about doing the right thing for the client. In order to do that, we need more than a transactional relationship. And the closer we can get to a level 10 relationship, the better.

So assuming that I’ve got something more than a “transactional” relationship with The Client, the next item on the checklist is The Company. We’ll talk about that next week in “The Good, the Bad and the Ugly…. Contingency Search (Part 2)”.

Saturday, October 23, 2010


By now we’ve all heard about the bedbugs and we’ve heard different theories regarding their resurgence. Most experts agree that banning of DDT in pesticides and increased international travel are primarily responsible for the bedbug revival. While I agree that these two factors have contributed to the problem, I have another theory and it involves hotel bedding and the French. And it’s just one more example of unintended consequences.

I’ve traveled for years. I remember when all hotel rooms smelled like smoke and unless you brought your own alarm clock you had to ask for a wake-up call. (And I remember not getting wake up calls as requested.) I remember no free breakfast, no USA Today and really ugly carpet in those old Holiday Inns. For the most part, hotel stays are much nicer now than they were “back in the day”.

But a few years ago I began noticing a new and disturbing trend. It started in the really nice hotels. Now it’s in virtually any hotel than doesn’t rent rooms by the hour. At first it just aggravated me, but now that this bedbug thing has come back around, I think it’s time to sound the alarm. Duvets are providing aid and comfort to the bedbug community. (According to my wife, Duvet is the proper name. It comes from the French word for “down”. I, on the other hand, am inclined to call it what it is: a big, fat, worthless quilt.)

A duvet serves even less purpose on a bed these days than decorative pillows. I mean really, who needs a down-filled quilt that’s 3 inches thick? We are sleeping in a climate controlled room! These duvets are like a thermal sleeping bag. Give me a break. So here’s my drill and I think a lot of you are just like me. I literally have to un-make a hotel bed before I can sleep in it. The duvet has a top sheet and a bottom sheet, then there’s a sheet over the mattress. (And then there’s also a big thick bed spread over the entire mess along with those totally useless decorative pillows.) I pull all this crap off the bed and start over. I end up with a bottom sheet over the mattress and one top sheet and sleeping pillows. An entire corner of the room is now taken up by a pile of bedding which consists of a bed spread, decorative pillows, at least one sheet and a duvet; aka a big, fat, worthless quilt. And guess where bedbugs like to hang out: “Nesting locations can vary greatly including luggage, vehicles, furniture and bedside clutter” – Wikipedia. (I think that my pile of useless bedding and bedding accessories would qualify as clutter.)

So what’s my point? Form doesn’t always follow function and function doesn’t always follow form. Sometimes pretty turns into ugly. And if something is likely to end up in a pile on the floor, maybe it’s not worth doing in the first place.

Friday, October 15, 2010

Getting U Down (Part 2)

So what should our government do? Why not start a program that will provide job training? Why not offer loans and grants and other financial assistance to deserving folks who just need a “hand up, not a hand out”? Why not? Because we already have over 60 federal programs that supposedly do this. There are probably twice as many state, regional and local programs attempting to do the same thing. If you’re really bored sometime, read the Workforce Investment Act (WIA). That’s just one program and it looks great on paper. And if you add in the all the other programs, I see no reason why we should have 3.2 Million jobs going unfilled with over 14M unemployed and probably another 20-30M who’ve just given up and exited the workforce. So I’m thinking these programs must not be working all that well. If a private business had this many departments, programs, task forces and special projects spending money to address one issue, they would go broke. Oh that’s right, our government has gone broke. Repeat after me: "We don’t need another government program."

So what should our government do? The best way for the government to get the U (unemployment) down is to get the E(economy)up. I think there are three areas where the government must take action. Number one, tax policy should encourage business investment and profitability IN THE USA. Ours doesn't. Number two, massive investment is needed in our infrastructure. We are behind the curve and falling farther behind. The projects underway and/or being planned are nice first steps, but not nearly enough. Number three, get serious about energy. We must reduce our dependence on foreign oil. It’s going to be painful and take a lot of sacrifice, but it must be done. I honestly believe that if the politicians would just give half as much attention to these three issues as they do to getting re-elected, we could accomplish great things.

But the results won’t be there within an election cycle. So it is unlikely that our politicians will step up and do the right thing. If that is the case, then I would just say to our leaders in Washington…put down the shovel. Please give us a chance to climb out of the hole, before it gets any deeper.

Saturday, October 9, 2010

Getting U down

Last week I talked about unemployment rates. If you go back and read that blog entry, you’ll see a significant disparity in the rates for various categories. These gaps are there in good times and bad. I have no idea how to balance the scales. I’m not even sure that we should try. The government and the unions have tried to do so for well over half a century. How’s that working out for us? On the other hand, I am concerned about the ever increasing gap between the haves and have-nots. But let’s talk about what we can do today to go from Big U to Little U.

First of all, let’s convert percentages to numbers of people. If we use U3, the government's official unemployment calculation, we have just over 14 million unemployed people in this country. In 2009 the average for the year was 14.2 million and while the number is coming down ever so slightly, we’ll probably average about that same level in 2010. Before the recession we had 7 million unemployed. So, I say let’s focus on the 7.2 million who have been added to the unemployment roster.

If I could wave a magic wand and create over 3 million jobs would that help? Well, consider it done. According to the Bureau of Labor Statistics (the same folks who keep track of unemployment), we have 3.2 million job openings in the U.S. There’s good news and bad news here. The good news is that there are 3.2 million jobs. The bad news is that they do not necessarily line up with the skills, locations or compensation expectations of the unemployed. For example, 1.2 million of the newly unemployed came out of the construction industry. Only 68,000 of the 3.2 million job openings are in construction. Another 1.2 million of the newly unemployed came from manufacturing. Only 200,000 of the 3.2 million job openings are in manufacturing and by the time you factor in skill requirements, location and compensation; a significant number of those 200,000 jobs will go unfilled; or be filled by currently employed workers who are in the right place with the right skills and whose job change will create yet another open position that doesn’t match up well with the unemployed population.

It’s worth noting that the number of unemployed “professionals” jumped by almost a million when the recession hit. But now there are over 600,000 job openings for people in this category. Again, there are issues of skills, location and compensation, but the recovery in this group is likely to happen much faster than it will for construction and manufacturing.

So what should our government be doing to put at least 7 million of our fellow Americans back to work. That’s next week's subject…but I’ll give you a hint…It ain’t more food stamps.

Saturday, October 2, 2010

The Real U

Let’s talk about the “U”. The “U” as in unemployment. The Bureau of Labor Statistics actually calculates SIX different U’s. The published unemployment rate is U3 and the August 2010 number was 9.6%. Pre and post 9/11 lows were 3.9% and 4.4%. Then there is U6, the super-sized measurement of U.S. unemployment (It’s also an age classification for youth soccer, but I digress). In addition to all those folks in the regular unemployment rate, U6 also counts "marginally attached workers" and those working part-time for economic reasons. Some of these part-time workers counted as employed by U3 could be working as little as an hour a week. And the "marginally attached workers" include those who have gotten discouraged and stopped looking, but still want to work. The August 2010 U6 rate was 16.7%. Pre and post 9/11 lows were 6.8% and 8.0%.

There is yet another measure of unemployment published by John Williams, an economist based in Oakland California. He does his own research and publishes a newsletter called Shadow Government Statistics (SGS). His SGS unemployment rate is similar to U6 but includes more of the “marginally attached”. It’s usually 4 or 5 points higher than U6, so that puts his U over 20%.

So what it the real U? That sort of depends on “U”. If you are among the unemployed, the U means “U are not employed” and that’s the only statistic that matters. But if you are not Unemployed it is likely that you are at least 25 years old, married, white, female, hold a management or professional position and have a college degree. The statistics are interesting and compelling.

Unemployment rates by categories:

25 yrs and up 8.3%
20-24 14.9%
16-19 26.3%

Married: 6.4%
Single: 13.6%

White 8.7%
Afro-Am 14.9%
Latino 12.0%

Men 10.6%
Women 8.6%

Job Category:
Management/Professional 5.1%
Services 10.6%
Office/Admin/Sales 9.1%
Blue Collar 12.1%

Less than High School 14.0%
High School 10.3%
Some College 8.7%
Bachelors Degree or above 4.6%

So what should we do about the “U”? My thoughts, next week.