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Technical Layoffs Increasing Despite Improving Economy!

July 30th, 2014

Despite the Commerce Department reporting today that: a) Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a seasonally adjusted annual rate of 4.0% in the second quarter and b) the U.S. economy rebounded strongly this spring, after a first-quarter contraction, resulting in positive growth over the past six months, layoffs of technical workers are soaring! For the first half of this year 48,402 technical workers were laid off versus only 28,883 for the first half of 2013. This is almost a 68% increase! Among those with major layoffs are such stalwart technical companies as:

  1. HP with 16,000 cuts.
  2. Intel with 5,350 cuts
  3. Texas Instruments with 1,100 cuts
  4. Verizon Wireless with 1,092 cuts.
  5. Sony Electronics with 1,000 cuts.

This is unfortunate because technical workers are among the most highly skilled American workers including R&D, scientific, engineering, IT, technical and manufacturing talent. Furthermore, technical companies are on the cutting edge of innovations, which traditionally drive future jobs growth. So what is the answer?

Our executive recruitment firm recommends 4 measures to assist these highly valued personnel.  First and foremost, I recommend a major change in thinking at most U.S. companies. The norm is to immediately shed workers during a downturn. Instead, Asian companies tend to encourage across-the-board sharing of a decline. For example, as reported recently in both the Wall Street Journal and the Huffington Post, hundreds of managers at the Samsung Electronics mobile unit voluntarily took a 25% cut in their first-half bonuses due to the company’s weakened profit performance. This is unheard of at American companies! However, adopting such a policy would not only avoid such drastic current layoffs, but also create more synergy between management and workers in the future.

If this first recommendation fails to reduce layoffs, then I have three additional, strong measures that should be offered by the Federal Government. First, spend a lot more on developing and disseminating novel retraining programs. In the Wall Street Journal article, “Just Whose Job Is It to Train Workers?,” one of the problems companies run into when trying to offer retaining for displaced workers is what is the profit benefit to the company? Though some U.S. companies like Hu-Friedy are forward thinking in their retraining offerings, most companies cannot afford to do so since there is no immediate payoff to them. That is why the government needs to step in.

Second, the government needs to encourage more entrepreneurship. Instead of launching massive, new tax burdens and mounds of regulations that stifle creativity, business expansion and jobs growth, the government needs to refocus their efforts on helping those willing to risk creating new businesses with lower taxes and less regulations!  As I wrote in past articles: a) b) and c) history proves that small, high-tech, entrepreneurial ventures have accounted for almost 70% of the net new jobs created in the past 2 decades before the recent recession. Furthermore, historically, there are several tried and true formulas that work best to encourage entrepreneurship. Among them is expanding successful programs like the SBA, which has a proven track record in mentoring and providing low cost loans to entrepreneurs. Many of these highly skilled, displaced, technical workers can be encouraged to start their own R&D companies in cutting-edge industries of the future. This will greatly benefit the U.S. economy with exponentially more high paying, technical jobs!

Finally, as I wrote in the past article these displaced workers need to be provided the best job hunting skills to increase their chances of landing their next job. Few companies currently offer any sort of outplacement assistance. That is why our executive recruiters created and offer free-of-charge the 12 Commandments of Interviewing, which are our top tips for job hunting. This is another avenue where the Federal Government can assist.

There is no easy solution to combating layoffs, but the four measures our executive recruitment team shared may be a step in the right direction.

What is your opinion?

Major Trend: Fewer People Changing Jobs!

July 25th, 2014

US Department of LaborOne trend both ours and other major executive recruitment firms have noticed during and after this recent recession is fewer employees are looking to change jobs. This is borne out by statistics from the Labor Department, which show that only 2,500,000 changed jobs in May (latest job figures available) down from 3,100,000 in 2006!

One major reason for this decline may be the significant drop in the monthly hiring rate, which was as high as 5,500,000 in 2006, but has dipped as low as 4,700,000 in May! This worries new Federal Reserve Chairman Yellen who recently said, “People are reluctant to risk leaving their jobs because they worry that it will be hard to find another.”

This jobs malaise has plagued many engineering recruitment agencies, scientific recruitment agencies and technical recruitment agencies like ours because some R&D, scientific, engineering, IT, technical and manufacturing positions remain in high demand, but short supply. For example, during our recent executive recruitment assignment for a high-level Lean Manufacturing Manager, many candidates I approached were interested in the position, but scared to make a job change!

U.S. employeesHistorically in the U.S. economy, job-hopping has been a main method for many workers (especially early on in their careers) to expand their skills sets and increase their salaries. Eventually, they settle down later in their careers and change jobs less frequently. This is a uniquely American phenomenon because job tenures in other industrial countries tend to be a lot longer. According to data from the Organization for Economic Cooperation and Development, workers in most developed countries average more than ten years at a given job! This contrasts with a lot shorter tenures for U.S. employees.

All executive recruitment agencies I have spoken with sound this same alarm. Without more frequent job-hopping, workers are less likely to find better jobs and wages to best meet their skills and lifetime aspirations. Because, according to economists Robert Topel and Michael Ward, as much as 66% of a worker’s lifetime wage growth occurs in the first decade of their careers, many young workers are most adversely affected by the lack of job changes.

What is your opinion?

Do 4-Year Degrees Yield Higher Salaries?

July 18th, 2014

2-year associates degreeHistorically, a 4-year degree has been a lot more valuable than a 2-year associate’s degree. Therefore, for generations this has justified the time and expense because it guaranteed a middle-class life style. However, as I wrote previously 2014 Job Market Uneven For Graduates. It benefits some in engineering, scientific, R&D, IT and technical areas, but not others.

Additionally, recent research from the Federal Reserve Bank of New York, College Measures and the American Institutes for Research demonstrates that holders of some associate degrees in scientific, engineering and technical fields are actually landing higher salaries, at least earlier on in their careers, than those investing the time and expense to gain BA and BS degrees!

graduate degreesThough this new research does continue to reinforce the notion that a 4-year college degree is worth the investment, it contradicts the long-term belief it is a lot more valuable than an associates degree. The growing body of data from states such as Texas, Colorado and Indiana proves this point. For example, in Indiana, figures show that graduates from Ivy Tech Community College are actually making more than the average 4-year degree graduates of Indiana University!

For example, New York Federal Reserve economists Jaison Abel and Richard Deitz calculated the annualized return on investment for the money invested into a college degree over a graduate’s career, pegging it at about 15% for current graduates. This figure, which far surpasses the typical returns on investment for stocks and bonds, has held largely constant for more than a decade.

U.S. jobs marketHowever, Abel and Deitz also found that the overall rate of return on a bachelor’s degree and an associate’s degree is very similar. Furthermore, this parallel value has remained constant for several decades in the U.S. jobs market. Though bachelor’s degree holders are earning more on average at about $65,800 than associate’s degree holders $46,300, if when Abel and Deitz factor in the cost of obtaining either degree (with bachelor’s degrees costing $110,000 to $130,000 versus associate’s degrees costing $40,000 to $60,000), the cost versus benefits (wages) remains constant at 15% return on investment for both types of degrees.

Anecdotally, my internal executive recruitment team, other engineering recruitment agencies we collaborate with and even the internal engineering recruiters and technical recruiters at many of our clients substantiate this fact. For example, in a recent search we did for Project and Process Engineers in injection molding, we found that most of the best-qualified candidates in fact had only acquired a technical or scientific or engineering associates degree.

In closing, does this mean that you should lean towards an associate’s degree over a bachelor’s? Not necessarily. It depends upon the field you choose. However, this is a fact you should take into consideration when deciding upon the time and expense of your education.

What are your thoughts?

More Foreign Workers: Better For U.S. Wages?

July 11th, 2014

A recent study done by three academic economists claims that more hiring of foreign workers by U.S. employers will also raise the wage scales of U.S. born workers. University of California, Davis researchers Giovanni Peri, Kevin Shih and Colgate researcher Chad Sparber collaborated to examine wage data and immigration in 219 metropolitan areas from 1990 to 2010. They found that cities with the largest influx of foreign-born workers in R&D, engineering, science, mathematics, IT and technical fields (also called the STEM professions) translated into the fastest increase in wages for U.S. born, college-educated professionals.

Importing wage growth

All three studied how wages for native workers shifted along with immigration. They found that a one-percentage-point increase in the share of workers in STEM fields increased both: a) the wages for college-educated native born U.S. workers by 7-8 percentage points and b) the wages for non-college-educated native born U.S. workers by 3-4 percentage points.

However, all three researchers have provided earlier work demonstrating the benefits of immigration. This further research cements their position that immigrants can boost the productivity of the overall economy because as professor Peri says, “then the pie grows and there are more jobs for other people as well.” Furthermore, Dr. Peri claims that this research bolsters the case for raising or even removing the caps on H-1B visas (the program that regulates how many high-skilled foreign workers employers can bring into this country). The current annual cap on H-1B visas is 65,000 for first-time applicants and 20,000 for workers with advanced degrees.

As an engineering recruiter who regularly places STEM professionals, I am not sure that I agree with this research. Immigrants may not be needed to fill many STEM jobs and those wage gains stated in their research could be even greater without the presence of H-1B workers. My executive recruitment staff regularly encounters advanced degreed engineers, scientists, R&D, IT and technical candidates. In fact, many STEM degreed candidates do not even land STEM related jobs! Furthermore, this research attempts to isolate the cause and effect of a shift in the supply of immigrants instead of the increased demand by employers. Instead, they should have calculated how the number of skilled workers has changed over time in each area they covered.

In my regular roundtable discussions with other engineering recruiters, scientific recruiters, IT recruiters, R&D recruiters and technical recruiters, many share my same thoughts. It is true that for some hard-to-fill positions, H-1B is necessary. However, we need to train our own internal workers to better serve American employers. This would be a boon for internal management recruiters as well as external executive recruiting firms.

Please share your valuable views with us…

816,000 Jobs Created Last 3 Months: TIME FOR STAFFING AUDIT!

July 3rd, 2014

My executive recruitment team has realized for months that our clients are rapidly adding engineers, scientists, R&D, technical, IT and manufacturing talent. This was borne out by today’s Bureau of Labor Statistics (BLS) report, which said that the unemployment dropped .2% to 6.1% marking the lowest level since September 2008! BLS also revised upwards the number of jobs created in both: a) May from 217,000 to 224,000 and b) April from 288,000 to 304,000. This means that 816,000 new jobs were created in the last three months!

Jobs creation was across the board including:

  1. Professional and Business Services gaining 67,000 last month, 122,000 over the last two months and an average of 53,00 new jobs over the past year.
  2. Retail Trade employment increased by 40,000 in June and has averaged 26,000 new jobs per month over the past 12 months.
  3. Food Services and Drinking Places employment rose by 33,000 last month and 314,000 over the past year.
  4. Health Care added another 21,000 last month, 55,000 over the past two months and an average of 18,000 per month over the past year.
  5. Transportation and Warehousing added 17,000 new jobs last month, 33,000 over the past two months and an average of 11,000 new jobs over the past 12 months!
  6. Financial Activities employment grew by 17,000 last month.
  7. Manufacturing added 16,000 new jobs last month.
  8. Wholesale Trade grew by 15,000 last month and 140,000 new jobs over the past year.

Additionally many of my engineering recruiter, R&D recruiter, scientific recruiter, IT recruiter, technical recruiter and manufacturing recruiter brethren have reported to me in our regular brainstorming sessions that their clients have ramped up hiring in the last few months (especially engineers, scientists, R&D, IT and other technical employees). Unfortunately, few are prepared for this momentous recruiting surge.

As a result, we recommend a 360-degree audit of hiring company’s staffing needs including:

  1. Full assessments of all departments’ requirements for the next 18 months.360-degree audit of hiring company’s staffing
  2. Thorough evaluations of talent needs and comparisons to the current marketplace landscape including manpower availabilities versus their competitors’ needs and current efforts.
  3. Researching new methods for securing talent within the organization.
  4. Increasing the recruiting prowess of hiring managers.
  5. Brainstorming sessions to discuss actual and projected regulations and how they will affect abilities to secure key talent in the future.

To assist hiring companies, we have prepared a list of 12 key tips we recommend for recruiting. Please go to  to learn more.

What are your hiring experiences at your company?

First Time CEOs: Tough Task!

July 1st, 2014

A major challenge for a first time CEOAs I wrote in past articles 3 Steps To Internally Recruiting Your Next CEO and NBC follows 3-Step Succession Plan In Replacing Jay Leno replacing a Chief Executive Officer (CEO) or other high level performer can be a very daunting task. There are many causes for this. One major reason is first time CEOs face a quantum leap into new reality according to a recent cooperative study by both Boston Consulting Group and the executive recruiting firm Spencer Stuart. The study of 389 recently minted CEOs found the perception of results has a greater influence on newcomer’s job security than actual results.

Another study of 50 first time CEOs by executive recruiter Heidrick & Struggles found that improving results requires a rapid management shake-up. This is often a major challenge for a first time CEO. Their most common complaint is that they had not acted quickly enough to replace key, high-level managers who needed to be replaced. Many executives I placed as a technical recruiter in turnaround situations share this objection.

Carin Stutz has resigned as CEO of Cosi Inc.At least 20 U.S. public companies chose a first-time CEO in the last 2 years. This includes General Motors, RadioShack Corp. and Duke Energy Corp. All faced a steep learning curve and impatient boards of directors eager to quickly replace them. For example, Cosi, Inc. quickly pushed out Carin Stutz after only 17 months on the job. She later commented, “I certainly tried to move swiftly to bring high-quality talent, but it never seems fast enough.” She shared power with investment manager Stephen F. Edwards who wanted her to more quickly shake up her management team. Instead, she preferred to give executives time to prove themselves. Unfortunately, as Cosi’s fortunes worsened, she got pushed out last June.

Another related issue with new CEOs is they must rally the troops with a clear vision. Unfortunately, that is easier said than done.  The new CEO may have the greatest plan in the world, but if current employees are not listening, this will be a recipe for failure.

One textbook case seems to be Microsoft. As I shared at Microsoft’s New CEO Bearing Fruit Satya Nadella is already steering their fortunes to a more mobile path. This seems to be working and will provide new life into the tech giant.

There is no one right way to choose a first time CEO. With any selection there will be a steep learning curve. All executive recruiters and executive recruitment teams will caution to be diligent in your vetting of any potential candidates. After that when the CEO is selected they will need to hit the ground running quickly!

What are your thoughts?

2014 Job Market Uneven For Graduates

June 25th, 2014

The 2014 job market for recent graduates has improved over the last two graduation job markets, but that improvement is uneven. For college grads aged 20-24 the unemployment rate this year is 4.4 percent, which is greatly improved from 7.2 percent last year according to the Bureau of Labor Statistics. This is almost 3 times better that that of their peers possessing only a high school diploma, which is 13.8%! However, these unemployment rates vary widely depending upon the field.

US job market

Recent college graduates with degrees in health care are experiencing only a 3% unemployment rate. Furthermore, a lot of hiring is being done for those with computer software, nursing and other engineering, R&D, scientific, IT and technical degrees. Additionally, many engineering recruiters, scientific recruiters and technical recruiters who are part of my executive recruiting monthly roundtable have shared that many of their clients are actually paying recruiting fees for recent graduates. This is a sign that these technical fields are in short supply and high demand.

This contrasts with an unemployment rate of 8% for those college graduates with liberal arts degrees according to a recent study by the Federal Reserve Bank of New York. Furthermore, not all engineering, scientific, R&D, IT and technical fields are in high demand among employers. For example, civil engineers and architects are finding it hard to land a job due to the continued weakness in the building construction industry. In these high unemployment areas when jobs are available they are usually temporary (contract) employment. Unfortunately, many recent graduates do not effectively mine these temporary opportunities.

Because of the slow growing economy countless companies fail to immediately hire full time employees due to the uncertainty of the future. However, they do often convert the best of the their temporary (contract) employees into full time positions after they prove themselves. That is why I recommend “Four Steps To Converting A Temporary Position Into A Full Time One.” This strategy will provide you a differential advantage versus your intense competition among other 2014 graduates for limited job opportunities. Please go to my recent YouTube video on the subject.

5G For Future Jobs!

June 15th, 2014

Many of my clients constantly complain that this administration seems preoccupied with job loosing strategies such as upping the minimum wage to $10 and the Affordable Healthcare Act. That is why most seem to focus on hiring temps instead of full time workers despite desiring to grow their operations. Instead, our government should concentrate on high technology, job-creating efforts like leading the world in 5G research and development. In fact, our competitors South Korea and the EU are doing that now!

5G NetworkHistory proves that the best, new and high paying jobs are created in novel industries that may not exist today. In fact, 5G may be one of those industries. Many of my engineering recruiter, scientific recruiter, technical recruiter, R&D recruiter, IT recruiter, manufacturing recruiter and executive recruiter brethren salivate at the possibilities of 5G. They say that such a desired technology and industry will create endless streams of high paying, state-of-the art engineering, scientific, IT, R&D, technical and manufacturing jobs.

Look no further than consumer appetites for proof that 5G will take off as a desired technology and industry. Market research shows that consumers crave faster and faster connection speeds so that they can more quickly download their latest videos and live stream their favorite TV programs. Unfortunately, current offerings such as 3G and 4G do not offer seamless connections. Viewing is often interrupted by the technology limitations of 3G and 4G.

5th Generation network

Image source:

One major impediment to progressing to 5G is our educational system. As I reported in past articles Educational Reform May Fuel Better Prepared Technical Workers and Will Robots Steal Future Jobs? we need to significantly ramp up our K-12 math, science and reading education to be able to generate the necessary future engineers, scientists, IT, R&D, technical and manufacturing experts to accomplish this! PISA (Program for International Student Assessment) recently reported that our teenagers rank 31st in the world in math and 24th in the world in science! This is unacceptable and will impede any efforts to create robust technologies like 5G because we will not be able to produce enough bright and talented engineers, scientists, IT, R&D, technical and manufacturing talent to service the demand of 5G companies looking to push the envelop of the technology.

Maybe starting a Manhattan Project to simultaneously ramp up our education and push the envelop of 5G is in order. Develop an executive recruitment team to uncover the brightest minds and technologies necessary to accomplish this. Then focus all scarce government efforts on both: a) making our children number one in the world in math, science and reading and b) becoming the leader in 5G. The future of U.S. education and jobs depends upon this!

Unemployment Same At 6.3%

June 6th, 2014

According to today’s Bureau of Labor Statistics (BLS) report, the unemployment remained steady at 6.3%, adding 217,000 more new jobs in May.

BLS said that many sectors added new jobs including:Unemployment Rate 6.3%

  1. Professional and business services gaining 55,000 last month and has added 224,000 new jobs over the past year.
  2. Health Care added another 34,000, which was almost double the 19,000 it added in April!
  3. Leisure and Hospitality continued to grow by adding 32,000 new jobs last month and 311,000 over the past year!
  4. Transportation and Warehousing added 16,000 new jobs last month and has averaged 9,000 new jobs over the past 12 months!

Therefore, it is my professional opinion as an executive recruiter that it is time to engineer a new resume. To that end, one mantra I recommend is: numbers, numbers, numbers. This means to include as many quantitative accomplishments as possible. Instead of saying, “I was part of a team to implement a new MRP system” one should quantify that. For example, “as a result of my 34 man-hours managing a team of 7 IT professionals, software engineers and design engineers which resulted in our new MRP system being engineered 30% ahead of schedule and saving our company $4.5 million.”

Especially if you are an engineer, scientist, IT, R&D, technical or manufacturing professional, you should include such quantitative accomplishments as patents, awards and any ways you have made or saved money for your employer. This will be a lot easier to quantify if you are an engineer, scientist or technical professional, but everyone can accomplish this task with some planning and calculations. Remember as a rule of thumb for every dollar you are paid in your job, your company will earn $3 or more for your efforts. To that end, an employer needs to feel that you will be generating profit from your work. That is why you should include as many “numbers” in your resume as possible.

Will Robots Steal Future Jobs?

June 2nd, 2014

Amazon Prime AirEverywhere you turn are the wonders of cutting-edge technology including 3-D virtual reality, smartphones, robots and Amazon’s proposed new Prime Air pilotless drone delivery system that can deliver packages within 30 minutes of a customer order! As a result, our civilization has moved forward quantum leaps in R&D, scientific, engineering, IT, technical and manufacturing development.

Unfortunately, these breakthroughs may cost us many of our future jobs! In a recent study entitled, The Future of Employment: How Susceptible Are Jobs to Computerization,” authors Carl Benedikt Frey and Michael Osbourne of Oxford University predict that nearly 50% of U.S. workers will be replaced by robots within 10 to 20 years!

Japanese Robot HRP-4CResearch shows that as machine learning has dramatically progressed and lowered in cost, jobs like real estate agents, loan officers and office clerks will be replaced by robots and automation using artificial intelligence (AI). AI has already started to permeate the workplace with new tools that replicate human judgments that were previously too complicated and subtle to implement into a computer instructions just a few years ago. These AI Algorithms “learn” from past examples, which eliminate the need for mass, new software code for every new command. Such IT advances coupled with R&D advances in mobile robots make it highly likely that many of today’s U.S. workers will be replaced by automation!

Robot of the future JobOne current example of this dramatic transformation is the online peer-to-peer lender Daric Inc. Partly funded by former Wells Fargo & Co. Chairman Richard Kovacevich, this startup company has developed an AI algorithm that has not only learned what types of past borrowers make for safe credit risks, but also constantly updates its IT program to predict the most creditworthy in the future. As a result, Frey and Osborne believe that such AI programs will eventually replace 98% of today’s loan officers!

This is not all bad news. At executive recruiting conferences I regularly meet with other engineering recruiters, R&D recruiters, IT recruiters, scientific recruiters, technical recruiters and manufacturing recruiters to discuss the most difficult to fill positions. We all believe that many related engineering, scientific and technical positions, including hardware, software, robotics, AI, mechanical and biomechanical, will continue to be in short supply and high demand for many years to come as new, future derivations of AI are developed.

The main problem as I shared in one of my previous articles Exercise Our Nation’s Students Into More Engineering, Scientific and Technical Graduate Studies and Jobs is we need to dramatically improve our math, science and reading education to produce future leaders in the technical, scientific, engineering, IT, R&D and manufacturing fields. Without enhanced K-12 educational training we will not be able to generate enough engineers, scientists, R&D, IT, technical and manufacturing professionals needed for future AI, robotics and automation development.

What are your thoughts?


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