MRINetworkFirst Friday Preview
Volume 3 Issue 8Auguest 2009 >
UNITED STATES>
The Recession’s Long Tail >
In the last few weeks, an anonymous donor sponsored more than 1,000 billboards across the country sporting messages like “An interesting fact about recessions ... they end.” >
It is a simple statement that is being reported more and more every day. In July, Lawrence Summers, the director of the White House’s National Economic Council said to Congress, quite plainly, that we have stepped back from “the abyss.” >
The Economic Cycle Research Institute has said that the leading indicators are showing a pronounced, pervasive, and prolonged rise, suggesting that the beginning of a recovery is imminent. >
Macroeconomic Advisors, another leading economics firm, is predicting 2.9 percent economic growth in the current quarter and that the official end of the recession already took place in the second quarter. >
The Federal Reserve’s Beige Book from July 29 showed signs of bright spots for technology, military products, and pharmaceuticals throughout the country. New York, Philadelphia, and Atlanta all cited positive near-term outlooks for manufacturing as well. Boston, Kansas City and San Francisco experienced either flat or modestly increased consumer spending. >
In the most reassuring sign yet, GDP contraction in the second quarter slowed from 6.4 percent to 1 percent. >
So, it’s all good. Soon, the economy will be humming along again, and the recession will be a distant memory. Right? >
“After the dot-com bubble, communications firms stopped hiring for almost a year, if not more,” says Greg Dubas, vice president of Management Recruiters of Union County. “Seven, eight years later we still see that gap in experience. Some younger people have stepped up, but if you look at the amount of available talent, you can still very distinctly see the impact of hiring freezes almost a decade later.” >
Such talent gaps, referred to as doughnut holes, crop up in various industries as there is a temporary loss of interest in a career or, as in the dot-com bubble burst, employers instate hiring freezes. In the long-term, these doughnut holes are difficult to overcome. >
“The only way to quickly create someone with eight years of experience in a field is to start with someone who already has seven years,” says Dubas “So, once a doughnut hole forms it will remain in the workforce until that class of workers starts retiring.” >
“We’re coming out of one of the most pervasive hiring slumps in a generation, and few industries were unaffected,” says Tony McKinnon, president of MRINetwork. “To the class of 2025 the credit crisis of ’08 will sound as foreign as the oil crisis of the 1970s seems to graduates today. For workforce managers, though, finding talent that got their start in this period will be an uphill battle for years to come.” >
Those reaching the first rung on the corporate ladder in the coming years will have an opportunity to step up, excel and advance more rapidly to fill in the gap, but it will remain. >
Employers can take a lesson from industries that had to tackle doughnut holes in the past. Engineering, accounting and hospital nursing departments have all suffered from their own talent gaps, and in response, have long been some of the most frequent users of contract staffing. >
“By bringing in contract staff, people can hit the ground running to fill a gap, while internal candidates are groomed for the role more permanently,” says McKinnon. “No one wants to get demoted, or denied a promotion because there is no one to take their spot. Contract staff, though, can plug that hole, making sure the work gets done, but without causing bruised egos when those staffers are no longer needed.” >
“We’re kind of like a ship on the other side of the storm right now,” notes McKinnon. “We’ve made it through, but there are going to be some holes to attend to for awhile.” >
Provided by MRINetwork www.MRINetwork.com Edited by Sean Muir (212) 687-8999 smuir@KitchenPR.com >
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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
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