Talent Transformation

I personally back a lot of what is being said here and feel it is very relevant.
Well worth watching.

Friday Humour

Normally I'm pretty serious in this blog but this was too much fun to let go. I'd love to say I've never seen anyone do anything like this in recruitment but that would telling a lie.

Enjoy.

Understanding an investors mindset

As part of my job I'm regularly approached by people who would like us (IRI - visit http://www.irigroup.com/) to invest in their company or business venture. I never cease to be amazed at how many unrealistic requests we get for investment. For those thinking about seeking investment I would suggest that you tune into this show called Shark Tank (US version of Dragons Den)




There are several things that those seeking investment need to understand about winning an investor over;

1. Know your stuff. Know your numbers, know your market, know your customer, know your margins, know your profits, know your customers. Yes, know it all!
2. 100% of nothing is nothing! Think exit price not entry value. 10% of your company for $500k? Your company isn't worth what you think its worth, be realistic about valuations and don't under estimate the value of your investors time, contacts and experience.
3. Cash is King. A good idea 99.9% of the time worth nothing. You'll need capital to take it to market. Sure your idea and hard work are worth something but it's not everything.
4. Treat your investors cash like it is your own. Make sure you spend every dollar like it is your last because it might just be.
5. Show how we will make a return on investment (ROI). You ask me to invest $500k. The cost of that $500k is a significant opportunity cost for your investor. That money can make them money somewhere else if not with you. You need to show why it is you and not the next guy.
6. Don't get greedy! A deal is a deal. Once agreed don't go back on your agreement. If you promise to deliver something then deliver it! Don't come back after the fact to blame everyone else. If the business does well don't come back demanding more equity and returns. You wouldn't be there in the first place if your investor hadn't backed you.
7. Its more than just the money. Chances are your investor is more experienced than you. Listen to their advice, learn from their example. Their opinion matters and their time is valuable.

There are a lot of lessons you can learn about what not to do by watching the very first episode of Shark Tank. http://beta.abc.go.com/shows/shark-tank/ - If your thinking about talking to us about investment I strongly recommend you watch this show first.

A changing landscape - Recruiters must adapt

I've been in Hong Kong almost 9 years having arrived right on the back of the dot com demise of 2000 and then going through SARS of 2003 I'd like to think I've seen my share of ups and downs in this market. However the challenges we face in 2009 are somewhat unique as the dot com bubble was largely limited to a particular sector in IT&T and SARS was really an Asia only problem. 2008/2009 however is global and on a scale unseen by many including myself in my working career.

The changing landscape requires us as recruiters to change our attitudes and adapt. I suspect that the vast majority of us will continue to do the same thing tomorrow as they did yesterday and expect different results... I think that is the definition of insanity. Recruiters must realize that they are no longer in the driving seat and must adapt accordingly.

1) Candidates are still hard to find but now also are the jobs!

Eh? Surely with rising unemployment candidates are easier to find... wrong! The dynamics of the market are the same but the goal posts just shifted. Moving jobs is about confidence in the future. If you aren't confident about the future and unsure you are more likely to just stay where you are because 'better the devil you know than the devil you don't'. Add that to the fact that the global workforce is still ageing and that qualified and experienced candidates are still hard to find and you have a market that is even harder to work.

The challenge is now further complicated by the fact that the jobs also are hard to find. Companies hire when they are confident and when they are unsure they either freeze hiring or they scale back just in case. Better to cut hard and deep than to not cut far enough is the old adage. To illustrate the point I had a meeting several weeks ago with a client contact who is from a global company currently under a global head count freeze. He told me that he has a client that they supply services to that he needs to add another resource on site that they can charge more money for, yes they will make money off it however they are not aloud to hire anyone right now no matter what the argument or business case and so they just have to make do as best they can. Sounds crazy but its happening in a lot of places.

2) Increased competition, only the strong survive.

I was traveling home the other day on the ferry with a good friend of mine from another recruitment firm. One of his comments rang true with me when he said that one bad quarter right now could sink any recruitment company. How true a statement this is. Unlike in the past you had some ability to forecast your revenues to a large extent currently there is no visibility on the future. This means everyone in the recruitment company needs to be focused and pull together to make it through. If you work for a recruitment company then you need to be figuring out how you can add more value, work hard, do more and ask for less back. Letting people go sucks and having done it many times I'm never happy to do it but it is part of business and I can't change the market. Sure it might not seem fear to you but once again it is a reality, get used to it.

3) Recruiters need to revisit their own expectations.

When I first arrived in Hong Kong 9 years ago the base salary package for a recruiter was 40% of what it was in 2008. Salaries/benefits and over all compensation had moved from a base to commission ratio of 30/70 to 60/40. This wage and package inflation was driven in large part by the buoyant economy and lack of experienced recruiters in the market. Well that's all changing and changing quickly. Recruiters, you must understand, you are sales people! Recruitment has always been a commission driven model where you are rewarded on results and delivery not just on showing up and giving good advice.

4) Get real!

Its mayhem out there. There is no such thing as a guaranteed outcome. You will have to work longer, harder, smarter and with more energy and enthusiasm then you have ever done. To top it off you will get more rejection from clients and more calls from candidates than you can possibly handle. This is your new reality, deal with it. If you used to do 50 client calls a day to fill your pipeline now you need to do 100. You control your own destiny and failure to realize YOU are both the problem and the solution will lead to your own failure.

5) Its always a cycle

Sure this is a cycle, the global economy will survive. Sure it may look very different but it will come back at some point. Recruiters need to understand that you will be measured by how good you are at the worst time in the cycle not the best. This is the market to shine. The old saying is "you are only as good as you are at your weakest moment". Nothing could be more true of the challenges we face now.

Using a recruiter in this market, are you crazy!

I talk with a lot of people any given week about recruitment and admittedly in today's market more and more people think that the role of the recruiter is dying or dead. Many clients have the perception that the need for professional recruiters is low due to high unemployment. The reality is you need a great recruiter in any market.


Here's why. Let's say for example that unemployment is at 10% (currently Hong Kong is about 4% officially but probably likely to e 6% in the near future). That means that there are still 90% of people in the market who are employed. Now let's assume further that of those 90% about 20% are really active. These are the people who are on the jobboards everyday desperately trying to find an opportunity better than their current job. Let's further assume that another 20% of people out there are 'passive' job seekers. These are people who on occassion are looking but they are not desperate to leave their company, they are interested in new opportunities but they don't much if any of their day looking at jobs but occassionaly glance at the Classifieds. So this means that there would still be 40% of the people in the market that are not either Unemployed, Active or Passive who are NOT ACTIVE. Just imagine that's 4 out of every 10 people in the workforce who aren't even thinking about trying to find a new job. (Refer picture above)


My comment to the company who says, I'll just post this on Monster.com or JobsDB.com is always the same. Mr/s Client go ahead, post it online if you want to see the best of the unemployed or underqualified because their is a 40% chance that the candidate you want is not going to even know you were looking! I hear you say well touching 60% of the market is pretty good odds... hmm, doesn't sound too compelling to me.


A recruiter is your best option in any market. There job is to find you the best person for the job, not the best available person or unemployed person but pure and simple the best person. Now it is unrealistic to expect a recruiter to be able to reach all 100% of the market however even if they are able to reach out to 20% of the NOT ACTIVE market you will have increased your odds of getting the best talent. In a market where times are more challenging don't you want the best people. Typically the best people at their jobs aren't looking or even considering leaving their company. They are happy in their job and their employer looks after them because they are very good at what they do. A talented recruiter will know how to reach out to this segment of the market and position your company with the right people, they will sell your business and the opportunity, thats what they do. Added to that in today's market asking people to leave a secure position to join a new company is exceptionally challenging. People don't want to be the last one on and first one off, you will need a professional to help manage this process.


So Mr/s client next time you think about just asking HR to put an advert online just remember that there is a >40% chance that golden candidate you are looking to hire doesn't even know your hiring. Improve your odds engage a professional, the results of the right hire far out weigh the costs of using a professional.

Dumbing down your resume?

I was watching an interesting news clip on CNNMoney.com about how as unemployment is on the rise a lot of people are having to apply for jobs for which they are "overqualified" and as a result they need to "dumb" down their resume to give themselves a chance at getting interviewed.

Whilst I can understand the logic to an extent I think there are two perspectives to consider here. 1) is from the unemployed candidate and 2) the Employers.

Let's start with the Employer First;

What are the concerns Employers have with hiring "over qualified" people?

My experience has taught me that the majority of employers whilst they love the idea of what is often referred to as an employee DNA upgrade they often don't take advantage of the market for several reasons.

a) Will this person really want to do the job, or just do it for now because the employment market is bad? If you step into the shoes of the Employer this really isn't an unreasonable perspective. Everyone wants to hire people who will enjoy their job and take pride in it, not just do it because their is nothing better to do. My advice to an employer in this situation is to make the job bigger if you can, leverage off the persons skills to improve the role and what it can deliver. However I do agree that in a lot of cases it sounds good and should be logical to hire the best you can but it can come with problems in managing people's expectations on job satisfaction. In this situation the Employer really needs to spend time assessing the personality and attitude of the candidate. Focus on candidates who have a history of taking pride in the task or job, usually this profile is fixated on doing what ever they do well irrespective of the task.

b) I can't pay them what their old job paid and as soon as the market improves they will go somewhere that pays them better? You need to be realistic and you can't blame people for wanting to earn more money but you might be surprised to find out just how loyal people can be. The vast majority of the human race feels obliged to people who help them when they need help. Its not uncommon to see employees say "the company gave me an opportunity when it was tough and I owe them". This is works to a point. If you have a highly over qualified employee and they can find better work and better pay then people will leave. However use this market to use these higher qualified staff to download their experience to your other employees. Give your less qualified employees a chance to learn and grow by being surrounded by better qualified people. Upgrade your DNA through IP/experience transfer from the more experienced person, think of it as a cheap training opportunity for your staff.

Now from the perspective of the Candidate or Unemployed:

a) Dumbing down your CV: Now dumbing down your resume might actually help in some respects and your audience definitely has to be taken into account. If you have an audience with the CEO then that's not a good idea. If it is going through an HR/Recruiter then you might need to tailor your CV for the situation. Now don't lie, just frame your CV for your audience. Let me give you an example; Let's say you are applying for a job as an HR Manager and you have previously been an HR Director. You have to forward your CV to HR for review. Now be fair, if you were the HR Director would you been keen to bring on a 'peer' or maybe even someone more qualified than you? What happens if the CEO finds out that the person applying is better at the HR Director job than the current Director? You have a very common issue which is most time people struggle to recommend people who are equal to them or more qualified for a job below them. Its human nature and just something we need to accept. As a candidate you need to ask your recruiter to clarify whom there relationship is with? Ideally your CV needs to go to the person above the person who will be your direct manager to have a shot if you are applying to a role where you are over qualified.

b) Highlight how you can transfer knowledge and experience: Your over qualified and you need to help the potential employer understand why it will not be a risk for them to hire you. By highlighting your ability to share your knowledge and experience, train up younger or less experienced staff will go a long way to easing concerns employers have about you jumping ship at the first chance.

c) Show some loyalty; OK so someone gives you a job. Sure they don't expect you to stay forever but at least do the decent thing and stay for a committed period. Maybe when you take the job do it as a fixed to term contract so you have an nice way out. The employer knows your going to go when the markets better (unless they make it worth your while to stay) but remember in their mind they are taking a risk by hiring you, don't make them regret it. Unfortunately in Asia I've found this to be a huge issue so please all you over qualified employees looking for work show some integrity and if you have to leave earlier than expected because a better opportunity came along give plenty of notice and be mature about your exit.

Unemployment Wave Theory

I've been developing this theory for some time and I'm calling it unemployment wave theory. Whilst I'm sure it there are significant cracks in the logic, I'm confident there is some basis to what I'm saying based on my experience. Hard data however is yet to be gathered to back up my opinion. I'll get to that later.

Picture for a moment the waves coming into shore, one after the other. Now image that the first wave is unemployment going from 4% to 6%. Contray to common belief by many in the market this would mean that there is a sudden flux of exceptional candidates in the market. True there are good people coming onto the market; there always are, however lets be brutally honest, 90% of those being let go when the market goes from 3-4% to 6% are not the mission critical employees, they are the ones you want to have when your business is booming (3-4% is arguably the margin of error in unemployment and would almost certainly mean full employment and as of the writing of this blog unemployment in HK is about 4%). Now this is not meant to be offensive to anyone who has just lost their job because there are people currently who are vitims of bad circumstances and bad luck, investment bankers being a prime example.

Employers need to understand that whilst there is a in flow of more candidates onto the market this does not mean that they represent the exceptional talent they maybe seeking. Sure there will be good ones but most employers want the "superstars" however the reality is that the superstars aren't on the market, they never are unemployed, thats why they are superstars!

When you hit the first wave, you have good people but not superstars coming onto the market. This doesn't mean there is not a lot of great talent out there but in a time when companies only want to hire the best due to the economic downturn hiring managers need to understand that just because unemployment is on the rise doesn't mean its going to be easier to hire a superstar.

Second wave is when we go from 6-8%; Now things are going to change a bit in this wave as this is when you start to see companies having to let go of some of their best talent. Typically smaller businesses are the biggest hit in this wave as they don't have the financial power of the large MNC's and as a result the people that drive these businesses are forced back onto the employment market. This is the point at which you can say as an employer that there should be a lot of good talent on the market and you'll be right but once again employers understand superstars aren't on the market in vast numbers, good talent is now in the market.

Third wave is when unemployment goes above 8%. If my memory serves me correctly during SARS in 2003 unemployment went to about 8.6%. Now this is truly an employers market, this is where you really have a chance to look at a much broader and more qualified group of candidates. There will be a lot of exceptional talent on the market and arguably a great time for companies to look at upgrading their own DNA for higher calibre candidates. However once again SUPERSTARS aren't actively looking and probably still aren't part of this group.

So I hear you asking "when are the superstars coming onto the market?". Well the bad news for you the employer is; they're not! Sure there will be a few that will come onto the market due to factors beyond their control. e.g. Company closes operations, changes business model but thats going to be only a few. This is why I never fear my industry will go out of business (the recruitment/search industry) is because I know the best people are never really looking, they don't need too. They are so good at what they do they are getting approached and they are doing well where they are so they are not insecure nor are they actively looking. They are the play makers the people that are the life blood of their respective companies. Their current employers treat them well, pay them well, reward them openly and keep them happy. So for all employers out there looking for SUPERSTARS I hate to break the misconception but the reality is if you want a superstar you're going to have to hunt them out.

If your looking for good talent in vast numbers then you'll need to wait for >8% unemployment but I would argue that unemployment going to >8% is not something your company wants either. So bottom line is that you can't kid yourself into thinking that superstars are easy to hire in this market. In my experience all these cycles do is adjust people's expectations on compensation, benefits and entitlements.