RSSIssue 8:1 – Monday, January 1, 2007
www.vetjobs.com
The VetJobs Early Eagle is for member employers, recruiters, friends and supporters of VetJobs.
VetJobs is exclusively sponsored and partially owned by the Veterans of Foreign Wars of the United States. VetJobs is the only job board endorsed by the Vietnam Veterans of America.
This month’s Early Eagle is sponsored by: TECHEXPO Top Secret
Contents:
1. Message from the Top
2. Secretary of Defense Employer Support Freedom Awards
3. National Guard and Reserve Mobilized as of December 13, 2006
4. Significant Events this Month in Military History
Thank you for reading the VetJobs Early Eagle employer newsletter. If you like this newsletter and what VetJobs and the VFW do to assist veterans and their family members find employment, please go to www.weddles.com/recruitpoll.cfm and vote VetJobs for the WEDDLE’s User’s Choice Award.
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1. Message from the Top
As we move into 2007, I and the staff of VetJobs want to thank all the employers who have helped to make VetJobs the leading military related job board on the Internet! VetJobs, in conjunction with the Veterans of Foreign Wars, is now in its eighth year of service to employers who want to reach the military candidate market, which includes transitioning military, veterans and their family members. We look forward to continuing to serve you throughout the coming year. VetJobs could not have reached this pinnacle without your support!
I predict that 2007 will be a banner year for candidates seeking employment, but a tough year for employers as we move further into a tight labor market. As I predicted last January, the employment economy is now a candidate’s (seller’s) market. I am hearing employers complaining about labor shortages throughout the United States and in nearly every work discipline. The employers who are going to be successful in 2007 are those that will make efficient use of the Internet and develop an employment brand. Employment branding is NOT the same as a marketing brand. Through effective use of employment branding strategies, employers will differentiate themselves from other employers and be the company of choice for which to work.
But to understand where the American economy is going in 2007, let’s take a quick look at where the economy is today.
Financially the United States has seen a good year. The stock market was especially strong in the second half of the year which saw the Dow Jones Industrial Average break through 12,000 for the first time in its history. Overall, the Dow industrials posted its best year since 2003, gaining 16% by the end of 2006. The advance by the blue-chip average this year topped the 0.61% loss of 2005 and the 3.15% gain of 2004. The Standard & Poor’s 500-stock index finished up 14% in 2006. The NASDAQ Composite Index finished up 9.5%. Such straight and unwavering upward moves by the market in all three market indexes are rare. As the Wall Street Journal pointed out on Saturday, over the last 111 years, the Dow has averaged a 1.2% decline each September. Historically, October has served up four of the five worst trading days since 1950, including the 22.6% decline on October 19, 1987. The fact that stocks did not run into the fall’s usual troubles suggest to analysts and investors that the market has a lot of underlying strength. This market strength will continue into 2007.
Helping the market are other favorable economic indicators. After suffering the worst decline in 15 years, new home sales are recovering. Economists believe sales are edging up to reverse last month’s decline of 3.2 percent. Energy prices retreated, making consumers more willing to spend. Falling fuel bills also reduced operating costs for companies which lead to earnings for companies in the S&P 500 to top analysts’ expectations. The Christmas holiday spending at big box stores was up 6% and shopping on the Internet was up a whopping 26%!
This is incredibly positive news which not unsurprisingly the national mainstream media has ignored. The media has barraged us with misleading and gloomy stories taunting stagnant wages, claiming a growing income gap between rich and poor, the disappearing middle class, and rising poverty in America. The reality is quite the opposite.
Reinforcing the positive economic data is the current unemployment report. The national unemployment rate in November was 4.5%. The Midwest registered the highest unemployment rate among the four regions at 4.8%. The South and West recorded the lowest rates at 4.4% each, followed closely by the Northeast, at 4.5%. With normal unemployment now considered to be 5.0 percent, the United States is in a serious labor shortage situation. Trades craft employees (carpenters, plumbers, HVAC, welders, etc) are in critical demand nationwide. College graduates are seeing the strongest demand in six years and are being offered record starting salaries.
All this good news is not to say that there are not people who are having problems. Following every recession since the Great Depression, there has always been an adjustment period where employees have to change skill sets to meet market demand. When I first went into the labor market back in the 1960s, I can remember employment applications asking if you knew how to type and could you operate a ten key calculator. Today, it is expected that you can not only type, but operate Word, Access, Excel and PowerPoint. Those who can not are functionally illiterate in this economy.
My labor force predictions from last year for the most part have come true. They were
1. Labor shortages will become very acute and painful for companies.
2. Competition for qualified workers by employers will intensify.
3. Labor shortages will force employers to seek non-traditional employees.
4. Employers will make greater use the Internet for recruiting.
5. There will be a greater acceptance of flexible work by employers.
6. Employers will put greater emphasis on employee training and retention.
7. Job hopping will accelerate in the first half of the year.
8. Retirement as we know it will change.
9. Sending some jobs off-shore will continue, but more jobs will be coming to the United States.
10. Out-sourcing of jobs from union states to non-union states will continue.
11. The immigrant labor issue will have to be resolved to keep the United States competitive.
12. Political correctness and EEOC policies will have to change to retain employees.
13. Employers will become increasingly dissatisfied with public schools.
Not all employers are on the training wagon yet. The immigrant labor issue has yet to be resolved and was a contributing reason many politicians lost their elections. But the rest are very much in place.
With this data as background, here are my baker’s dozen labor force predictions for 2007. These are not rank ordered as each of them is important to various communities in their own way. Some apply to candidates, others to employers. But all affect the labor market!
1. Retention for employers will become issue number one
With job hopping at an all time high, employers are putting more focus on retaining current employees. Enlightened employers now realize that the number one reason people leave a company is due to the way they are treated by their immediate supervisor. Training for supervisors and managers will become a hot item over the next few years. In fact, employees at all levels will be expected to participate in more training. More employers will require this investment in self-development for the mutual benefit of both parties. Part of the rationale for this increasing investment is employers, in a tight labor market, inability to find candidates with the right experience, so they will have to train the employees to the skills needed by the employer. There is a growing awareness of the high cost of employee turnover, and employers worldwide will seek innovative approaches to retention.
2. Job hopping will continue to accelerate
Fueled by increasing job creation and the fact that United States has become a sellers’ market in labor, dissatisfied workers worldwide with a wider variety of choices will choose to leave their employers in greater numbers. Particularly, younger workers will feel less attached to their employers and have the confidence to jump to another job.
3. Successful companies will continue to layoff employees
Layoffs are just a factor in the economic cycle, and they will continue. Historically, as industries mature, less labor is needed to gain the same productivity. Information Technology improvements have lead to a shrinking workforce since system automation substantially lowers labor requirements while increasing productivity. Some estimates say that enterprises transformed by the Internet are 60 percent likely to have 30 percent fewer workers by 2010. Employers are increasingly applying new technologies to increase profits. Examples of this trend include the adoptions of self-check-out in supermarkets and self-check-in at hotels and airports. The flip side to this issue is the development and implementation of these new technologies will require more highly skilled people. Better Internet technology is why this holiday season has seen a big shift in spending from stores to the Internet.
4. More employees will be working from home
With the improvements in the Internet, it is now easier for people to work from home, especially in the services industries. A sales person no longer has to work from a defined office space.
5. Recruiting is being transformed by the Internet
The traditional methods of recruiting are being seriously challenged by the Internet. 2007 will see continued growth in companies establishing offshore based recruiting support functions, either through their own, existing offshore service centers or to outsourced partners with offshore operations (or both), made possible by the Internet. Keep in mind that this is not just about labor-cost arbitrage anymore nor does it eliminate jobs or the need for a high performing recruiting function at home in the United States. It’s about the war for talent and having the ability to tap resources world wide to find employees.
And employers have finally got the message about the use of Internet niche job boards, something candidates knew several years ago. A recruiter will find it easier to go through a few dozen resumes from a targeted niche site than through thousands of resumes from a comprehensive site whose resumes do not meet the needs of the recruiter. With more sophisticated tracking offered by niche sites, employers changed their behavior to the targeted niche sites that offered quality. It is interesting to note that at the same time employers are making better use of the Internet for recruiting, the Department of Labor has decided to shut down the operation of its job board, America’s Job Bank.
6. The new political environment will affect the labor market
The Democrats are back, and so are liberal leaning ideas. The election will have a very real effect on companies; some will be positive, others will be negative. OFCCP regulations promise to be a Sarbanes-Oxley type nightmare for human resource professionals. Green products and communications are more powerful than ever, and recruiting for politically and environmentally unpopular companies may become more difficult. Executive compensation and pay fairness in general is strongly on the political radar. It will be interesting to see if the new Congress can fix the immigration mess. And the increase in the minimum wage by 42% will have a major impact on the ability of many small employers to stay in business. It will definitely be interesting to see what happens when Congress gets back to work in 2007!
7. Older workers will be more highly valued
Following on this issue from last year, older workers will be in higher demand as the baby boomers move into retirement. Public and private sector employers are facing labor shortages and they want to retain the intellectual capital that their older workers have from being in the workforce. Older workers offer stability and maturity not found in many younger workers. Thus, more employers will offer flexible work arrangements to these and other workers. This flexibility will include phased retirement, part-time work, and seasonal work, at a significant premium in salary, with a benefits package that makes it worthwhile to keep working. Employers will allocate more recruiting funds to researching their exposure and develop relationships with this older demographic.
8. The Importance of recruitment ad agencies will grow
Five years ago recruitment ad agencies were few and far between. Today, they are a necessary and very effective part of the recruiting process for many employers. With employers demanding more quality as well as a larger portfolio of job boards, the use of employment ad agencies grew in 2006. These agencies offer an employer the research on the best options among the 40,000 job boards. Agencies also save their clients time, a precious commodity during a tight labor market.
9. The use of business intelligence for recruiting will come into its own
The use of intelligence tools that used to be used only by governments and militaries are now moving into the private sector for finding candidates. The Internet itself was a development born from military and intelligence agencies needs. Smart employers will engage leading edge firms to provide business intelligence that will help them make better hiring and salary decisions. Organizations like the Society of Competitive Intelligence Professionals (www.scip.org) will be called on to assist human resource departments. Making use of data provided by organizations that offer valued analysis of Internet recruiting like WEDDLE’s (www.weddles.com) will be a necessity if a company is to be successful.
10. Offshoring and reverse-offshoring will continue
As predicted last year, this trend is not going away. Employers in developed countries will continue to send work to less-developed countries for cost savings. As one study pointed out, only 1.5 million jobs were off-shored from ALL the developed countries. Peter Drucker pointed out that for every low wage, low skill job the United States off-shored, the country imported two high wage, high skill jobs. It is fascinating to now watch China off-shoring jobs because their wages and standard of living has improved. This is a repeat of what happened in Japan in the 1960s and 1970s and in Europe during the 1800s. It is a natural economic cycle. Work that is sensitive to customer satisfaction, involves cross-cultural communication, or is technical with a need for quality or creativity is returning to the United States as companies have learned that not everything can be off-shored. And many companies had to learn the hard way that copyright and trade secret laws are not enforceable in many third world countries. Companies in India and elsewhere will engage in reverse-offshoring, hiring and training U.S. graduates in other countries at foreign local scale.
11. Out-sourcing of jobs from union states to non-union states will continue
Thanks to the union movement of the late 1800s and early 1900s, the United States has one of the finest work environments in the world. The problem is everything the unions fought for is now law. And the unions of today do not have a real purpose. In spite of the strength of the market, union states like Michigan and Ohio are having problems attracting jobs and getting investment due to the perception of union work rules. If you are investing in a company and want maximum productivity from your employees, you can not get the productivity with the current environment in union states. This was brought home in Indiana this past year when the state legislature voted to change the state from a union-shop state to a right-to-work state. The vote is what brought a new Toyota plant to Indiana which will ultimately create 21,000 new jobs! Note that the new automotive plants built in the last fifteen years have been in Alabama, South Carolina and Tennessee, not in Michigan, Ohio and Pennsylvania where the older plants and automotive labor existed. It is axiomatic that companies will put their jobs where they can get the best productivity, and that is in the right-to-work states.
12. The use of Internet networking sites will expand
Candidates are now looking for corporate profiles on sites like MySpace, Jobster, ZoomInfo and LinkedIn and use their presence (or absence) as an indicator of how good an organization may be. If the company has a profile, it follows that the company might be a good place to work. The U.S. Marine Corps has a profile and the profile definitely had an impact in meeting its recruiting goals this past year. Individuals are also creating their own recruiting-oriented profiles, in effect online resumes for recruiters to search. These networking sites are becoming portals to connect with friends, to share ideas and communicate, to set up collaborative work spaces, to meet new people, and to look for employers. While there has been a lot of hype about these sites, their business model in terms of making money is still evolving. Time will tell if this approach will be successful.
And finally, to borrow from The Herman Group, Neal Boortz, Rush Limbaugh and repeating from last year:
13. Employers are increasingly dissatisfied with public schools
Managers are increasingly frustrated with the low level of preparation of the entry level workforce coming out of our public school system. As a result, corporate executives are demanding greater performance from public schools and technical, community, and four-year colleges. Local leaders will have to focus more resources on improving local education in order to improve tomorrow’s workforce. It is disappointing that high school graduates can not read properly, write a letter, do basic math or received any training in history. A great strength of the American economy has been its educational system. But political correctness, combined with school boards more interested in pushing religion than education, school boards having to fight unnecessary ACLU suits and having to deal with unfunded federal mandates, have brought our educational system to an all time low. The public primary and secondary education system has to be improved if America is to maintain a strong economy.
At the end of the year we will have fun seeing how many of these predictions are true. As discussed above, the employers who will be the winners in 2007 will develop solid employment brands and make efficient use of the Internet.
On January 15 the country celebrates Martin Luther King Day. And Happy Birthday to the United States Coast Guard! It was on January 28, 1915, when President Wilson signed the Act that established the United States Coast Guard. The Coast Guard has been an important player in maintaining the freedoms of the United States over the last 91 years and is a vital player in the current War on Terrorism. So when you meet a member of the Coast Guard this month, say Happy Birthday!
As always, if there is anything we at VetJobs can do for you, please do not hesitate to call or email.
And remember, Freedom Is Never Free – Support Our Armed Forces and Veterans!
Best regards,
Ted Daywalt
President
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2. Secretary of Defense Employer Support Freedom Awards
The Secretary of Defense Employer Support Freedom Award is the highest recognition given to employers for their support of their employees who also serve in the National Guard and Reserve. Nominations must come from a Guard or Reserve member who is employed by the organization they are nominating, or a family member of the same. The Freedom Award was instituted in 1996 by Secretary of Defense William Perry. The National Committee for Employer Support of the Guard and Reserve (ESGR), the lead Department of Defense agency for gaining employer support, is charged with planning, coordinating and executing this program. The award was created to publicly recognize employers who provide exceptional support to their employees who serve in the National Guard and Reserve. The award is the highest in a series of ESGR awards that include the Patriot Award, the Above and Beyond Award, and the Pro Patria Award. Nominations for the 2007 award will be accepted from Jan. 8, 2007 to 8 a.m. EST March 1, 2007. A thorough selection process will take into consideration specific support provided by an employer, including pay policies, benefits and leave policies, previous ESGR awards, supervisor training, ESGR advocacy, service member recognition, family support, deployed member support, hiring preferences, and general military support.
This process will culminate at a formal awards ceremony in the fall to recognize up to 15 award recipients. For more information, please visit www.esgr.mil.
3. National Guard and Reserve Mobilized as of December 13, 2006
Total number currently on active duty in support of the partial mobilization for the Army National Guard and Army Reserve is 77,099; Navy Reserve, 4,938; Air National Guard and Air Force Reserve, 5,741; Marine Corps Reserve, 5,716; and the Coast Guard Reserve, 363. This brings the total National Guard and Reserve personnel, who have been mobilized, to 93,857, including both units and individual augmentees. A cumulative roster of all National Guard and Reserve personnel, who are currently mobilized, can be found at http://www.defenselink.mil/news/Dec2006/d20061213ngr.pdf .
4. Significant Events this Month in Military History
1777 – General George Washington defeats the British led by British General Lord Charles Cornwallis, at Princeton, New Jersey (War of Independence)
1911 – Naval Lieutenant Eugene Ely became the first man ever to land an airplane on the deck of a ship, the converted cruiser USS Pennsylvania, in San Francisco Bay.
1915 – Congress established the United States Coast Guard.
1923 – American occupation forces, stationed in Germany since the close of World War I, were recalled.
1942 – U.S. and Filipino troops complete their withdrawal to a new defensive line along the base of the Bataan peninsula (World War II)
1944 – Allies Land at Anzio, Italy (World War II)
1945 – The Battle of the Bulge ended (World War II)
1951 – Chinese communist forces captured Seoul, Korea, from United Nations troops (Korean War)
1951 – Operation Thunderbolt began (Korean War)
1959 – Fidel Castro took control of Cuba.
1966 – American forces move into the Mekong Delta for the first time (Vietnam War)
1967 – Operation Cedar Falls began against the Communist-held Iron Triangle area north of Saigon (Vietnam War)
1968 – Battle of Khe Sanh began (Vietnam War)
1968 – Tet Offensive began (Vietnam War)
1968 – Battle of Hue began (Vietnam War)
1973 – Signing of the Vietnam Peace Accord (Vietnam War)
1991 – Allies start Operation Desert Storm with attacks on Iraq.
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