Friday, October 23, 2009

Small Business Leads Us Back To Prosperity

Analysts report that both Canada and United States will likely reach 10% unemployment rates. These figures are not often seen in recent memory. Both countries always have pockets with high unemployment rates due to a troubled industry. But these are national statistics.

Many employers have asked employees to take a pay cut. Every day we meet candidates who tell us that they are willing to take lower paying positions just to get back to work. When the economy picks up again I suspect many people will leave positions in which they feel underemployed in or underpaid. The million dollar question is when this shift occur?

Many people are working from home after being laid off. Some of these people are making substantially less money than they were when they were employed outside the home. This trend can skew employment statistics. Although these people are employed they may be earning half the salary or less than they did in the past. As a society we need to create more high quality long term jobs to support our families and children in the future.

Governments and provinces need to have a vision and a long term plan. What is going to happen when infrastructure money dries up? Will Ontario’s green jobs programs really create jobs?

We need to take risks. Some risks will work and some will not. Venture capitalists expect only a percentage of their projects to work out. The government needs to create a small business venture capitalist group (not the Business Development Bank). This should be headed by entrepreneurs with real experience and knowledge of what it takes to run a business: SME’s. Together small businesses will create more jobs more quickly than most of the Fortune 500 companies. We still need the big companies to create jobs. But we see that the more agile medium sized companies are doing most of the hiring right now. The larger companies have so many checks and balances in place it is difficult for them to move forward. Big businesses often need to have eight signatures on a single request for a new employee which can take months.

I believe we need to set up “braintrust” groups to offer free advice to new entrepreneurs from successful entrepreneurs. This should be funded by the federal government. Presently the governments are trying to buy our way out of the recession by paying for infrastructure (which is good), but why not put some of that money into helping grow the small and medium sized businesses that are creating jobs now?

We will all benefit by funding small and medium sized businesses in the same way that we support big business.

Sunday, October 18, 2009

Barometer on the Economy

Clients and candidates frequently if we’ve seen any improvement in the economy. The Bank of Canada tells us the economy is recovering. Many economists say the economy is recovering. How do we see it from the front line of the job market?

As an owner of a staffing company I work with small, medium and large businesses in both the public and private sector. This gives me a unique perspective on the economy.
Houses with multiple offers are common in Toronto again, at least in particular neighborhoods. Multiple offers for particular job seekers is happening again as well. Although this is not a frequent trend it is very encouraging. Similar to the housing market people with multiple job offers bring unique skills sets. For example people with functional healthcare knowledge combined with technology skills are highly in demand. iphone developers are also highly in demand at least in the short term. New trends in technology will always generate job openings.

Small and medium size companies are responsible for a small resurgence in the economy. These companies are more nimble and able to accommodate new technologies. The larger companies have more bureaucracy and may be publically traded. This slows down their ability to approve new projects and make decisions.

In the spring of 2010 the economy will make an even stronger come back. This will have a profound on the job market. Many people have stayed in jobs they do not like for the past 18 months. They’ve stayed for security. As the economy surges ahead in 2010 more and more people will be willing to dip their foot into the job market and see what’s out there. This will cause a great deal of turnover within organizations.

Contractors who’ve had their rates slashed by over 20% in some cases will be looking to increase their rates at their present employers or more likely they will be moving onto new contracts. The movement in both contractors and permanent staff will create more opportunities for everybody.

As the economy improves many companies will begin spending some dollars to reopen frozen projects. The combination of permanent staff looking for new positions, contractors looking for new contracts and companies starting new projects will create the perfect storm for the staffing industry.

Key questions: When will this perfect storm take place? As an employer, will you proactively target key staff to keep them in place in preparation for the storm?