GLOBAL SOURCING CHALLENGES AND SOLUTIONS
Predictions for 2011 and beyond

Looking at the trends now, there’s likely to be a steadier economy and increased hiring. The improvement in the market is glad tidings for employers and employees alike, but can carry a potential downside, particularly for companies. According to CNNMoney.com, 84% of employed people are planning on seeking a new job in 2011. The upheaval and expense of a mass exodus can be circumvented by careful assessment, planning, and proactive steps in the recruiting and retention areas.

There is a current and increasing shortage of highly qualified, highly skilled workers. According to ERE.net, more than 60% of U.S. jobs are high pay/high skill, requiring 97 million people, of which we currently have 45 million qualified people. By 2020, 74% of U.S. jobs will be high pay/high skill, needing 123 million people, of which we will have only 50 million qualified people. By 2020, almost three-quarters of U.S. jobs will be high pay/high skill, needing over 100 million people, of which we will have only half of that amount of qualified people.

Flexibility will increasingly be required of both the workforce and companies. While regular, full-time hiring (although sporadic) will be on the upswing with the growth in the economy, companies will be also be hiring an unprecedented number of contractors on a project basis with specific timelines. Managing a dramatically expanded number of consultants effectively—and often remotely—requires a different skills set than that of “traditional management.”

The recruiting landscape has changed rapidly. For example, 50% of positions are now sourced through social media, with that percentage projected to grow. To thrive, companies will need to be responsive and conduct recruiting in an efficient, well-planned manner that focuses on both immediate and long-term needs. It’s quite common for companies to hire reactively on the basis of a position vacancy but this strategy can be costly and only intermittently aligns talent acquisition with the broader needs of the company.

Here are a few of our recommendations:

• Quantify the exact costs—direct as well as hidden costs—of the hiring process.
• Assess what you really need rather than focusing on job descriptions and history.
• Implement recruiting efficiency practices to lower costs while improving quality of hires.
• End reactive hiring—hiring that is based predominantly on position turnover alone.
• Evaluate both immediate and long-term talent needs to ensure judicious decisions.
• To achieve optimal results, assign a dedicated person to managing social media recruiting rather than adding it to the HR manager’s role.
• Directly link talent acquisition and retention with the company’s business plan and mission.

For further information, please contact me directly at 484-904-7500.

Marcia O’Connor
CEO, The O’Connor Group

An increase in PMI bodes well for the economy and employment. Learn about how it can affect your hiring strategies.

The Purchasing Managers Index (PMI) is an important indicator of the health of the U.S. economy. Did you know it is also a predictor of trends in the U.S. job market as it relates to sourcing and recruiting qualified job candidates?

What is the PMI?
The PMI is an economic growth indicator based on a monthly survey by the Institute for Supply Management (ISM) of 400 purchasing managers in diverse industries nationwide. These industry survey participants can respond with “better,” “the same” or “worse.” Each indicator is given a weight, and from the survey responses a composite index, the PMI, is calculated. The PMI can range from 0 to 100; an index of 50 or higher indicates an expansion in the general economy, while an index below 50 indicates a contraction.

How the PMI relates to the job market
Like the PMI, the unemployment rate is also an indicator of the health of the economy, but it is considered a “lagging indicator.” Unemployment occurs after the start of economic decline and continues to rise for a time after economic recovery begins. In other words, the PMI will start to show improvement before the unemployment rate follows suit.

This seems to be the current situation in the United States. While the PMI has recently shown a gradual improvement, the unemployment rate has reached staggering highs. Though still extremely high, the U.S. unemployment rate dropped to 9.4% last month, its lowest level in 19 months. More people found jobs, while simultaneously some people gave up on their job searches. The U.S. Office of Management and Budget (OMB) projects that unemployment will further slow in 2011 and continue in that trend through 2014. Thus the improved PMI seems to indicate a delayed yet inevitable decrease in the unemployment rate. This in turn serves as a looking glass into the near future for human capital management. As consumer confidence grows with the PMI, there will be a higher job turnover rate; people won’t be as hesitant to leave their jobs in search of better positions at higher pay. Talent acquisition teams will be needed to fill open positions, and companies will look to third party human resource outsourcing organizations to provide these and other human resource services efficiently and cost effectively. The key is to conduct talent acquisition in a way that aligns with the immediate and long-term needs and mission of the company and advances progress toward goals.

We can help you craft human capital management strategies that facilitate achievement of bottom-line growth goals. Learn more at www.tocgrp.com.

The Institute for Supply Management (ISM) has just issued its Purchasing Managers Index (PMI) for December 2010 in its monthly Report on Business. Here are the details:

• The December PMI registered 57%, a 0.4 % increase over the November PMI and a 17th increase in as many months. A PMI over 50% indicates an expansion in manufacturing.
• The December PMI also marks the 20th consecutive month that the PMI has exceeded 42%, which points toward an expansion in the overall economy.
• The average PMI for January through December (57.3%) corresponds to a 5.1% increase in real gross domestic product (GDP).
• U.S. manufacturing saw a significant recovery in 2010 in the auto, metal, food, machinery, computer and electronics industries. Manufacturers who focus on exporting in 2011 will likely do well because of global demand along with a weak U.S. dollar.

A recent reader poll by Managing Automation corroborates the upward trend of the PMI, indicating that manufacturers are more confident about the economy and plan to increase hiring and technology spending. Beyond the manufacturing sector, these
statistics bode well for the U.S. economy on a whole and should eventually lead to a decrease in the unemployment rate.

Visit ISM’s website view theReport on Businessor click here to read Managing Automation’s reader poll.

Would you like to learn about the future of recruiting? Register for the Southeastern Pennsylvania Society for Human Resource Management’s next monthly breakfast meeting on Tuesday, February 15, 2011. Marcia Zaruba O’Connor, CEO of The O’Connor Group, will address this subject as the event’s keynote speaker. The meeting begins at 8 a.m. with a one-hour networking opportunity, followed by a one-hour speaker presentation. More networking time will follow the presentation. Most monthly meetings qualify for 1 credit toward HRCI recertification. For more information or to register, visit http://www.sepashrm.org/meetings.htm