Archive for the ‘In the News’ Category
Consider the following management scenario: you’re the leader of a highly successful team, but one that has recently had to tighten its belt financially. While you are committed to training and building success long-term future, your current reputation and success rests heavily on one or two key members. And one of them just announced that he wants to leave.
Worse, he’s come out and criticized the organization publicly, stating that the fiscal constraints have hampered your organization’s ability to attract the top talent it needs to ensure a successful future—and he isn’t prepared to waste his time at any organization that isn’t meeting his level of ambition.
(Privately, you suspect that his real concern with “fiscal restraint” is much closer to home: despite being your highest-paid employee, he knows he could make more elsewhere.)
So what do you do?
Those with even a passing acquaintance with the world of English soccer may have recognized that the above scenario bears more than a little resemblance to a situation that played itself out in the public eye last week: the Wayne Rooney contract saga.
For those unfamiliar, Rooney–pictured left–is the star player at Manchester United. At the start of this season, he was pulling in a salary of around 90,000 pounds per week, on a contract set to expire in two years. In August, he announced to the club that he wanted to leave at the end of his contract period—and the information became public last week. When pressed to justify his reasoning, Rooney issued a statement that essentially expressed his belief that the club is in terminal decline.
Two days later, he signed a new five-year contract—rumored to double his previous salary—with United manager Sir Alex Ferguson praising Rooney because “he has accepted the challenge to guide the younger players and establish himself as one of United’s great players. It shows character and belief in what we stand for.”
PR spin aside, the saga reflects just how dangerous it can be for any organization to become too reliant on a handful of key operators. Whatever happens for Rooney now, he has damaged both his own and his team’s brand—and while he has secured a better deal for himself, nothing else he mentioned has changed. The club that he believed to be in decline—in part because they can’t afford to match the astronomical salaries being paid elsewhere—is actually in a less competitive position now that they’ve tied up a much more significant portion of their revenue in his wages than before.
There are many who believe that the management at Manchester United did the right thing under the circumstances. But there are some cases where retaining your top talent is less important than upholding the values of your organization. This should have been one of them. Quite apart from the fact that the deal agreed with Rooney is enough to pay at least two high-caliber players, management has now set up a situation where other players may feel emboldened to do the same
There’s an old cliché in sport that says that no one player is bigger than the team. In this case, that has proved that to be untrue. Whether the fix pays off in the short term or not, it’s hard to escape the notion that it sets up a situation in the long term where the club is regarded as something of a cash cow for top talent, rather than an organization known for its excellence. And once you’ve got to the point where the only incentive you can offer is financial reward, you really are in trouble.
–Phil Stott, Vault.com
It started quietly. Rumors of ominous portent spread through the office, spoken in solemn whispers. But you paid no heed. You just kept on working.
The first to go was one of the IT staff. Then another went missing. An executive left with nary a word. One accountant bolted for the door, desperately muttering something about “Grad School.” All that was left were a few dusty outlines on their desks, and some stale, half-eaten cake.
Suddenly, scores of people disappeared. All around you, one after another, coworkers were summoned away from their desks and were gone. A few emerged only for moments, visibly despondent as they tearfully clung to one another, and then never to be seen again.
Now you’re alone. Much of your department has vanished. And, worst of all, you’re saddled with their workload…
The years since 2008’s economic meltdown have been taxing and, at times, bleak for professionals. For those who kept their jobs, the realities of the “Great Recession” meant watching others lose their jobs, taking up overwhelming responsibilities, and facing a discouraging possibility that there may be no end in sight. It can seem like you’ve survived an atomic blast.
But, if you’ve studied thoroughly in preparation for these apocalyptic times, then you know there are ways to survive, even get by comfortably. Here are a few “End of the World” strategies you can apply at work.
Where the living envy the dead
The greatest blow has been to morale. After all, we lost our friends, our neighbors, our collaborators, our happy hour companions. And while the value of your work may have spared you from layoffs, you were perhaps left questioning if your career was still worth it.
Experts call it “Layoff Survivor’s Guilt.” For companies that suffered heavy cuts, human resources departments reported declining company loyalty and esteem. Job stress has since been on the rise, and so too has a sense of inability and remorse.
It’s up to employers to preserve unity amongst remaining staff. Following layoff rounds, employees should demand open communication from leadership about the state of the company and the road ahead. Group activities are also vital to rebuilding camaraderie; for instance, managers can organize outings to roam the desolate streets and scavenge for dry Post-Its and trophies in the abandoned offices of felled competitors. (Remember to wear your radiation suits!)
And for those who regret having survived while others got the ax: Fallen friends are still friends. Stay in touch via Facebook and LinkedIn, maintain contact, and remember them when news of an opening crosses your desk. You can benefit as well—the unemployed are always the first to know about free cupcakes and discounted manicures.
(As a point of etiquette, avoid griping to them about work—you risk prompting bitter retorts of “At least you have a job …” Or perhaps they’ll have gone cannibal, and hunt you for your delicious, employable flesh.)
“I had so much time…”
On the other hand, some less sociable professionals might welcome the solitude and peace of mind. Like an idyllic beginning of a Twilight Zone episode, just before the ironic twist. Now that all the chit-chat is over, you can go about your work undisturbed.
But not so fast. Without the others, management expects to “do more with less.” The “less” being you, laboring a whole lot more.
Should the increased workload prove too much, take a stand. Make it known that doing the work of two—even three or four!—people should mean being compensated accordingly. Were this truly a post-apocalyptic hellscape, it might entail increased food and gas rations; in reality, it’s worth perhaps a 6 to 8 percent salary hike.
If that can’t be done, or if the promise of greater pay won’t ease the burden, then remember that companies are still hiring. Even with a ratio of 4.6 workers competing for every one job, you have an advantage (albeit an unfair one): You’re a survivor. Employers give greater value to applicants who kept their heads above water throughout the last years’ tumult; some outright shun unemployed candidates like infected mutant hordes.
Of course, these are just a couple of the scenarios to be explored. In the spirit of Halloween, we encourage Vault readers to join in. In the comments below, tell us some of the “apocalyptic” circumstances you’ve encountered since the recession. We’ll mention the best ones on our Facebook page!
— Alex Tuttle, Vault.com
There is a phenomenon in leadership, known as the “Reality Distortion Field.” The term describes a level of charismatic self-assurance so overwhelming and nigh delusional that no criticism can penetrate it, and those in its path are powerless to withstand the hype.
In this sphere, any ambition is attainable, every idea a masterpiece and any setback a negligible distraction. Such overconfidence might seem absurd on paper, but in practice it is embraced as an exceptional quality. But not everyone can get ahead simply by putting perception in a chokehold.
The term’s origin should come as no surprise: Apple drones coined it in the early 1980s to illustrate the belligerent influence of Steve Jobs. “In his presence,” as one minion put it, “reality is malleable. He can convince anyone of practically anything.” If complex tasks were scheduled in an unrealistic time frame, Jobs deemed it eminently doable; should evidence show Steve was wrong, he bent the facts to prove himself right.
Over time, claims of “Reality Distortion” have been applied to other Silicon Valley honchos. Apple’s chief rival, Microsoft CEO Steve Ballmer, is most notable for displays of boundless, sweaty confidence that somehow captivate industry audiences. So too is Larry Ellison, who has recently taken to harshly doling out unsolicited criticism of peers in the press (who willingly take his word as gospel).
Given their collective achievements, one might think that there’s something to the obstinate approach. In truth, they serve as outliers. Without true knowledge and ability, a cocksure leader is a liability.
Recall LifeLock CEO Todd Davis: So sure was he of his company’s identity theft protection system, Davis freely listed his social security number in television and print ads. Certainly some employees must have expressed misgivings about such a bold claim, yet Davis laid down the gauntlet. As a result, his identity was stolen thirteen times, embarrassing the company and leaving a shameful trail of fraudulent debt in his wake.
Davis assumed his confidence would carry the product. But while leaders should inspire faith, the “Reality Distortion” mindset goes a step further—even an inkling of doubt signifies weakness. This is seen in the political arena, where candidates attract slurs like “flip-flopper” over slight shifts in policy. Some contenders will stick to a line in the hope they can alter voter perceptions, no matter the risk of being caught, or the cost to their credibility.
New York gubernatorial candidate Carl Paladino is one such stubborn figure, campaigning on a “kitchen sink strategy” of persistent accusations against his opponent, Andrew Cuomo. When Paladino claimed to know of marital infidelities by Cuomo, the press asked for proof. He belligerently demurred, until eventually admitting that his allegation was hypothetical and had no substance—only to resume the lie in subsequent television appearances. For his arrogant zeal, Paladino’s prospects are on the decline. Recent polls show him trailing Cuomo, with the gap ever widening as Election Day approaches.
Leading through sheer force of overbearing will also carries a particularly undesirable side-effect: Volatility. Intimidation and abuse rank high as motivation for staff to fall in step with one’s ineffable vision, and screaming tantrums are not unheard of in these environments. Steve Jobs is himself given to rages that drive some to the verge of tears, and drive down the happiness index in Cupertino.
In his 2007 book The No Asshole Rule, author Robert Sutton deems Jobs’ effectiveness as an exception to the eponymous rule, yet acknowledges the Apple leader’s reputation for humiliating staff. Sutton otherwise promotes a prevailing wisdom that puts employee satisfaction first: Happy workers are productive and creative workers, while abuse drives up employee turnover (and potential lawsuits).
As much as budding leaders may wish to become a Jobs or Ellison, it’s not their hubris that should be emulated. Whether you attribute it to a unique confluence of factors or simply uncanny mutant powers, success didn’t come from their willfulness alone. Ultimately, they possessed intelligence and skill. Blustering may get you through the door, but ability is what builds great computers, great products and great companies.
— Alex Tuttle, Vault.com
The recession ended in June 2009. Did you notice? Chances are you probably didn’t—especially if you’ve been looking for a job. The bad news: things aren’t likely to get much better any time soon; current economic growth rates mean the unemployment rate will do well to drop by much more than a single percentage point by the end of 2011.
All of that is likely to continue reshaping the employment market, and will affect everything from your ability to conduct a salary negotiation to the pace at which you can expect to climb the ladder—or even get on it in the first place.
So what’s a job seeker to do? Vault’s industry and career experts put their heads together and identified a number of key trends that will affect careerists over both the short and medium term.
1. Doing more with less
In season five of the brilliant HBO series “The Wire,” the tight-belted, high-waisted head of the fictionalized Baltimore Sun declares, upon announcing a paper-wide job cut, that “we will simply have to do more with less.” It’s a quote that could serve as a template of companies both large and small in the post-recession era. After sacking thousands of employees in order to cuts costs, pummeling employee morale in the process, managers focusing on the bottom line will be hesitant to hire more bodies in order to explore more avenues of business, even when profits begin to pick up. Instead, they’ll simply turn to their existing employees, put a cool hand on their shoulders, smile, and ask them to take on increased duties.
2. Held back by housing
The recession may have ended in June 2009, but a little over a year later, The National Association of Realtors reported sales of previously occupied homes plummeted 27 percent in July 2010, the worst showing in 15 years. So, despite the good news, unemployed job seekers struggling to pay their mortgage still have fewer options for their job search. For them, it’s either find a job where they live or accept a job elsewhere, relocate and add on the extra expense of paying rent while they wait for their home to sell.
3. Choose your education carefully
It’s a truth universally acknowledged that applications to school surge during a recession. There are no jobs, so why not get more training and make yourself a better candidate when there are jobs? Makes sense, right? In the past two years, prospective students applied to graduate schools in droves; particularly to law, business and health services degrees. While health care is one of the fastest growing industries and will likely be able to handle the influx of new graduates, the law, finance and consulting industries will not. It’s unlikely, however, that this will deter prospective students from applying this fall—and next.
4. Age diversity
An aging workforce is going to continue to be a big challenge for employers, who increasingly prefer to cut costs on training for new positions. Compounding this is the fact that people are delaying retirement because of the recession. While gender and racial discrimination will remain critical concerns, age diversity presents a new challenge for the corporate world.
5. The finance industry
Don’t let the National Bureau of Economic Research fool you. Although GDP might have hit bottom more than a year ago, and we’re technically in an expanding economy, the US still looks very recession-like to the record numbers of men and women out of work, as well as to those still employed. And nowhere does the immediate outlook worse than in finance.
Hedge funds are currently experiencing their worse year on record, collectively growing assets by a mere 1.7 percent thus far in 2010; and Merrill Lynch recently estimated that as many as 20 percent of hedge funds could shutter by the first quarter 2011. Meanwhile, following deep job cuts in 2008, investment banks started to hire again in 2009. But now with markets ice cold—and predicted to stay that way at least until 2011—firms might be significantly cutting back again. Bank of America, for one, is in the midst of 1a large job cut, reportedly sacking 5 percent of its capital markets staff, and some analysts believe that other banks, afraid of the cooling markets, if not a double dip, might not be too far behind.
6. The legal sector
In the legal sector, 2009 saw a dramatic drop in hiring—a trend that has continued into 2010, with entry-level hiring not likely to return to pre-recession levels any time soon. Law firms have adopted a variety of solutions to maintain a smaller, more efficient workforce. Many of these solutions will likely survive beyond the recession, and affect law firm infrastructure, professional development, compensation and recruitment.
In addition to cost-cutting moves like the consolidation and relocation of back-office functions, other measures include a shift from traditional lock-step salary structures toward performance-based compensation systems. Many firms now offer alternative, non-partnership career tracks or have established apprenticeships for new lawyers. On the recruiting side, behavioral interviewing techniques are gaining popularity as a means of identifying candidates who will, in the words of one law firm hiring partner, “be able to deliver client service on day one.”
7. More short term jobs
The recession might be over, but unemployment figures have remained the same. This has forced Americans to look at jobs differently, with many accepting temporary and part-time positions rather than holding out for full-time permanent work. That’s helped the underemployment rate to remain sky-high—it’s currently over 18 percent—and there are no signs of it changing anytime soon: retailers are expected to hire up to 650,000 temporary workers this holiday season.
Toys R Us is an example of a company that is going even further: it plans to open 350 temporary “Holiday Express” stores by early October, creating 1,000 temporary retail positions. Other temporary positions are expected to become available during the holiday season. But when those temporary positions end, the unemployment rate will go right back to where it was before they were created.
8. The IT consolidation trend
The initials “IT” and “M&A” already go together like cereal and milk. And with spending on hardware, software and IT services expected to hit $3.5 trillion next year, the major players in the field have lots of incentives to keep adding to their range of offerings. One way they’re doing that is by snapping up smaller firms. Recent examples include HP’s acquisition of 3Par, Intel’s purchase of McAfee and IBM’s takeover of Netezza. But while the rapid pace of consolidation might be a good thing for consumers, waves of tech professionals will likely be squeezed out of Silicon Valley just as quickly.
9. The importance of internships
Because of the shortage of jobs, landing an internship is going to be more important than ever. Despite increased competition, if you’re a college student or looking to break into a new field, they’re an integral part of your next career move.
Starting in high school, students need to cultivate paid or unpaid work experiences that build skills, character, work ethic and resume. Employers use internships to prescreen and hire talent. Your career currency comes down to the following equation: internship experience + skills. Even if only on a volunteer basis for a few hours per week—this is how you get your foot in the door and demonstrate your passion for your field of interest.
10. Negotiate a package, not a salary
While the recession has affected the number of jobs and the kind of compensation on offer, it hasn’t changed how you should approach salary negotiations. However, what you negotiate for might change. While salary increases, stock options and signing bonuses might be in shorter supply, there might be opportunities to for other types of compensation such as at-risk pay based on milestones achieved, paid time-off and a flexible work schedule.
You should value the entire package and quantify everything. How you do that is up to you. Your compensation number should factor in what is essential to you and what is non-essential. You could even give weights to the essential and the non-essential in determining the value of your offer. As an example signing bonus, relocation, 401k match, day care and base salary could get an 80 percent weight while the other 20 percent would fall under extra vacation, nicer title etc. At the end of the day, each person will be different on what they value and what they consider essential.
— The Staff of Vault.com
Let’s start with the big one. The piece of data that would sway the electorate one way or the other in the upcoming elections, determining once and for all which party knows best when it comes to job creation. That’s right: we’re talking the final monthly jobs report prior to the mid-terms. In political punditry, it doesn’t get much more fevered than that—especially when the best you’ve got to on otherwise is speculation over whether one of the candidates happens to be a witch.
As with most regular events that get a fevered build-up (New Year’s, anyone?), the announcement just had to fail to live up to expectations—and it surely did, with the economy leaking just enough jobs to ensure that the overall number came in at an unchanged 9.6 percent. Politically, that’s the worst outcome either party could have hoped for: the failure to get the expected rise to 9.7 percent leaves Republicans without an easy case to make when it comes to accusing Democrats of job-killing policies, while the fact that things haven’t improved means the Democrats can’t claim to have figured out anything approaching a solution either.
(Incidentally, a recent Vault poll found that the public is more or less aware of that: when asked which party was most likely to make a difference to the unemployment crisis, the number of respondents who plumped for one side or the other came to less than 50 percent combined. That compares to 38 percent who stated that the two parties need to work together, with the remainder suggesting that government should get out of the way altogether and just let business get on with it.)
By far the most interesting employment-related number of the week came from the Pew Economic Policy Group, which found that a record 30 percent of unemployed Americans had been out of work for at least in August. And it gets worse: the technical definition of “long-term unemployed” is someone who’s been out of work for over 6 months. In August, 71 percent of the “long-term unemployed” had been out of work for at least a year—dating their layoffs back to some of the darkest days of the recession. The risk, of course, is that the longer someone is out of work, the harder it is for them to find a new position—especially if the type of job that person did isn’t likely to return. That scenario gave rise to perhaps the most depressing sentence of the week, courtesy of USA Today (emphasis added): ” Many of the long-term unemployed will struggle to find work even after the job market picks up, and some will never work again.”
Things don’t look much rosier when considering the major hiring announcements from the past week, either; notwithstanding the announcement that Kohl’s is hiring 40,000 seasonal workers, any other significant announcements of new opportunities tended to be in overseas markets.
It’s unlikely that we’ll see much improvement in the job market before the elections take place at the end of the month, but at least there’s one thing to be thankful for: the attempted politicization of the unemployment number should die down, at least for the foreseeable future.
Furthering today’s salary statistics, a new study shows that earnings disparities extend beyond just the gender gap—it goes across waistlines as well.
The Wall Street Journal’s Juggle blog reports on a study published in the Journal of Applied Psychology, which indicates a correlation between one’s weight and one’s paycheck. Among separate pools of 12,686 Americans and 11,253 Germans, the study measured subjects’ relative weight and salaries. The findings would seem to mirror the basis for a number of sitcom marriages: Husky men and skinny women pull in the most, while skinny men and heavier women get the shaft.
Seems far-fetched? The numbers don’t lie: In the study from the University of Florida’s Timothy A. Judge, the female respondent group reported that the size of their income was inversely proportionate to their dress size. Women 25 pounds below the median group weight reported markedly higher earnings, to the tune of $15,572 on average. And it gets worse from there:
Women continued to experience a pay penalty as their weight increased above average levels, although a smaller one — presumably because they had already violated social norms for the ideal female appearance. A woman who gained 25 pounds above the average weight earned an average $13,847 less than an average-weight female.
Meanwhile, men are rewarded for packing on the pounds—in moderation, that is. In relation to the group average, skinny men earn $8,437 less. Fitness-oriented males may want to set their new target weight is 207 pounds; at that point, the study finds, men reported the highest average pay. Once they reached obesity, however, the respondents’ salary gains tapered off. Which is a shame, as they could surely use the extra cash for a gym membership.
But before anyone cries foul, remember that there are more factors involved. What the report does not appear to address is the additional variables among respondents; rather, men and women were each gauged as a whole. So how do both males and females specifically fare when matched among those in their age ranges and professional levels? The study, as seen in the Journal, gives no answer.
Furthermore, nothing directly indicates that these pay levels were set at the respondents’ current weight levels. One can gain or lose weight at various points in their careers. Top-earning men may become complacent and let themselves go, while top-earning women may use their professional success as a springboard into increased physical fitness. In the end, it depends on the individual and their circumstances.
However, it clearly raises questions about the relation of weight and physical attractiveness to one’s career. Have you ever been discriminated against due to your weight or body type? We welcome any stories that you have regarding the subject. Comment below, or share your thoughts with us on Twitter, at @VaultCareers.