Bracing for impact: Do hiring managers have a plan for the coming market correction?

Is it here already?  Coming next quarter? Next year?  I’m talking about the inevitable and –so say the economic pundits and talking heads–impending recession, market correction, or economic slowdown (pick your favorite moniker). The laws of economics and the historical business cycles, plus market indicators, say some sort of downturn is coming.  

First, a caveat:  if you believe impending economic doom is a relic of the distant past, please reveal your trusted sources of news and economic data. , Perhaps you are intentionally in denial, simply not paying attention or continuing to buy into the all things must go up philosophy. If you read daily news feeds from sources like CrunchBase and VenturePulse there is not a day that goes by without crowning a new “unicorn” (gosh I do loathe that term). And yes, I would be remiss to not acknowledge that last month, the U.S. added more jobs to the economy, and the unemployment rate hit a 50-year low. Consumer spending continued to remain optimistic, and the Fed is anticipated to make another interest rate cut at the end of the month. The economy, despite continued global uncertainty and the threat of ongoing trade wars, remains resilient.    Not to stereotype, but many younger hiring managers and entrepreneurs (read millennials) are still hyper bullish on the near- and long-term market outlook. Ah yes, the benefits of optimistic, blissful youth!   I would love to be wrong; I hope you are all right; and I wish all of you the best. 

But, it’s not just today’s 24/7 news cycle– talk long and hard enough about recession, and perhaps it will eventually happen (“See, I told you!”)–creating a self-fulfilling prophecy of an economic correction. Real economic downturns happen, and they will again.

I’m old…enough.  I’m old enough to have lived through, and survived, the early 2000s dot.com bust, and the debt-driven macro-economic collapse of 2008-09, which wasn’t that long ago. Further back, though I was not in the workforce, I do remember the stock market crash of 1987.  But I’m also young enough to remember how, during all three economic downturns, most companies reacted to the news; some by responding in more proactive and measured ways than others. Many, especially in 2008-2009, took the “crash” as opportunity, especially when it came to capturing market share when other companies were bleeding. 

So, for those (old, young, or feeling either way), who do believe we are due or overdue for some choppy economic waters, let’s proceed. To carry forward with the metaphor, it really doesn’t matter if we face a full-fledged economic tsunami or a few bumpy white caps. 

The question we at Ursus ask of our clients, namely our hiring managers, is are you are ready for it?  Or better yet, do you and your company have a plan in place that will guide your response to harsher economic conditions? Riding out a (by nature) indefinite period of macro-economic pain and hoping/waiting for the pain to go away, does not count as a plan.  Hiring managers should start to plan and think ahead and prepare regardless of the impact and severity of the economic downturn. There are options and alternatives to the knee jerk slash, burn and cut to reduce headcount, which is what too many companies do when they have failed to plan ahead.

Now, what to actually do?  I know a coach, who coincidentally happens to work in finance, who is constantly reminding his players about the five P’s: Prior Planning Prevents Poor Performance.  This adage is true; in sports, in school, really in any aspect of life, but these precepts also should apply to planning a hiring manager’s human capital strategy in the face of an impending business slowdown. 

Based on our working relationships with hundreds of business leaders and hiring managers, regardless of company size, we recommend that hiring managers implement the “five Ps” as follows: 

  • Model worse and best-case scenarios
    • Take the time to run projections. What percentage rate slowdown necessitates preemptive reduction in force (RIF)? If you do RIF what is the impact to top line productivity and bottom-line cost?
  • Ask yourself the tough questions
    • What key performance indicators will provide your headlight data to put a plan into action before the company is in fact reactive, rather than prepared and proactive? The decision-making process, starting with choosing to focus on the most useful indicators, should be reasoned, not reactive; careful, not capricious. 
  • Stack rank 
    • If you do have a RIF, who can you afford to keep or worse who can you afford to let go?
  • Contractor v Full Time v Human Cloud resource?
    • Full time employee costs include burden (payroll taxes, benefits, pensions). Is there a path to replace full time employees with contractors without sacrificing quality or production? 
    • Do your contracted employees need to be on site, or can you leverage human cloud workforce options from remote locations?
  • Hire now before you lose budget?
    • If there are considerable layoffs in the relevant vertical market, is this an opportunity to hire talent that you may not have been able to during a tighter and more competitive labor market?
    • With the opportunity for previously unavailable talent, can you grow market share while competitors that failed to plan are caught flat footed?

Implementing the Five “P”s – Prior Planning Prevents Poor Performance—while competitors delay can never hurt, and is a worthy exercise, even if you believe sunny economic times will persist for years to come.  Wouldn’t you rather be the leader and the company who is prepared, ready with an existing plan that you can both present to executive management and communicate rapidly to the workforce, rather than the one caught off guard and frantically reacting? 

We can’t predict the timing or depth of the next recession. But we can predict that if, as a hiring manager, you don’t have a business staffing plan that is ready to respond to economic pain, you may be one of the first to feel it.

Management’s Obligation to The Millennial Workforce

year, the Millennial generation represents the largest percentage of the workforce. With each new generation, those of us who came before them are quick to define, judge, and even dismiss those who follow them into the workplace. As a twenty-something entering the workforce in the early nineties, I certainly remember reading about and hearing many of the condescending remarks hurled at me by my Generation X brethren.  I took a defensive posture, vividly recalling conversations with peers who were as committed as I was to proving the “older generations” wrong in their judgment of our work ethic, our identity, and “new” ways of doing things.  As if often the case, history repeats itself.  Now I find myself as one of the older guys trying to make sense of the Millennial generation.

Let’s start with the positives Millennials bring forward.  This generation brings with them a new perception of office life (open workspace versus cubes), work-life (flex schedules and telecommuting versus set hours and mandatory office attendance), and work habits. Regarding the latter, is it rude to multi-task in a meeting or has the millennial mindset evolved to process information more effectively or differently?  The millennial generation blazed the path for some of the awesome, new macro-economic trends that are quickly becoming the norm, most notably the rapid rise of the shared economy à la Uber and Airbnb.  As a card-carrying member of Gen X, I LOVE these changes.  Whether you like it or not, many of these trends will stick around since, by 2030, our workforce will be 75% Millennial.

So, that’s the good stuff. What about negative responses to the Millennial generation?  I hear plenty of folks of my era, as well as those a decade younger (Gen Y) and a decade older (Baby Boomers) bemoan the perception that Millennials lack real work ethic, are entitled, and grew up with the belief that everyone deserves a medal.  These ideals extrapolated into the workplace must mean that everyone deserves, or maybe more accurately, is entitled to higher pay, loftier titles, and bigger chunks of equity and flexibility. In short, Millennials have been labeled a ‘soft generation’ by some.  As a manager, I’ve seen this behavior first-hand more than a few times, especially working with technical candidates looking for contract and full-time employment through Ursus.  You can’t make up some of the requests we’ve received from candidates. To date, my all-time favorite is the candidate who insisted upon being compensated for commuting…and nap time.

My reflexive reaction to this sort of behavior is to pass judgment and move on. “Millennials are too lazy, too entitled, and Vape-smoking, Pokemon-Go playing brats!”  But when I step back and appreciate that, like any new generation, elders almost always consider themselves tougher, stronger, more resourceful save for perhaps The Greatest Generation who fought WWII. The fact is that this newly-minted workforce has had minimal corporate work experience, let alone real-world life experience.  Thus, the obligation to guide, direct and instruct on the values associated with hard work, workplace respect, earning the right to advance, and other key values that apply to all generations falls upon those who came before them.  In other words, managers like us!

How should we respond? Younger workers seemed to be motivated differently than previous generations; there are some work approaches that will surely be different from other generations of employees, but surprisingly, many of these differences might not be as drastic as some might think. Yes, this generation requires understanding, but it doesn’t mean all previous understandings of employee management must be thrown out the window. As the most collaborative and inclusive generation to date, these young adults expect their workplace to embrace the same idealism and values they hold so dear.  Creating an environment that aligns with the participation economy will be employers’ greatest opportunity to create a company where Millennials not only want to work, but seek out as a top professional opportunity to grow his or her career.

Redefine what “manage” means to you and your employee.  Millennials have been managed all their lives. Playdates, sports, music and school activities from early on often drove childhood, with the adults in their lives striving to ensure that their kids’ time and focus were used wisely. Perhaps it’s this prior experience with the concept of management that makes Millennials difficult to wrangle, as this generation often craves opportunities to make their own decisions instead of having them made for them.
So how does a manager respond to this need for independence, in response to a lifetime of conditioning?  In short, we lead Millennials instead of managing them. Gone are the days of micromanaging how employees work, where they work, what they wear, what they can say, who is free to approach leadership in the hierarchy, and mind-numbing communication red tape – i.e. the “Aahh, now, are you going to go ahead and have those TPS reports for us this afternoon?” Research shows that the number one reason Millennials are likely to leave their current job is because of their boss. Creating an environment where Millennial employees feel supported, valued, encouraged, while also receiving direction from leadership leads to increased productivity and valuable relationships over the long term.

Millennials are looking for leaders, which translates into leading companies as well as leading managers. According to a recent Deloitte study on managers, millennials place greater loyalty in managers who focus on employee well-being, growth, and development, instead of those who control the work experience of each employee. These respondents believe that “an organization’s treatment of its employees is the most important consideration when deciding if (the organization) is a leader.”  Simply put, Millennials are looking for leaders who care about people. The first take away on managing Millennials in the workplace is to stop trying to manage them, and just learn how to lead them.  My suggestions is to resist the sometimes overwhelming urge to judge or dismiss, looking at your side of the street first. Then, take the responsibility of what it means to be a manager and just lead. Impacts will be felt in the workforce and society at large.

Software Defined Infrastructure Adoption- It’s All All About the People

(San Francisco) – Compliments of our partners at Silver-Peak, I attended the first West Coast edition of the Open Networking User Group (ONUG), held at Intuit HQ in Mountain View. Well done @nicklippis and his team for putting together yet another quality event. After two days of panel discussions, case study showcases, and speaking to various vendors and clients on the show floor, I continued to hear the same lament from attendees; why adoption of new technologies has taken longer than the typical technology adoption curve. The same anecdotal stories that I remember hearing when I first joined Embrane to head their global field operations effort three years ago were mostly alive and well. Of these, my favorite: “You can’t expect a network engineer who has lived in a CLI world for decades to all of sudden know how to or want to write code.”

And why is that? Marcia Savage wrote a great piece this week (‘The Bumpy Road to Software Infrastructure’) citing numerous industry thought leaders, including a few clients, such as Jim Younan at UBS, Joe Ferrell, CTO at GE, Lane Patterson at Yahoo, and Pablo Espinoza, Director of Engineering at Intuit. They all cited the need for a “culture and mindset shift” within a given IT organization. Seems obvious, right? But who really owns this mandate / responsibility within an organization, or, better yet, within the greater industry? To borrow from one of my favorite mentors: “Whose self-worth and compensation are tied to seeing this project succeed?”

Answer: the responsibility and onus for shift change unequivocally lies with companies adopting the technology and/or the companies selling it to them. But, it also goes beyond buyer and seller, to the broader IT community. We simply can’t afford to wait for the next generation of technical talent to enter the workforce. Just because the existing talent base has trouble spelling API and remembers the days when memory, storage and computers cost hundreds of dollars, not pennies, doesn’t mean that they can’t evolve or adapt. Similarly, not every network engineer is privileged to be working on the SDN POC or attend working group sessions at ONUG. Where do these folks go for help?

And that was my ONUG epiphany. I’m almost embarrassed by it now, as it seems so obvious to me that Ursus, as an IT Staffing and Solutions provider, not only has 1) an obligation to the greater good of the industry (corny but still true), but also 2) an enormous opportunity to lead from the front with sponsored training, career development and guidance, helping our candidates successfully make this critical shift change. In fact, we’re already doing this; we see hiring and project trends at a broader scale than any candidate possibly could, so the team shares this information while providing guidance and resources beyond their own companies’ abilities, helping them navigate their way through this evolutionary period. We hear and answer these questions daily: “How do my current skill sets and work history translate, given new technologies? What steps should I take at my current or new company to strategically map my career path, ending up where I want to be? What companies are aggressively pursuing next generation vendors and are also committed to investment in continuing education and training? Fortunately, answering these questions for candidates and hiring managers is the cornerstone of the Ursus brand experience. .

Look for Ursus updates as we work to accelerate this market evolution. Bottom line, we’re in the people business and so we see it as our responsibility – as well as a great opportunity and good for all players in the market – to contribute our energy, dedication and enthusiasm to this culture + mindset shift. We can absolutely do more. I’m in. Are you?

Negotiating with Cockroaches and Unicorns

(San Francisco) – The last few years were all about the Unicorns; startup technology companies that had a reached a billion dollar or more “valuation.” Yes, I’m using quotation marks as I know I’m one of many who question the generally accepted “valuation” system. A system that values a company at $1B or more one month and then, but a few months later, that same company files for bankruptcy warrants skepticism. But I digress. I’m a huge fan of the Unicorn movement. Fast-paced growth is great for business, and it presents a seller’s market for candidates. There’s no better case study to support how great the market has been than Haseeb Qureshi .

If you’ve not heard of Haseeb, he is the former professional poker player turned app developer who, after completing a three-month intensive coding course, managed to negotiate a quarter million-dollar compensation package with a leading Unicorn. Well done, Haseeb! I suppose congratulations are also in order for the hiring manager at AirBNB who deemed this hire important enough to justify the spend. Trust me, I get it. I understand it. Unicorn companies were – and many still are – in an arms race for top talent. The competition for quality developers (“A” and “B” talent remember?) is fierce and the directive from investors has been to hire for hyper-growth. A quality candidate with decent negotiating skills has been commanding, and in some cases demanding, top dollar. It’s been frothy for a while, but I believe market conditions are shifting to a place where these types of scenarios will occur with less frequency, if at all.

Enter the age of the Cockroach! A Cockroach (credit to Flickr founder Caterina Fake who most recently referenced or resurrected this term in a September 2015 blog post) is what the pundits refer to as a company that builds slowly and steadily from inception, maintaining a watchful eye on revenue, profit and most importantly spending to ensure it can weather any future market conditions. The Cockroach movement is also bringing about significant shifts / changes in the hiring process, forcing hiring manager and candidate to recalibrate.

Scru·ti·ny ˈskro͞otnē/ noun critical observation or examination

In the Cockroach Age, a new level of scrutiny now applies to hiring manager and candidate alike. As a result, the hiring process slows down a bit. Hiring managers still must move quickly, but not hastily. This deeper examination ensures the candidate is not only fully vetted for their skill sets, but has the intangibles to operate in an environment where employees are expected to be cognizant of operational discipline, market conditions and their place within the company, supporting broader goals.

The candidate must respond to this level of scrutiny (side note: this is the way companies and candidates should always strive to vet one another. Sadly, and to one or both parties’ detriment, they often don’t; by taking the time to prepare for the interview process and/or doing the appropriate research. If a candidate is truly serious about an opportunity, then, at a minimum, he or she should walk into an interview with a deeper understanding of the company’s product set, history, competitors, executives and the hiring manager(s) they will be meeting. They should be able to articulate, and often demonstrate, their skills, prior work experience, and how they translate to the position in question. Anything less than this is completely unacceptable. If you, as a candidate, aren’t willing to invest that level of effort, you shouldn’t bother applying for the position; you waste your time and worst, you waste others’ time. Assisting our candidates with in-depth interview preparation is where my Ursus team shines, devoting considerable time and effort working one-on-one with candidates. In some cases, this extra effort often determines whether or not we will continue working with a candidate, presenting him or her to a hiring manager; if we don’t sense a deeper commitment or an elevated ability post coaching, the odds that the candidate will be able to so for a discerning hiring manager are slim at best.

Ursus Insight: Layoffs and Rehires

It’s happening now and the trend will continue as the correction cycle continues. Unicorns TwitterZenefits and Groupon are all recent examples of Unicorn carnage that’s occurred within the last six months. Obviously, this is about spending reduction but the underlying drivers behind the layoffs are two-fold. In the Unicorn-Age companies that hire at an aggressive pace typically overstaff and even worse, create jobs that may or may not be core to the business. When you’re on a hiring spree, you don’t think twice about saying ‘yes’ to “wouldn’t it be nice if we had (fill in the blank here) to do this job?” Fast forward to the Cockroach-Age. These same hiring managers, now forced to manage to budget look to trim fat first and there’s no quicker way to reduce burn than to reduce headcount.

Reduction in staff is normal in any business cycle, but be cautious. All too often when companies are reducing staff, they throw out the proverbial ‘baby with the bathwater.’ Definitely cut the fat but if there are hard decisions to be made regarding whether or not mission critical / key personnel can still remain with the company, there are options. Ursus specializes in the outsourcing of contractors to our Portfolio Companies. The end result is a reduction in spend as the burden of taxes and benefits shifts from the client to us, with a modest mark-up while still being significantly less than the cost of full-time employees. This represents an opportunity for the hiring manager to effectively renegotiate or, better yet, restructure payment structures with his or her employees, often at a similar pay rate but with reduced impact on the company bottom line. Employees win. Manager wins. Everyone moves into their happy place and The Grind continues. The Cockroach age might not be so bad after all!

The Fallacy of the all “A” Player Team

(San Francisco) – NBA Playoff Basketball. It’s that time of year and the Golden State Warriors, darlings of the Bay Area, are favored to repeat as world champions. It’s no surprise that, regardless of who you talk to, the die-hard basketball aficionado the or the casual fan who likes to follow a winner, the talk usually starts and focuses on the superstars; Steph CurryDraymond Green and Klay Thompson. They are the “A” players and rightfully deserving of the spotlight. But any good coach – or even the stars themselves – will be quick to point out that basketball is a team game, and without the role players, i.e. second team, “B” team players, (call them what you want), there is no way they could ever compete for a championship.

History can point to countless examples where an attempt to assemble a team entirely of superstars failed. It may look good on paper, but rarely in practice. Why is that? As is always the case, people are complicated. Groups of people more so. But the primary answer is that teams of people, whether a basketball team or company, need leaders and followers, superstars and roll players. An all “A” team assembly more often than not leads to conflict, ego-clash and a constant fight for dominance. There are so many adages that apply to this concept: “There is only one ball to shoot.” “You can’t have too many chiefs and not enough Indians.”, and so on.

This applies to sports and to business. As an IT Staffing and Services firm, we hear the same proclamation every day, “I only want to hire ‘A’ talent.” This narrow hiring requirement results in a lack of team diversity in technical, cultural and performance background. Is it really productive, let alone even realistic, for every company to have only “A” players? Of course not! There isn’t enough “A” talent available and the best of the bunch typically want to only work for those companies with the most caché, upside, comp and benefits.   This is especially true in the Bay Area where the competition for top talent is fierce!

Like or don’t like? Thumbs up or down? “A” player or not? We’ve been conditioned to become a binary decision making culture. The middle ground, and the talent that lives there, seems to no longer be viable and that’s a problem. I’ve read plenty of articles that proclaim a “B” player “Does some things well, but not fully self-sufficient, and not consistently strong while an ‘A’ player is Fully self-sufficient and takes initiative that positively impacts the company.” I would challenge that this “B” player definition needs revision. While a “B” worker may not have dramatic impact on the company, they absolutely are capable of significant contribution as well as potential to evolve into “A” player talent. The work force is replete with bright, hungry, motivated individuals who may not necessarily have come from best pedigree; socio-economic situation, best college or best, previous work environment. But when placed in the right job environment with strong and supportive management, career development and interaction with top “A” talent, “B” players will rise to the occasion. And as their career development happens, they will absolutely contribute in a meaningful, dramatic way.

Imagine as a manager you only have the option to assign “A” players to a project or deal. Who gets assigned to what without alienating the rest of the team? For example: the VP of engineering has deemed that “Project X” is the most important in the entire company and she only wants “A” players to work on said project. What if her entire team is comprised of “A” players? Someone gets left out, right? Certainly, there are important, maybe not as important, but important projects that will benefit the company, but if everyone believes they are an “A” guy or gal and then they arent’ assigned to “Project X”, what results? Hello resentment, infighting and – worst of all – attrition!

Let me be clear. I understand why hiring managers strive for an all “A” player team. Why wouldn’t you always want “the best”? As the CEO of Ursus, I want the best talent for my company, too. But, I also realize there are many different roles and skill sets required to build a team that works well as a unit. We try to impress the same message upon our clients. Aim high (Steph Curry, Draymond Green) but also recognize that the role player, the “B” player, the “not necessarily the top producer but rock solid contributor that pulls significant cycles that yield meaningful results” (Shaun Livingston, Festus Ezeli) are critical to the overall success of your team and your company.

Recruiting: Powerfully Connecting Online and Offline Communities

Timing. It’s one of the most important variables when matching a talented IT candidate to the best job opening. When the proverbial planets align, and the right candidate and right job opening are both available, how do you ensure having the right tools to reach them and for them to reach us?”

URSUS leverages several online and social media platforms, including strategic job posting services, LinkedIn, Facebook, Twitter and other online communities where we position and promote our latest job opportunities; we’re constantly reviewing, culling and organizing candidate resumes and updates to ensure we’re in touch and ready to move when the right moment comes. But with the myriad of job information available to candidates, especially in an IT market where talent might seem to have more leverage than hiring managers, (although the pendulum is shifting. Watch this space for future comment), how do you really cut through the noise?

As important as automated and self-service tools may be, URSUS believes there’s no better way to counter digital signal to noise than by the personal, real-world touch. It could be as simple as an extra phone call or meeting for coffee or a drink. Or, better yet, our weekly or monthly event produced by us and/or our partners, allowing us to directly interact with candidates. The latter, real-world platform is where we shine, providing real value in the form of content, (in the form of best practices or trends for candidates and hiring managers), contract brokering, and keeping things real beyond electronic mediums. Of course, it’s a challenge to execute these events at scale, but the investment is worthwhile for our customers, and most importantly, for our candidates.

Since our inception last summer, URSUS has hosted informal, monthly breakfasts for our candidates, hiring managers and partners. No sales pitches, no formal agenda, just an opportunity to come together, catch up, compare notes and touch base. Offline, human interaction within a community. This month, we’ve expanded the invitation to our new friends at WeWork. As new members, we’re taking the opportunity to get to know our new neighbors a bit better and introduce them to the powerful, real-world community we bring with us. We hope you’ll join us for ‘brunch’ at WeWork Transbay on Thursday April 7th. More information about the event here or email us at [email protected] for more information. See you then!

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A New Approach to IT Staffing

In a recent Staffing Industry Analysts’ Buyer Survey  buyers who purchased IT Staffing services were asked to name the most important criteria when selecting a staffing firm.  Half of respondents said “Worker Quality” was the most important criteria when selecting a firm. When the question was posed a bit differently and buyers were asked to name the top three criteria.  Again, 78% of respondents cited “Worker Quality” as one of the top three things look for when working with a staffing firm.

The article covering this survey goes on to explore the disconnect between IT Staffing firms marketing efforts and mapping to the needs of the buyer.  Only 18% speak to Worker Quality in their marketing materials.  But is that the real take away from a survey like this or does the issue go deeper?  Frankly, I think the issue hits at a major issue in the industry itself that, as a hiring manager for fifteen years, always drove me nuts!  How you find, match and deliver candidates to hiring managers, in other words your process, is just as important as the end result. In other words, if your process stinks your worker quality will suffer as a result. Maybe not in the short term, but if you want to develop a long-term relationship with both client and candidate the “simple things” are imperative:

  • Listening to client needs
  • Taking the time develop, collaboratively with your client, accurate and detailed job specifications
  • Communicating! Return phone calls, return emails, and proactively update the client on status- good news and not as good news. Don’t hide behind email!!

These are just a few examples. Seems like pretty common sense stuff right? Yet so many staffing firms take the basics for granted especially in a bull market where “unicorns” are in vogue and startups want to show you their office space before their product or service.

Ok, so let’s say your firm executes on the basics listed above. Then what? What makes your firm different than the rest?  Well, we at Ursus believe that the next generation workforce, the millennials, want to engage differently. They want to interact, not just with staffing firm and the clients they represent, but each other….to compare notes and best practices, to refer and share and be rewarded for referring and sharing, to create and share their own content, be counted and measured against their peer groups.  A richer, more interactive experience is expected whether you are playing a game on your phone or searching for your next career move.

Enter Ursus IT Staffing, a next generation staffing firm built on tried and true operational discipline PLUS the best tools, services and communication vehicles that the next generation workforce deems as status quo in any user experience.

What do you think? Let us know @ursusinc