Hiring in Washington DC

New clients often ask me why recruiting great people in Washington DC remains stubbornly difficult.   One of my favorite job aggregator sites – Indeed - explains why in a very simple graphic that compares unemployed people relative to job postings.   (9/15/09 Note:  Indeed updated this chart recently).

Washington and Baltimore have 1 job posting for every unemployed person.  This is the best performance of any major city listed.  Other cities,  like New York have a ratio of 2 unemployed people for every job posting.  But poor Detroit comes in last with eighteen unemployed people for every job posting.  

The graphic illustrates that recruiting is essentially a local business.  Hiring difficulty varies widely from city to city.

By the way, it’s also a good reminder, that if you want to hire better people (at least in Washington), you have to write a better job ad.  Something I have been ranting talking about for quite some time.

Stop Thinking About the National Economy

Thinking about the national economy is, by and large, a waste of time (unless you are Ben Bernanke, or Tim Geithner, in which case, please stop reading this blog and get back to work!)

The Brookings Institute suggests we do not have some monolithic national economy, but instead really have an interconnected group of 366 metropolitan economies.   It makes sense, as this is exactly how staffing actually works.  At it’s core, staffing is a local business.  The labor pool, the jobs, the pay, what’s considered a good job, what’s considered a good commute – all this varies widely by region.  Ignore it at your peril.  The national unemployment rate is irrelevant in hiring.  Nurses might be in oversupply in one region and there might be a nursing shortage elsewhere.  Whether you are hiring  20 construction workers in Miami or 2 Mechanical Engineers in DC,  the local  economic situation matters more than the national numbers.  This is why we are seeing a talent migration to Washington DC, which has one of the strongest regional economies in the country.

Every day this week I talked to a local employer who had run ads to find candidates, but still had not found the ideal candidate for an open position.   A strong local economy like DC, can be really irritating if you thought hiring was going to be easy.

Recruiting Myths: Good People Don’t Look for Jobs in a Recession

One of the many reasons I like to blog is to gleefully disagree with conventional wisdom.  I don’t know if “good people don’t look for jobs during a recession” qualifies yet as conventional wisdom, but it does meet my four criteria:  It’s widely repeated, simplistic, unexamined, and outdated.  Therefore you can gain a serious competitive advantage by challenging it.    

In every recession, a few search professionals advance the argument that “top talent does not look for jobs during economic downturns” (so presumably employers need to hire those same search firms to find the “A players”).   The concept is that in a bad market good people with good jobs become risk averse and hunker down – you practically have to dynamite them out of their chairs - and only a silver tongued headhunter with uncommon skill can recruit them away.   The theory is that good people will rarely answer ads, and mediocre recruiters (or what Josh Letourneau hilariously calls  “Big-Box Publicly Traded Candidate-Grinders”) will never be effective.  As with most conventional wisdom, this is all partly true (naturally it’s the part that’s not true that I think about).

Quite a few blog posts have been written about wooing passive candiates in a recession (Look here and here). I’ve heard variations of this argument from people I really respect in the industry (all vaguely implying that “active” candidates are somehow inferior to people who are not looking).     Finally, the cherry on top of the conventional wisdom sundae -  is the advice that you have to a pay a huge salary premium to get someone to “take a risk” on a new job – see “How Much Cash Does it Take to Steal a Passive Candidate?.   Perhaps I’ll revisit the whole “passive candiates are better than active candidates” myth in a future post, but probably not.  It definitely meets my 4 criteria for conventional wisdom – but Ronald Katz already did a brilliant job of eviscerating it in his post “What’s So Great About Passive Candidates.”  (For balance, be sure to read the comments -  the people who disagreed with him also made some decent points).

Ok, so why am I convinced that great people look for jobs in a recession?  Well mainly, because we’re talking to them every day.  Lots of them.  They are migrating to DC in droves. 

Center of Gravity Tips Toward DC

Washington’s power and influence is growing as a direct result of the economic crisis.  And talented people and high paying jobs will surely follow. (See my previous posts about The Great Talent Migration).  

The Washington Post ran an editorial this weekend - ”The Height of Power” – outlining how Washington is emerging as “the undisputed center of national power and influence.”    This is not so much due to our inherent greatness (as much as I love this area)  but rather it is due to the collapse of other centers of power such as New York.  The author points to our region’s well educated workforce, relatively low unemployment, and relatively high household income.  But the real power in Washington right now is the federal government’s power to print money and distribute it.  As the editorial puts it:

“All this is bad news for much of America, but it should mean great business for many residents of greater Washington. . . Office buildings in the District and surrounding environs can now expect a new rush of tenants, both from the private sector and the soon-to-be-expanding federal bureaucracies.”

All month I’ve been talking about the “hiring blitz” at the FDIC, at Treasury, at the State Department, and at the FBI.  And more will surely follow.   Just follow the money.

Where the Jobs Are…NOT

“Green collar” jobs, infrastructure investments, financial bailouts…just exactly where will the new jobs come from?  In the Washington region – where the federal government accounts for almost a third of our total economy - we benefit when when Treasury struggles to fill jobs to support the $700B rescue package,  we benefit when the  FDIC hires 1400 new bank examiners,  and when the State Department adds 1,500 positions, and when the FBI starts its Hiring Blitz.  This is why Dr. Fuller reported at the GMU Economic Conference that our local economy still has a “worker shortage” and is still ”importing” people from other areas to fill our jobs.  I’ve been calling it The Great Talent Migration, and it appears it will only increase in 2009 as massive government spending offsets job declines in other areas like construction.  in 2009, DC is projected to gain high paying jobs, not lose them.

Our search practice is thriving.  Maybe it’s because we get better results for far less money than traditional firms, but mostly it’s because hiring is still a challenge for most organizations.  Across the region we have small firms who are expanding, association clients filling key roles in education, certification, and member services.   We’re filling jobs in marketing, nonprofit development, finance and accounting, IT, and HR.   And more and more of our best candidates are coming from outside the region.

So is the “green revolution” overblown?  Well, it depends what you call a green job.   According to a recent analysis done for the DC Office of Planning, the so called “green collar” jobs are often just the same construction workers who were being laid off  in the downturn.  But I think their survey placed too much emphasis on just the green building movement, and not other green jobs. Commenting on the study findings, GMU economist Stephen Fuller observed that the green jobs thing is “substantially oversold.”   

How to Make the Most of the Economy Right Now

Bob Corlett

Come join me on February 18th when I talk to the Montgomery County Chapter of the Society for Human Resource Management (MC-SHRM).

The topic is “Recruiting in a Recession:  How to make the Most of the Washington Economy Right Now.”  We’ll be talking about what recruting strategies are working best right now and how employers can best take advantage of the current job market conditions.   Since I am the speaker, naturally we’ll be talking about  my favorite topics including:

• Trade-in Time – How you can trade in your mediocre people for better people.
• The Great Talent Migration – Highly qualified people are moving to Washington DC because of our strong job market- so get ‘em while they last.
• Hiring for Performance - How can you raise the bar on  performance expectations with your new hires?
• What the CEO Wants from HR – what kind of conversations should HR be having with senior management right now?

Registration is only $20 for non-members.  Bring me your toughest recruiting challenge, but leave those rotten tomatoes at home - no hecklers please!

Is the Foreign Service Right for You?

Who is hiring right now? The State Department and the United States Agency for International Development (USAID), that’s who.  The State department wants to add 1,500 positions this year, but are you cut out for the Foreign Service?  Take their online quiz to find out.  (Here are two thought provoking questions from the quiz:  “Would you enjoy spending 2/3 of the next 20 years living overseas?”  or “Are you willing to repeatedly get people out of problems they got themselves into?”)

The New York Times recently reported that Senator Clinton has also been pushing for more resources to help the State Department more effectively deal with reconstruction in Afghanistan and Iraq, and play a larger role in speeding the recovery from the global economic crisis.

In a recent survey, BusinessWeek found that the State Department was rated one of the five most desirable employers among undergraduate students, ranked even higher than the Peace Corps.

I do love news articles about employers hiring in Washington DC . . . don’t you?

Washington Has Confidence in the Economy

The Greater Washington Board of Trade just released a survey of  consumer confidence.  They did the survey in early December, a week after the recession was officially declared.   Many analysts believe consumer confidence is one of the most important economic predictors.  The result?

Consumers in the Greater Washington region are nearly five times more positive about our regional economy than they are about the national economy. 

• 77% of workers expect to keep their current job during the next six months.
• 14% of workers expect a promotion in the next six months.
• Only 3% of workers expect to lose their job in the next six months.
• 83% of self employed people expect their income to stay the same or go up in the next six months.

That’s some real confidence, and with good reason.  Our regional economy is one of the strongest in the country, and people are moving here to take advantage of it. 

If you want to stop worrying and get the facts, join me on January 13th at the GMU 17th Annual Economic Conference.  I already paid my fifty bucks to hear Stephen Fuller, Steven Pearlstein, John McClain and Alex Orfinger tell me  when this recession will be over.

Just let me know if you are coming, so we can sit together at the optimists table ok?

The Recession Survival Guide – It’s “Trade-In” Time

Ok, we’re in a recession - it’s official.  So fear and panic are evident in decision-making and mostly we see people frozen in place.  Waiting to see what happens.  And not driving results.

Do you know who in your organization will get you through the downturn?  Look around.  Your top performers are still driving results, taking on new responsibilities, trying new things, improving your current processes, cutting expenses, suggesting new ideas, challenging outdated thinking, doing work on their own time, solving problems and accepting the reality of the current market without making excuses. Anybody not doing this is just wasting your salary budget.

Sadly, most performance review systems don’t really identify the people you need most, because what it took to succeed last year is not necessarily what it takes to succeed right now.   In these turbulent times, you might need more people in one department and less in another, or you might suddenly need people with very different skills.  There is nothing like a downturn to shine a bright light on your mediocre people.   So if you can’t tell who to keep and who to cut, you might be tempted to follow the herd and implement a hiring freeze, or just be sluggish in hiring (which has the same effect).   Except here is the problem.  A hiring freeze locks in place your mediocre performers and prevents any better people from getting in.    Big mistake.  

This is the time to freeze the budget, but not the people.  It’s “Trade-In Time” – when you can finally afford to replace your underperformers with winners. 

Thankfully, This is Not 1929…or 1982

These are uneasy times, but far from catastrophic.  Newsweek provides some valuable perspective on this.  In a recent article, they outline a few key points to keep in mind:

• Many economists expect this recession to end sometime in the summer of 2009, not go on for 43 months like the Great Depression. 
• National unemployment in this recession is likely to peak at about 7.6 percent, not even remotely close to the 25% of the Great Depression, and nowhere near the 11% from 1982.  

Unemployment in the DC suburbs is currently running about 3.5% right now (about 7% in DC, and just over 4% overall).  At the Annual President’s Forum of Metro-Washington, the keynote speaker, GMU economist Stephen Fuller, told me he expects unemployment in this region could still rise about another one percent – remaining the best job market in the country - and well within the range that most economists call “full employment.”   

DC Reaches a Tipping Point – The Great Talent Migration Has Started

An astonishing shift has occurred in the DC metropolitan area job market just in the past few months.  We are now importing the brightest and best candidates from weaker job markets in record numbers.   The combination of lower real estate prices, a strong job market, and a tidal wave of planned federal spending makes our region a powerfully attractive place to live and work.

How do I know this?  Well if you’ve been reading this blog or my newsletter you already know all we enjoy one of the strongest job markets of any metropolitan area.  What caught me by surprise was how many of our recent searches were filled by candidates from New York, Michigan, Pennsylvania, and the west coast.  In our last 12 searches, fully a third of the finalists came from out of area.  This is a tenfold increase in just a few months, and the numbers are rising. 

Importing Talent

Derek Wilkinson, a Principal at Slayton Search Partners, spoke at The Staffing Alliance of Maryland Employers today. It was a lively conversation.

One topic we touched on is a favorite of mine – importing talent in a turbulent market. One thing that fascinates me is talent migration. I already see signs that the strong Washington job market is importing great people from the rest of the county. Similarly, Derek has been getting alot of interest in his timely thought-piece on who will be scooping up the most talented commercial bankers released from Wall Street. It’s a must read for corporate finance professionals, and you can download it here.

You Can’t Afford Mediocre People in a Recession, but Surprise! Now You Can Finally Afford Great Ones…

Employers should always demand top performance from their employees, but in good times you can get away with having a few mediocre people on your team. As long as they don’t break anything, they can come to work every day and enjoy the “rising tide” of increased opportunities. After all, a rising tide lifts even mediocre boats. In good times, like on a “T” ball team, everyone is a winner. Top performers actually drive most of the results, but everyone benefits from the success.

In tough times, though, mediocre people reduce your chances of survival. Customers demand more for their money, easy wins are few and far between, and nothing is easy. Mediocre people consume time, money and management attention and mostly just get in the way.

Vigilant CEOs Focus on Performance

I was recently invited to speak to three groups of local business executives who are part of the Renaissance Executive Forums. Most business owners told me their business was fine, a few told me their prospects were terrific, but without exception, every CEO had either vacant positions, or critical positions where someone was under-performing and not getting the results needed. Bottom line – this job market is still short on talent, and many employers are still hiring.

Employers in our area will have an unprecedented opportunity to “import” top performers from other parts of the country for the forseeable future – I call this The Great Talent Migration.