There’s one thing for certain you can say about Google: The company has been built on making decisions that seem to leave everyone else scratching their heads.
“Google … holds a prime vantage point from which to observe economic trends,” the Times’ Steve Lohr wrote. “And Google, though perhaps not a stand-in for the economy as a whole, is starting to see a recovery. The company recently began hiring again and is looking for companies to buy—both activities that had been held in check for the last year.”
In other words, Google feels so confident about the pace of America’s economic recovery that the company is putting its money on the table and taking a roll of the dice.
However, from Google’s perspective, this is hardly a risky gamble.
“The worst [of the recession] is behind us, and we’re seeing aspects of recovery,” CEO Eric Schmidt told a group of reporters Wednesday, October 7, at the company’s offices in downtown Manhattan. “We’re increasing our investment and hiring rate in anticipation of a recovery.”
“I would hope we’re a leading indicator,” Schmidt said, and I think most everyone who understands that you really need hiring and job growth to truly get the economy going again would agree. Of course, this isn’t the first time Google has done what I would call anticipatory hiring, and that sort of thinking is, well, what makes Google so different from just about any other company anywhere.
But is it the sign we seek, the one that signals that the recovery is here? Who knows, really. I hope that Google’s actions are the start of something big, but one company starting to hire again does not mean the recovery is nigh.
Still, I like Google’s track record on stuff like this. Here’s hoping that Eric Schmidt and his gang in Silicon Valley are as skilful as economic prognosticators as they are in building a killer Web-search business.
If they are, I think they have a future in Washington, perhaps helping a guy named Ben Bernanke at a place called the Federal Reserve.
“The Massachusetts economy is on the mend,” the Globe reports, “and the job market is showing signs of stabilizing. Temporary employment, considered a leading indicator for labor markets, has ticked up in each of the past four months. Key sectors of the state economy have posted job gains. Employers, who froze hiring in the darkest days of the recession earlier this year, are beginning to fill positions.”
And then there are these telling quotes that make you sit up and take notice.
“Six months ago, people were hunkered down. Nobody was sticking their head up,” said Dave Sanford, executive vice president at Winter Wyman Cos., a Waltham, Massachusetts-based staffing firm. “Now, they’re beginning to feel it’s OK to come out of the hole.”
“Some of our stronger sectors are showing signs of stabilizing,” said Elliot Winer, a regional economist based in Sudbury, Massachusetts. “The opportunities that are out there right now require education, training, and skills.”
Now, no one in the Globe story is saying that they see an imminent recovery anytime soon—not with Massachusetts posting an unemployment rate of 8.8 percent, a figure that is expected to rise in 2010 given how cautious employers remain.
In fact, Sanford says, “There’s no sense yet that the gates are open, the lights are on, and everybody goes back to work. But employers are cautiously optimistic that the economy is going forward. They’re just waiting for things to get a little brighter.”
Having employers feeling a little optimistic is critical if we’re going to start reversing the terrible economic trends we have been experiencing since this Big, Bad Recession started in December 2007. Massachusetts certainly isn’t a bellwether for the nation, but if you’re like me, you’ll take whatever good news wherever you can find it. And maybe, just maybe, this is the start of a small but growing trend that will help us not only start to see some recovery, but perhaps also allow employers to start thinking about investing in their workforces again.
Here’s yet another example, courtesy of the Los Angeles Times: “Employers increasingly are using credit checks to screen job applicants, a practice critics say is making it tougher for many unemployed workers to find jobs in the midst of a grinding recession. That could change by the end of this week, when a bill that would prohibit companies from pulling credit reports on most job seekers is scheduled to reach Gov. Arnold Schwarzenegger’s desk.”
The Times story focuses on a bill in state Assembly that would “narrow the category of jobs for which employers could investigate the financial background of applicants. Those would include positions in which employees would have access to large amounts of cash, valuables or confidential financial information, as well as managerial and law enforcement posts.”
Credit checks aren’t new; I had to agree to be checked and “bonded” when I took a job at Sears many years ago during my college days. I was going to be dealing with money and the company wanted to make sure I didn’t have something in my past that would make me a less-than-stellar risk. At the time, I don’t recall thinking it was a big deal.
It’s probably not a big deal for many now either, but it has become a big industry. As we noted in our Workforce Management Special Report on Background Checking in February, “If employers had screened out applicants based on credit history hits in 2007, they would have eliminated more than 40 percent of all applicants; if they had rejected those with criminal hits, they would have eliminated nearly 10 percent, according to the latest background screening hit report by Kroll.”
But we also said that pre-employment background checks aren’t perfect. “More than half of the organizations victimized by fraud ran an employment-history check on the perpetrator,” contributing editor Fay Hansen reported. “[Some] 40 percent ran a criminal background check and 23 percent ran a credit check. In half of the cases in which the perpetrator had convictions for fraud or had been terminated by an employer for fraud-related conduct, the victim organization had screened the perpetrator’s employment history as part of the hiring process.”
The Times story says companies feel that credit checks are a way to “help verify that candidates are responsible and trustworthy. The California Chamber of Commerce supports credit checks as a way to flag hires with checkered backgrounds that wouldn’t show up in resumes or interviews.” It lists the credit check bill on a list of potential “job killers”—legislation that would hurt California’s economic growth.
The flip side of this, the newspaper points out, is that “some academic studies have found little connection between credit history and job performance. Critics contend that the practice perpetuates a vicious cycle in a rough job market: Candidates with dinged credit have a tougher time landing work that would help them out of their financial bind. Civil rights organizations say the practice is particularly disadvantageous to minorities and women.”
Plus, the Times talks to a woman who had five job offers retracted in the past six years because of her credit report. It was bad, she says, “because of visits she made to the emergency room without medical insurance, including one episode of chest pains that ended up costing her $26,000.”
My problem with all of this is that credit reports are simply one tool in the hiring and screening toolbox.
No credit check should determine who you hire. Any company that blindly uses a pre-employment background screening without looking at any other factors is probably missing the boat on a lot of good job candidates, or, hiring some of those people who end up committing fraud on the job. Both speak to a singular lack of common sense in hiring, and no credit or pre-employment check is going to help with that.
A year ago Schwarzenegger vetoed a bill similar to the current one in the Assembly, and there’s no reason why he won’t do it again. So maybe this won’t be one of those new workforce trends coming out of California, but I wouldn’t bet on it.
My guess is that this issue isn’t going away. It will re-emerge, as so many of these bills do, in some way, shape or form. And maybe the next time it does, there will be a new California governor in place who has a different perspective on the matter.
I love holidays but always find that part of the price I pay for taking off is that a bunch of stuff has stacked up in the interim. So, here are a few interesting workforce odds and ends that you too might have missed while we were out celebrating Labor Day and the end of summer 2009:
The story discusses how Petco, the San Diego-based pet supply chain, adopted a three-page policy in November, modeled after what IBM is doing when it comes to employees and social media.
“Petco intranet manager Daniel Sundin said the policy bars blogging and using social media at the office unless required as part of an employee’s job,” the Union-Tribune story said. “The policy says employees are personally liable for what they write and are precluded, in part, from sharing sales numbers and proprietary information or using the company logo without permission.”
That sounds like a reasonable, level-headed workplace policy to me, but Petco’s intranet manager also made this point: “[A]lthough restrictions are needed … companies ignoring social media’s power miss the big picture. That’s just a head-in-the-sand thing,” Sundin added, “and you’re a dying company if you’re doing that.” Truer words have never been spoken.
And, here’s an observation from the Mercury News story that should frighten anyone who wonders what might happen if they get a pink slip.
“People don’t believe there’s a job out there for them anymore and they give up on themselves,” says Janice Shriver, a labor market consultant with the state’s Employment Development Department. “The long-term unemployed used to be people difficult to place because they were maybe ex-offenders, or homeless. Today it’s government workers and chemists and engineers.”
“As bad as the unemployment numbers are—10.7 percent in Florida—they don’t tell the whole story,” the Herald story says. “While hundreds of thousands of Floridians have lost their jobs because of the Great Recession, thousands more have taken big hits to their paychecks because of limited work hours or a shortage of jobs that use their skills. Economists call this underemployment, (and) the full extent of underemployment may be impossible to measure. But we do know this: In addition to the 9.7 percent of workers across the nation who were unemployed in August, another 5.8 percent were working part-time because they couldn’t find a full-time job. If those people were counted as unemployed, the jobless rate would be 15.5 percent.”
When did stealing employees from your competitors—a longstanding and honorable tradition about as old as business itself—become a bad thing?
I used to work in the newspaper business way back when a) the newspaper business was still healthy; and, b) there were still cities in this country that actually had honest-to-God competition between daily newspapers. I know that makes me a dinosaur, but I can remember a time when the best part of my job was figuring out how to poach some up-and-coming star away from the other paper in town.
That’s why I am surprised at what’s going on in California’s Silicon Valley, where “the U.S. Justice Department is investigating whether Google, Yahoo, Apple, Genentech and other tech companies conspired to keep others from stealing their top talent,” according to a story in the San Jose Mercury News.
According to the newspaper, “few details have been disclosed so far about the hiring-practice probe, which The Washington Post first reported in a story on its Web site late Tuesday. Citing two unnamed sources, [the Post] said the Justice Department was examining the possibility that the four companies and other unnamed firms may have violated antitrust laws by ‘negotiating the recruiting and hiring of one another’s employees.’ ”
My surprise at this story flows out of my experience working at a San Francisco dot-com during the boom years from 1998 to 2001. Back then, poaching talent from a competitor (and we viewed just about ALL companies battling for technology workers as such) was a mark of both a strong company brand as well as a crackerjack recruiting operation. Luring talent away from someone else was as common as fighting traffic on the Bay Bridge—and, a helluva lot more fun.
So, having some sort of agreement among tech firms to not recruit talent away from one another, if true, would be a huge change in how Silicon Valley tech companies traditionally operate. Plus, it flies in the face of California’s “tough rules barring companies from restricting their employees’ job hunting,” the Mercury News noted.
“Many companies across the country require employees to sign so-called noncompete agreements, in which the worker agrees not to be hired by a competitor within a certain period of time,” the newspaper said. “But California law generally regards such pacts as unenforceable, said Bob Taylor, a Palo Alto attorney who specializes in antitrust law. … As a result, Taylor said, California ‘is one of, if not the most, difficult states for employers to prevent employees from taking jobs with competitors.’ ”
Maybe I just see things differently out here on the Left Coast, but a deal among big tech companies to pull their punches and not recruit talent from one another is akin to thieves agreeing not to steal from each other. What’s the point? And, can you really trust anyone to hold up their end of such an unholy agreement?
I follow the philosophy that all’s fair in business, love and war. Isn’t this what the whole notion of “passive” recruiting—an oxymoron if there ever was one—is all about? I’d love to hear what recruiters have to say about this, because if deals like this to not hire from competitors make sense, we might as well kiss the whole notion of recruiting goodbye.
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