Dateline 14th July 2010 - UK unemployment falls to 7.8% - significantly the lowest in the Euro zone, lower than the US and the lowest in the UK for more than a year.  So what?

I'm not being flippant here - the drop in unemployment is massively significant, as it represents firm evidence of something those who are close to the frontline of recruitment were experiencing for some time following positive news about economic output and prospects;  that employers are being far more active in recruitment terms than they have been for some considerable time.

Headlines drive confidence

The 'so what' comment is because confidence is up and down like a yo yo.  Those headlines appearing in the media today relate to data collated up to the end of April, which has taken the best part of 3 months to place in the public domain as a piece of positive economic news. Because I work in the front line I can tell you that, right now, today, much of the market is currently reacting to all of the negative speculation by analysts - and I repeat SPECULATION - that has received media coverage over the past four or five weeks surrounding the first coalition budget. 

As the diagram above illustrates, there will be a lull before today's news starts to result in employers moving on recruitment decisions and we shall see some more positive activity, only to have fragile confidence squashed again in many cases when the headlines appear based upon the research that has been carried out here and now. 

And so it continues until either the headlines stop appearing or employers just decide use their own intuition and do what is right for their business.

The cost of procrastination?

If you are reading this as an operational manager who is either agonising over whether or not to recruit, or being told that you can't because of current policy, then it's likely that you know that something isn't getting done as well as it should in your department - or getting done at a cost to workforce morale. 

To play on the words of Edward Young, firms that continue to procrastinate on whether to recruit, as mentioned in the previous article, those people who are currently carrying what they perceive to be an unreasonable workload may well have 'fled' the company before your firm gets around to acting.

Then there's the reason you felt you should be hiring in first place. One managing director I speak to regularly who reports to a group board, was lamenting recently that the people he is not permitted to hire due to a global moratorium on recruitment, would produce additional revenue to almost sixty times their cost. 

Then there's the issue of quality, which reared its head again in the automotive sector with Toyotas well reported problems.  Considering the estimated $2billion physical cost of defects, and the $23billion that has been wiped off it's stock market value, it is interesting to speculate how many companies are storing up problems for themselves due to false economies in their recruitment decisions, similar to this automotive case study? 

Conclusions

People in decision making positions within organisations need to recognise a few things about the negative messaging they  consciously or subconsciously allow to influence their recruitment decisions (or lack of them!), and the knock-on effects this has on the strength and pace of recovery for their businesses

1. Economists are arguably the last people we should rely upon for forecasting future prospects.  Why?  If their methods of projecting were in any way reliable, then we wouldn't continuously have so many wildly conflicting interpretations and the doom and gloom predictions that are so often proven wrong, except when they create a self-fulfilling prophecy!.  Just because economists quote numbers doesn't mean their calculus is reliable.  2 + 2 ALWAYS equals 4. 

2.   How multi-channel 24/7 reporting impacts on the national psyche isn't even on the radar of journalistic considerations.  Their job is to attract clicks, readers, viewers and listeners. Full stop.  One of the first basic lessons taught in journalism is 'good news is no news' - and there's never any shortage of  'experts' wanting to get their name in the media who a journalist can call on to corroborate whatever angle they are seeking to push to attract attention.

Point being, if you are responsible for the performance of any particular business unit or organisation relying on people, then you have to make a conscious choice to take reporting for exactly what it is and refuse to have your confidence blown about by constant sensationalism.

3. Nobody knows your business like you.  If staff are feeling under unfair pressure, those with a choice will eventually choose to leave (usually your most employable people).  If customers aren't getting served properly because of staff shortages, eventually they will take their customer elsewhere. 

4. Losing and having to replace customers and key people is considerably  more expensive than timely recruiting.  It's time to get off the fence and to start making some decisions -  before staff and customers make their own.

Finally, those who emerge with the competitive advantage will be those organisations that drive actions based upon their desires - what they want to happen - rather than procrastinate due to unspecified fears.  Positivity can be just contagious - click the link, spread the word!