I’m pleased to announce the impending publication of my new book Success! As Employee or Entrepreneur. Purchase a copy before February 1 and be entered to win a $100 gift card. I’m offering a 30% pre-publication discount on Success! and my previous book, A Hooker’s Guide to Getting a Job. Buy both and get a 40% discount. Click here for details! And check out the Library page on my relaunched website. You’ll find hundreds of free articles, video and audio files on all aspects of a job search. Good luck!
Category Archives: Workforce Optimization
Why We Should Support Outsourcing
The following is based on my new book, Success! As Employee or Entrepreneur.
How can anyone support the sending of US jobs overseas? It’s a perfectly logical question to ask. The answer is, however, rather simple: The more jobs we send overseas the more jobs are created here by foreign-owned companies and by the very companies that chose to outsource some of their jobs.
Yes, it is a catastrophe for the individuals who lose their jobs to a call center in Mumbai. But it is also an opportunity for those who were laid off to be trained for those Twenty-First Century jobs that will provide them with security and prosperity.
Of course, some jobs cannot be sent overseas: Obviously, government jobs aren’t going anywhere. Healthcare comes to mind. Medical billing may go overseas and we may utilize foreign physicians to augment staffing so, for example, x-rays can be analyzed around the clock, but physicians actually treating patients cannot be outsourced. Additionally, there are non-profit jobs, as well as those in construction, assembly and installation that are not going anywhere. Indians cannot provide social services, install television satellite dishes or solar panels on the roofs of our houses. Your mechanic and dry cleaner are staying put! The same goes for work in the recreation, hospitality and food services industries. More importantly, the high-paying administrative and leadership jobs are here to stay.
The entire question about outsourcing is nothing new. The debate dates back centuries to David Ricardo whose “law of comparative advantage tells us it is far better for the Argentineans to grow beef, the Japanese to make cars, and the Italians to turn out high-fashion shoes than for each nation to attempt to become self-sufficient in all three areas.”[1]
I first became interested in outsourcing when I read in Inc.[2] magazine that in 2003 134,000 jobs were outsourced from the US to foreign countries. What first caught my eye was that the number was so small. Based on all the media reports, I had thought outsourcing was having a far greater impact. But what really shocked me was the number of jobs outsourced from foreign countries to the United States – what is referred to as “insourcing.” According to the same article, 5.3 million people were employed by US subsidiaries of foreign companies. So there is no misunderstanding, foreigners can’t just conduct business in the US, they have to set up businesses here. They have done so and the result is over 5 million jobs for Americans. Put differently, in 2003, for every one job outsourced to a foreign country, 39.5 jobs were insourced to the US!
And this is not some fluke. Everyone outsources and everyone benefits:
“Does your father make shoes? Do you milk your own cows? No? Then you’re outsourcing,” says Martyn Hart, chairman of the U.K.’s National Outsourcing Association… “People think it means job loss, but it actually creates jobs because companies become more efficient, which generates more wealth.” He’s not kidding. According to McKinsey Global Institute, for every dollar of corporate spending Americans outsource to India alone, the US economy gains $1.14…[3]
Still not convinced?
In 2003, Matthew Slaughter, an economist at Dartmouth College, took a look at companies that engaged in offshoring in the 1990s, and found that for every job the US multinationals created abroad (2.8 million by his count), two jobs were created for the parent company (5.5 million jobs) back home in the US.[4]
Finally, according to a study by the International Monetary Fund, offshoring “does not appear to be leading to net job losses,” but it does make the caveat that the jobs lost in one sector are only “offset by jobs created in other growing industries.”[5]
So why is outsourcing good for business and, by extension for employees and the country? According to Vivek Wadhwa from Stanford Law School, who is an economist and recognized authority on outsourcing, “It lets companies do their grunt work abroad, and focus resources domestically on research, development and product. We know more innovation grows the economy and as a result creates more jobs. Such allocation also helps businesses stay competitive to stay open, which of course is the No. 1 issue for keeping jobs.”[6]
He is not alone in his appreciation of the value produced in the US as a result of outsourcing. Inc. interviewed Columbia University Professor Amar Bhidé about his new book, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. In discussing outsourcing, Bhidé explained that outsourcing is not a zero-sum game. A lost job to India is not a net gain for India and a net loss for the US. As he put it,
It’s helpful to think of a specific example. The World Wide Web was invented by a British scientist living in Switzerland. Think of how much this invention in Switzerland has revolutionized lives in the US and has improved US prosperity, probably to a greater degree than it has in Switzerland and certainly to a greater degree than it has in most other parts of the world. Why? Because the US is really good at taking things like the Web and weaving them into our commercial fabric. Or, to give you another popular example: Many of the high-level technologies associated with the iPod were developed outside the US Compression software comes from Germany; the design of the chip comes from the U.K. The whole idea of an MP3 player comes out of Singapore. But most of the value has been captured in the US, because the US happens to represent the majority of the use of MP3 players in the world.[7]
One last thing to consider in a discussion about the evils and benefits of outsourcing is an intangible: goodwill. When US popularity around the world was, to say the least, struggling, there was at least one exception: “India, one of the chief beneficiaries of US outsourcing, is also one of the few countries in which popular attitudes toward America have remained strongly positive.”[8]
Don’t underestimate the contribute that outsourcing makes to our national economy in, of all things, job creation. By all means, feel for those who lose their jobs to outsourcing, but be happy for those who gain jobs through insourcing.
[1] William J. Bernstein, A Splendid Exchange: How Trade Shaped the World (New York: Atlantic Monthly Press, 2008), p.18.
[2] “Insourcing 101,” Inc. (April 2006), p. 50.
[3] “The Sourcing Summit,” FastCompany.com, November 16, 2010.
[4] Dan Fastenberg, “Is Outsourcing Good For The Economy — And Workers” Jobs.AOL.com (September 14, 2012).
[5] Ibid.
[6] Ibid.
[7] “Amar Bhidé on why the techno-nationalists have it all wrong,” Inc. (November 2008), p. 100.
[8] Amy Chua, Day of Empire: How Hyperpowers Rise to Global Dominance – and Why they Fall (New York: Doubleday, 2007), p. 340.
Let’s Look at the Affordable Care Act
I keep on getting questions about Obamacare. Is it as bad as people say? Is it hype? What does it mean? Well, here’s what I think it means (thanks, in part, to Inc. magazine):
If you have less than 50 employees or 50 Full Time Equivalent (FTE) employees, the law should not impact you. However, from the perspective of hiring, if a business has 49 employees, odds are they will not make that extra hire.
However, if they have less than 25 FTEs, and their average salary is below $50,000, they might qualify for a two-year tax credit to enable the to buy health insurance. The good news is that they will then become a more desirable employer. Of course, the question is, What will happen after the two years? Moreover, the government already gives tax credits to employers who hire veterans. But the process is so cumbersome that most employers don’t even bother. Will it be the same under Obamacare? Time will tell.
If a company has 50 or more employees or FTEs and they offer insurance, the question is whether or not they pay at least 60 percent of their employees’ health costs. If so, the next question is, Do any of the employees pay more than 9.5% of their W2 income on health insurance? If so, the employer has to pay a penalty of up to $2,000, not counting the first 30 employees. So for number 31 to 49, the penalty is in force.
If the employer is not paying at least 60%, they may qualify for a tax credit, but the above mentioned concern is still valid.
The good news is that if they cover 60%, and no one pays more than 9.5%, then they are in compliance with the law and have no worries about penalties.
By the way, Full Time Equivalency means at least 30 hours or more a week, not 40.
And one more thing: If an employee is under 26, they can be covered by their parents’ insurance. So let’s say a company only hires 18 to 25 year olds. They will save a ton of money, which may be the only way they can operate. But, are they opening themselves up to an age discrimination suit?
So is the Affordable Care Act affordable? Only time will tell.
The Three Cs of Effective Presentations
A few years ago I attended a business fair in Manhattan. There was a speaker giving a talk titled, “How to Make Effective Presentations.” She began by saying that she had a bone to pick with men and women. That was fine. It appeared to be the introduction to some light-humored banter. And, as long as you are going to insult everyone in the room, no one will complain.
Things, as you might have guessed, got interesting. First she took on the men. Her complaint was that when men stand up to speak, we button are jackets. This, she claimed, was because we had gained weight since purchasing our jackets and we are trying to hide our bellies.
Every man in the room looked at each other with a puzzled expression on their faces. First, the reason that we button our jackets is because – and this happened to every one of us – when we got our first “big boy suit,” and stepped on the stool for the tailor to work his magic, he leaned over and buttoned the jacket explaining, “That’s how big boys were their suit jackets.”
Second, if you have put on weight since you purchased your jacket, the last thing you want to do is to button it. The strain will be apparent – and, worst case scenario, a button could fly off!
Next she turned to the women. The complaint this time was that when women get up to speak they fix their neck lines; they fidget with their blouses. Same reaction as with the men. The women all looked at each other with a sense of bewilderment. None of us knew what she was talking about, but we all knew that she did not check her facts.
Some people left. I would have, but I was sitting in the front row and did not want to appear rude. But with authority I can say, because I was front row center, only two or three people handed her back the form she had distributed if anyone wanted to sign-up for her newsletter.
She had forgotten the first C of effective presentations: credibility. She had none.
The second C is comedy. I am not a joke teller. Every time I have tried to tell a joke in public, I have failed. I can’t even blame the jokes. It’s just not what I do. But I can tell a funny story and an amusing anecdote – usually of the self-deprecating kind. Getting an audience to laugh is a way of breaking the ice and being engaging. The problem is that sometimes, forget about jokes, what you consider to be funny someone in the audience might find offensive. That is why it is so critical to speak with the event planner to get a good idea about your audience. The worst example was a talk I heard about 9/11 – still an open wound in New York City. The speaker had made a very good presentation, but he ended with a joke about first responders. There were no questions. Everyone immediately started to leave. No one shook his hand.
And that brings me to the third C, compassion. You have to bond with your audience. I always arrive early, speak to the first-arrivals, and get some idea of who they are and why they came. At the beginning of the talk I take a poll to see what people want me to focus on. I throw out a couple of options, and I follow their lead. That way, they have bought into the presentation, so to speak. To be honest, I used to lose a few people at the start of my presentations, but since I started polling, walk-outs are few and far between.
Credibility, comedy and compassion. Remember them and your presentations will always be effective.
Quality Assurance and Customer Retention
This post originally appeared in 2006 on my blog, Non-Profit Concerns.
Former GE CEO Jack Welch made many things famous, not least of which is the quality assurance program knows as Six Sigma. As explained by Martin Kihn in the September 2005 issue of Fast Company, “Sigma is the Greek symbol used to denote deviations from the mean. And so Six Sigma is essentially a set of procedures and tools designed to measure and analyze ‘defects’ in a process and help determine what’s causing them. The goal – the ‘six sigma’ part – is 3.4 defects per million, or 99.997% perfection.”
Ever wonder how the Japanese took over TV, stereo, electronics and automobile production from us? In the US manufacturers were willing to accept 5% rejects per million. In other words, for every 1 million anything that was Made in America, 50,000 would be no good. The Japanese lowered that number to 200 and gained industrial leadership. As Jay Levinson notes in Guerilla Marketing, “Every error that could possibly be construed as a mistake was noticed by people actually hired by industry to count mistakes. In the category of mistakes included shoddy workmanship, tardiness, breaks that lasted too long, minor flaws in detail work, low morale, and anything at all that impeded production.”
So how many errors does your organization make? How can you implement a Six Sigma program at your agency?
How often do you send out a mailer that is improperly folded? How many of your employees arrive at work late (begin the day eating breakfast) and leave as the clock strikes five? How often do staff go out shopping on their lunch hour and return, purchases and food in hand, and then take an additional 20 minutes to actually eat lunch? How many typos are there on your publications? How proud are your staff of where they work? How much bureaucracy do you have which stifles creativity?
J. Edgar Hoover had a rule that phones had to be answered by the third ring. If I call your offices, how long is it going to take for the phone to be answered – dare I dream? – by a real person?
How long does it take for a receipt to be sent to a donor? How long does it take for a stock letter to arrive?
Here’s one: How much failure do you encourage? Do you let your staff try new things? Do you celebrate the attempt, regardless of the results? Do you see failure as a learning experience? At IBM a manager was given $10 million to start a new program. After a year the attempt was a total failure. He went to his boss and offered his resignation. His boss refused to accept it on the grounds that they had just spent $10 million educating him!
Of course it does not need to cost anything, let alone millions, to get it right. It is all a matter of recognizing for whom you really work.
When working at a nursing home, a colleague and I made a presentation at the Greater New York Hospital Association. In passing she mentioned something about working closely with hospital discharge planners and I said something about having stories about the home appear regularly in the local newspapers. They were just passing remarks of seemingly no great importance.
After the formal presentation was over, she was asked how long it took her to respond to a request from a discharge planner. She said about 10 minutes. I was asked how often stories about the home appeared in the newspapers. On average it was 15 times a month.
Our colleagues were shocked. And so were we. One hospital discharge planner said that he was happy if he got a response for a request for a bed in two days. One community relations director said that her boss was thrilled if she got them into the paper once a month. They wanted to know the secret:
There is a saying in the Talmud, Know before whom you stand. In other words, know who your clients are.
The nursing home where we worked was a good nursing home. It had been before the new admissions director arrived, and was after she arrived. But her predecessor could only keep the occupancy rate a few points above 90%. The new director had us at 99%. Same nurses, same certified nurse assistants, same doctors, same therapists, same housekeepers, same maintenance staff, same food, same everything. What was the difference? Her predecessor felt that her clients were the potential residents and family members. The new director saw the discharge planners as are her clients. Instead of going to the hospitals to interview patients, family members, doctors and nurses, she stayed at her desk to answer the phone when the discharge planners called.
As for press coverage, colleagues at other facilities told me that their bosses had them sending out long press releases going into great detail about this that or the other thing that was happening at their facilities. For them, their bosses were their clients. Not for me. I explained to the boss that we had little control over what actually happens to our press releases. The longer they are, the more editing will be needed and the more mistakes will be made. So all I would do is send out a 3 to 4 paragraph press release with a photo. Basically, they were fillers – photos with long captions. That is what my clients, the newspaper editors, wanted. And what my boss really wanted was to see the home being recognized in the press.
Remember, your clients are not your bosses and board members. They are only the ones who hire and fire you! Your real clients are the persons who allow you to succeed at your work. They may be donors. They may be hospital discharge planners. They may be newspaper editors. They may be politicians. They may be organization members. They are the ones who utilize your services and the ones whose cooperation you need. Whoever they are, if you keep your clients happy, your bosses will also be happy. And the secret to doing that is quality assurance. There are literally thousands of other nonprofits to where they can turn. Don’t encourage them by being sloppy.
Why Philanthropy Can Save Your Business
April 10th, as I am certain everyone knows, marks the start of National Volunteer Week. In this month’s issue of Fast Company, Margaret Rhodes writes:
Gym reimbursements and lavish company parties may be going the way of the dinosaur, but paid time for volunteering is one employee perk not yet in danger of extinction. Take UnitedHealthcare, whose company attorneys recently donated 600 hours of pro bono legal service. Or Target, whose workers spend 450,000 hours annually on projects such as overhauling school libraries. At Gap, staffers can spend five company hours each month on causes like teaching underserved youths about job applications. VolunteerMatch, which pairs corporations with communities, expects skills-based volunteerism to double by 2015, thanks to a huge win-win factor: “Employees learn project management skills and improve their public speaking skills,” says Gap’s director of employee engagement, Gail Gershon. “Obviously you want to get promoted, and this is a clear path to getting there.”
Talk about a win-win. The company gets employees who gain project management and public speaking skills, and the employees become candidates for promotion. What’s not to love?
Of course, there is nothing new here. Everyone knows that Google and Zappos have always encouraged their staff to work on their own projects during company time. It results in new businesses for the companies, and happy employees. The companies lose nothing. They gain everything.
In his excellent book, Million Dollar Consulting, Alan Weiss notes that, “The best organizations today give employees a certain number of paid days off to volunteer. They encourage employees to get involved at leadership levels in nonprofit organizations.” Moreover, companies that take the initiative to create philanthropic programs “are building relational capital with their employees and with their community. That’s leveraging philanthropy.” And the result can be “increased customer loyalty and revenue, [and] deeper employee loyalty and lower turnover.”
Companies need to appreciate that corporate philanthropy is not simply writing a check. It has to be strategic. As Tommy Spaulding notes in his book, It’s Not Just Who You Know: Transform Your Life (and Organization) by Turning Colleagues and Contacts into Lasting, Genuine Relationships, companies need to “transition from the old model of community business plans to the new business model of community investing.” But that’s not all. ” These plans are strategic and targeted, and they offer the greatest potential benefits to the company and the charities.” Moreover, ” Nonprofits have to leverage their outreach to benefit companies. And companies have to leverage their relationship with nonprofits so they can create a return on their investment that includes more marketing exposure, more brand awareness, greater employee engagement, stronger customer retention, more effective public relations, and higher sales and profitability.”
Spaulding continues,
Sometimes organizations need innovative ways to create and implement giving strategies. Or they need help building relationships with non-profits that are accustomed to simply holding out their hands and asking for money rather than seeing companies as strategic partners. Of they need help learning what it means to turn all of that focus on corporate social responsibility into something that’s meaningful to the individuals throughout their organization.
From the non-profit’s perspective it is important that it “figure out the causes that make the most sense given the company’s mission, vision and values.” As for the company, it needs to follow the trend of the past few years and create “a focused and intentional strategy for community involvement.” As Spaulding puts it, “You can’t just give money to all the chirping birds; you have to be more strategic.” This is not a company “giving” money, it’s a company that is “investing” in a cause.
How would a company go about starting a philanthropic program?
First, someone has to make the pitch. If it’s the employer, he or she has to make it clear that everything will be done on company time, no one will lose any pay, and the employees are in the lead. They choose the charity or charities or the cause(s). This is not the boss promoting himself with a charity of his choosing. If it’s the employees that want to proceed, they need to convince the boss using the above mentioned points to show that not only will a charitable program not cost anything, but the benefits more than make up for any lost time.
Regardless, it’s the employees who have to take ownership of the program. To again quote Spaulding,
A deep, meaningful corporate investment program seeks the opinions of the employees and aligns with their interests, not just the interests of its executive leadership. And it involves not just the checks that are written, but the way companies engage their employees and customers in the community. Every employee of an organization should be loyal to three things: the mission of the company, the customers or constituents they serve, and the welfare of the community.
Second, staff, which can include the owner/boss in a subordinate role (“Just one of the boys/girls!”) , need to get organized. They need to decide whether to form their own non-profit to which employees will make monetary donations or if it should be more informal. If the donation is of money, the question is who writes the check: ABC Co., Ltd. or the ABC Employees Foundation.
Third, once they have organized they need to decide what cause or charity to support. Some philanthropic programs are more formal than others, calling for the submission of written proposals to support a few causes. Others simply choose on their own to whom to give.
Fourth, next they have to define “support”. It can be monetary, a donation of product or volunteering. Many companies have a “Volunteer Day” and usually make it on Martin Luther King Day.
And sixth, there is follow-up. The staff, and employer, need to know that they have had an impact. Accordingly, they have to remain in touch with the recipients of their generosity. By so doing, they build a real relationship which can only grow over time.
Recession Proof Jobs II
They say that the recession is over. Technically that may be correct. However, from the perspective of the individual – and there are still millions of them – who can’t find work, technicalities are not important.
I recently appeared on the Dream Job Radio program talking about this very subject. If you were not able to listen, or don’t know have the time, here are the highlights…and a few additions:
Recession proof jobs are jobs that are needed despite the economy. It does not matter how bad things are, most people are still going to use their dry cleaner and take the family out for a nice dinner, maybe not as often as before, but it will be a regular event. In-home entertainment is cheaper than going out to the movies, and everyone – especially someone who is stressed-out from unemployment, is going to want, needs, a little down-time. And, of course, you still need your physician, attorney and accountant.
But recessions also, and ironically, provide opportunities for expansion. The most successful companies actually expand their activities during a recession. When times are good and something breaks, we buy new. When times are bad, we get things repaired. It can be anything from a refrigerator to a car. Repair, not replace, is the sign of bad times – or good times if you are the one making the repairs!
Another example is continuing education. When you are unemployed, and it’s a buyer’s market – meaning few jobs a hordes of applicants – the best know that they have to better themselves. And the only way to do that is to enlarge and update your skills. I am not talking about getting a college degree. I am talking about going to a trade school and taking a six-week course on learning Microsoft Office, data entry, QuickBooks, whatever.
But since we are on the topic of education, a lot of people will tell you that a college degree is important for you career. Nonsense! Don’t believe it for a minute. I have a B.A., an M.A., and a Ph.D. and I tell you categorically that having a college degree is NOT important. It’s CRITICAL! The September 2010 unemployment statistics put out by the US Department of Labor are indicative of what has been happening throughout the recession. The unemployment rate for 25-year olds without high school diplomas is 15.4%; 10% for high school graduates with no college; 9.1% for persons with some college or an Associate degree; and 4.4% for college graduates. Any questions?
According to the September 10 issue of Inc. Magazine, the sectors producing the most jobs are government; business products and services; consumer products and services; IT services; advertising and marketing; health, software, financial services, telecommunications, and real estate. “Government” is a reflection on the census, now over, and Obama policies which may be ending in a few weeks…
The funny thing is that a recession is a good time to be unemployed. Why? In good times employers are hesitant to hire people who are unemployed. During a recession, it’s not a big deal. It’s almost expected! Moreover, a candidate can show a prospective employer what he or she is made of. Too many unemployed sit around the house, watching television, collecting unemployment and feeling sorry for themselves. The good ones do something. They take on consulting or other short-term assignments. They go to school to learn new skills and update the ones they have. They make their job search their full-time job! All of this sends positive messages about a candidate’s character and work ethic to the prospective employer.
If everyone keeps that in mind, maybe the recession will really be over!
Employment Edification 