March Retail Labor Index
March 8, 2010
The March release of the Kronos Retail Labor Index reveals that in February 2010 both applications and hires decreased over January 2010 levels on a seasonally adjusted basis. The decrease in applications slightly outweighed the decrease in hires, so that the Index rose from 3.20% to 3.26%. This means that for every 100 applications received, 3.26 hires occurred in February.
One developing trend is the increasing volatility of application levels. The past few months have seen significant swings in application volumes, with increases in September and October followed by large decreases in November and December, and then a significant 20% month-to-month increase in January.
Currently, job applicants are forced to make employment decisions in an environment of extreme uncertainty about a job market recovery. In this uncertain environment, positive economic news (such as a better-than-expected holiday sales season) will encourage new entrants to the job market – both those wishing to change jobs, as well as those who are out of work but who had stopped looking for work. In the absence of sustained additional hiring by employers, these application surges will have limited durability. We would not be surprised to see this volatility continue well into 2010.
I’ll take some flies with that…
March 2, 2010
I recently attended the Net Promoter Conference in New York City and had the pleasure of hearing Director of Customer Service Tom Graves and CEO Jim Parrish of Carolina Biological Supply talk about how they’ve grown their business by investing in the skills of their frontline workers. Carolina supplies college and high school science departments with the equipment and organisms they require to equip their laboratories.
Their story is a great case study for organizations seeking to grow the loyalty of their customers through improving the experience delivered by the employees who interact with those customers on a daily basis. Carolina achieved success by explicitly measuring their customers’ experience, sharing that customer feedback with employees, and providing training to those employees to enable them to better meet their customers’ expectations. Although many organizations undertake similar customer loyalty programs, the extent to which Carolina has involved their customer service reps in driving improved results is unique.
I recently interviewed Tom Graves in order to share the Carolina story with you. You can listen to a podcast of our discussion here.
In this discussion, you’ll hear Tom refer to “NPS”. This stands for Net Promoter Score, a widely used measure of customer loyalty. You can learn more about NPS here.
Undercover with the Boss
February 17, 2010
If you haven’t seen the new CBS TV show Undercover Boss, it’s worth checking out. Perhaps not so much for the cheesy endings (at least on the first two episodes) where outcomes are achieved for individual employees that rival Queen for a Day in terms of bathos. What is “new” here, though, is our ability to look over the shoulder of CEO’s from brand name companies while they experience first hand how hard their employees work to deliver a good outcome for their customers, often in spite of organizational obstacles imposed in the interest of greater efficiency.
I put “new” in quotes because the concept of understanding your front line employees as a means of understanding how to improve your business goes back to management research that Joseph Juran was pioneering in the 1950’s. When I was teaching total quality management seminars in the 1980’s, we were preaching the value of understanding the moments of truth where your employees either delight or disappoint your customers. What’s therefore so interesting about this show to me is what a revolutionary concept this field level view of the world has become for many organizations.
In the first episode, pictured above, Larry O’Donnell, President and COO of Waste Management experiences not only how difficult and dirty some of these waste disposal jobs are, but also how well meaning policies set at a corporate level can wreak havoc at the employee level. He seems genuinely surprised to see that truck drivers have no bathroom breaks built into their routes or that cleaning 15 portable toilets an hour is a superhuman effort. He appears equally surprised at the level of grace and humour that many of his brand ambassadors bring to their very tough jobs. Larry takes action to address these issues when he goes back to his day job that hopefully will make the work environment more friendly for his employees.
How great could your organization be if senior leadership could experience life in the trenches?
P.S. In the second episode, the CEO of Hooters seems perplexed that potential customers find the Hooters brand demeaning to women. REALLY?
February Retail Labor Index
February 8, 2010
The February release of the Kronos Retail Labor Index shows that in January 2010, retail applicants came back into the market in force, with a 20% increase in applications over December 2009. We had observed a seasonally adjusted decline in applications at the end of 2009, possibly due to workers becoming discouraged by their holiday employment prospects.
Hiring for January was also down, but by a smaller 4.26%. The good news is that although hiring was down compared to one month ago, it was up over one year ago, by 12%. The combination of greatly increased application volumes, combined with a reduction in hiring, led to a decline in the Index of 20.41%, to 3.20% (for every 100 applications received, 3.2 hires occurred on average).
In this month’s report we also introduce a new model of the consumer economy. Through this model we will use data to observe how three major markets interact: (1) the market for goods & services; (2) the financial markets which supply credit to consumers; and (3) the labor market which, through employment, enables spending, saving, and investing by consumers. We will introduce the different components of the model in upcoming reports in 2010.
The conceptual model introduced in the current report demonstrates how consumers’ motivation to increase their liquidity by decreasing their debt (negative liquidity), including exactly the kinds of revolving credit that retailers extend to stimulate purchases, correlates to the Index. According to the report, a “choke point” can be seen in late 2008, where at its peak the ratio of consumer liability to disposable income had reached 138% in the U.S. Since that point, consumers have reduced the amount of revolving credit for the first time since World War II. This has a direct negative impact on retail spending and thereby retail hiring.
What’s your attitude toward retail spending these days? Many retailers seem to be offering non-stop sales and promotions to loosen your wallet. Are you biting?
The Myth of Job Creation
January 28, 2010
Our board member Mark Lange is a former presidential speech writer, and in fact wrote the George H.W. Bush’s 1991 state of the union address. In today’s Christian Science Monitor, he writes about last night’s speech in an article entitled Obama and the myth of job creation.
Here are some highlights of Mark’s article:
Redefine our idea of a “job.” The labor market already has, ever since the employment “contract” began to change forever back in the 1980s. Particularly for white collar workers – disproportionately affected in this recession – the prospect of contract work and free agency has never been easier. And by doing something of value, the résumé expands and the long grind (and potentially paralyzing shame) of joblessness is eased.
Re-tool, quickly and regularly. Small businesses looking to expand are finding more independent contractors for Web design, programming, marketing, videography, and similar work. Focus on areas of employment in healthcare and education, where there’s growth.
Reconsider unemployment benefits. Rather than make unemployment insurance an all-benefits-for-no-work proposition (which discourages any work and earnings at all), states should apply the same kind of incentive that worked with the Earned Income Tax Credit – as beneficiaries earn a little more, they receive a little less in benefits, but their net take-home is higher.
Welcome free trade. For seven decades, America’s economic and political leadership has told the rest of the world to open up trade. They did – and we and the global economy prospered. The irony of our closing down trade now makes no sense. It’s our responsibility to mitigate the negative consequences of global trade for the vulnerable (that’s something government can be good at). But to drive living standards up, we need more and freer trade, not less.
Recognize immigration for the competitive advantage it is. Our great secret, relative to Europe and much of Asia, has always been our ability to assimilate and engage the most ambitious people from around the world. This applies as much to the PhD student here from Asia or India as it does to the guy with the leaf-blower. We need to find better ways to enlist them here, not erect paper walls of visa requirements.
Innovation is no abstraction. In fact, all innovation is local – it applies to the payables clerk who comes up with a more readable spreadsheet, or the line manufacturing employee who tweaks and improves a machining process. There’s nothing exotic about “knowledge work” – we all work with our brains. Some of us use them to run our mouths. Others, our hands – on paint brushes, keyboards, school chalk, machine tools – but we all use our brains. And we can all use them better, starting tomorrow.
The economy and unemployment remain burning issues for most of us as this recession marches on worldwide. What do you think about the role of the government vs. the role of individuals and organizations in creating new jobs?
Consider helping out in Haiti
January 14, 2010
I usually confine my blog posts to workforce matters, but the people of Haiti are top of mind today. I was happy to hear that my friend and his family in Haiti survived the earthquake without harm, but many others are in dire need of medical assistance. Please consider a contribution to Doctors Without Borders to help them out. This recommendation comes from my friend in Haiti.
January Retail Labor Index
January 11, 2010
The January release of the Kronos Retail Labor Index report provides results for the December 2009 Index as well as a year-end recap of trends in the applicant population. The December Index level was the highest of 2009, at 4.02% (for every 100 applications received, 4.02 hires were made). This result appears to be driven by a continued decrease in applications (the lowest since August 2008) which outweighed a 7.1% decrease in hirings relative to a year ago.
December unemployment numbers from the Bureau of Labor Statistics show that while unemployment remained constant at 10 percent, the “underemployment” rate, which includes those who have given up looking for work and those employed part time for economic reasons, rose slightly from 17.2% to 17.3%. We will be watching Kronos application levels closely to see whether recent declines in application volumes are the result of discouraged unemployed workers giving up on applying, or whether they reflect early signs of an improving labor market.
Holiday 2009 recap. In reviewing the holiday hiring season, which typically is in full swing by October, some interesting dynamics emerged when we compared 2008 and 2009. September and October Index levels were far higher in 2008 than in 2009, with a new all-time low reached in September 2009 (2.58%), and with only a slight rebound in October 2009 (2.90%). These numbers reflect the extreme caution with which retailers approached the holiday 2009 season, after being burned by low sales and heavy discounting in 2008. However, a hiring surge in late November, combined with a decrease in applications, pushed the November 2009 Index above the November 2008 level. This trend evened out in December, with December 2009 and December 2008 Index levels at the same 4% level.
These Index patterns reflect overall trends in holiday season sales. In 2008, the extremely weak holiday sales surprised retailers; accordingly, hiring rates were relatively strong early in the season in September and October 2008. After this experience, and in light of sales projections, retailers held back on hiring in September and October 2009, planning to add staff on an as-needed basis. By November 2009, with retail sales at an adequate level – 1.3% higher than in November 2008, according to the Census Bureau – retailers were confident enough to add staff in the latter half of November; seasonal sales were weighted towards the end of the season, with December same-store sales posting a 2.8% increase over December 2008, according to the International Council of Shopping Centers.
2009 and the changing applicant pool. Our analysis of application data collected via the Kronos hiring system has revealed some interesting trends which reflect wider changes in the labor market and unemployment rates. Highlights include:
- The percentage of male applicants in the 25+ age group has increased from 45% in Q4 2006 to 52% in Q4 2009. This reflects the disproportionate loss of jobs by men employed in construction and manufacturing. As a result of job losses in these sectors, more men have entered the retail labor force, and within this age group, men now comprise the majority of applicants.
- We did not see such a change in the “traditional” retail labor pool – high school and college-age applicants.
- The applicant pool is becoming older as more experienced workers are competing for entry-level jobs with younger workers. The percentage of Baby Boomer applicants has increased since 2006 from 6.2% to 8.3%, while Generation Y’s share has dropped from 79% of the total to 74%.
- Historically, a segment of the population sought part-time retail work either for supplemental income, or to work part-time for lifestyle reasons (for example, as a second household income). Those specifically seeking part time work have decreased from 43% of the total in Q4 2006 to 34% in Q4 2009. Less confident of their ability to find work at all, a larger percentage of applicants will now accept either part time or full time work.
How do you balance work and life?
January 6, 2010
I wrote a guest blog this week for Business Women’s Finishing School & Social Club, a work oriented blog that addresses “Everything you didn’t learn in school that will help you survive the work of work”. My blog post describes my experiences in balancing motherhood and work.
A lot has changed since I began my career in the 1970’s. Working women and mothers are the norm, not a novelty. Equal rights are guaranteed under the law not only for women, but for other classes of employees who were formerly discriminated against based on race, age, physical abilities, affectional orientation, etc.
Although the laws have changed, the difficulty of giving work and priorities outside of work adequate attention remains challenging. What’s your story about balancing work and life?
What does 2010 have in store for us?
December 30, 2009
My friend William Tincup has been asking thought leaders in human capital management for their top 3 predictions for 2010 and posting them in his blog.
I contributed the following:
- The battle for talent is heating up again with top talent weighing multiple job offers against yours.
- HCM buyers continue to hold onto their wallets unless vendors can make personalized and defensible cases for their products and services. Branding, SEO/SEM and e-Marketing remain crucial to driving awareness and filling the sales funnel, but people close the deals. Marketers need to arm their sales reps with just-in-time personalized sales tools that create opportunities for 1:1 conversations.
- Gen Y employees’ impact on corporate culture will continue to expand and manifest itself by demanding more acceptance of smart phones, social media, and flexible work options as must have elements of employee engagement.
What are your predictions?
Mintzberg on Management
December 17, 2009
Our board member David Creelman has written a commentary on Henry Mintzberg’s new book, Managing. You can find David’s discussion of this book here. Dr. Mintzberg is a professor at the Desautels Faculty of Management at McGill University in Montreal and a frequent contributor to publications like the Wall Street Journal, BusinessWeek, Fast Company, etc.
David’s comment about the book below really rang a bell for me. How about the rest of you managers out there?
The crazy world of the manager doing twenty things at once, working off-the-cuff in a situation only half understood is not a flawed system—that’s what management is.
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