News Updates
Dennis Padgett knows he's in a coveted position for these troubled economic times.
In the next few months, he'll be hiring 200 people for a new research and development facility.
His employer, Cobb-Vantress Inc., a poultry breeder based in Siloam Springs, Ark., is building a $19 million pedigree breeding complex in Deer Lodge, Tenn. Last year, the company opened a $14 million state-of-the-art hatchery in that state.
Despite the economic downturn, "We're doing fairly well," says Padgett, GPHR, director of world human resources at Cobb-Vantress.
While some industries have been hit harder by the recession than others, Padgett says the role he plays gives his employer a leg up. The expansion has, in turn, enabled it to create jobs and offer welcome news to citizens of struggling localities where new facilities are located.
He encourages innovation among 1,400 employees in eight states—and 2,500 employees globally—and nurtures relationships with universities and even high schools to ensure that a healthy crop of students pursue agriculture careers to fill future jobs in hatcheries and research labs.
"I report to the president, so HR is definitely involved in our strategic planning—and part of that planning process is determining what human capital we are going to need," Padgett says.
Open dialogue among executive-level leaders promotes growth: "It's all about moving our company forward," he says.
In this election year, the nation's high unemployment rate remains a hot debate. However, while politicians wrangle over how to create jobs, HR professionals are doing their part to put more Americans to work. They are:
- Fostering innovation.
- Discovering efficiencies that can help their businesses expand.
- Persuading business leaders to hire people with the right talents to ensure that their organizations grow.
- Collaborating with community colleges and universities to update the skills of unemployed and underemployed workers.
- Mentoring displaced workers and young people to improve their chances of joining the workforce.
While HR professionals can't directly create jobs, many play vital, albeit indirect, roles in adding positions.
"Obviously, they aren't the people who approve requisitions within the companies for jobs. But HR can have tremendous impact on the people who do make those decisions," says Wayne F. Cascio, a professor of management at the University of Colorado-Denver. "HR professionals have a great opportunity to exercise leadership at the senior management level in terms of educating their colleagues—other senior managers—about the kinds of talent investments that make the most sense in terms of achieving strategic and operational objectives."
Wanted: More Jobs
About 14 million Americans are currently unemployed. For much of last year, the unemployment rate hovered at about
9 percent—far above the 5 percent level economists consider full employment. If you count discouraged workers who have given up looking for jobs, the total unemployment rate was about
16 percent.
To return to pre-recession employment levels by 2020 and employ those just entering the workforce, the United States needs to create 21 million jobs, according to a McKinsey Global Institute study released in June.
There's the rub: The economy won't improve until companies start hiring, but employers are reluctant to increase hiring because of uncertainty about the economy.
"There is a bit of a chicken-and-egg situation right now in the U.S. economy where corporate profits are up, but companies are hesitant to invest because they aren't sure about the strength of the recovery," says Susan Lund, director of research at McKinsey and one of the study's authors. "Once they do start to invest and expand operations and hire people, then unemployment will fall and people will have more income to spend. It creates this virtual cycle and gets the economy rolling."
U.S. Labor Secretary Hilda L. Solis says the timing is right for employers to start hiring. "Hiring can induce spending, and spending can incent hiring. Hiring is thus not only the right thing to do, but the economically sensible thing," Solis said in a written response to HR Magazine questions.
Labor Department's Job Outlook
Labor Secretary Hilda L. Solis said she expects more companies to be hiring in 2012.
Since February 2010, 2.8 million new jobs have been added in the private sector, and more than 1 million of these have been created since January 2011, Solis noted.
"We have seen stable growth in the creation of jobs, and we expect to see job growth continue in 2012," Solis said in a written response to questions from HR Magazine last November, when this magazine was being prepared.
"The only sectors where growth is not occurring at a fast enough pace to keep up with layoffs are the government and construction sectors," she stated. "Since April 2009, federal, state and local governments have lost more than 700,000 jobs. In fact, had these government jobs not been lost, our unemployment rate would be significantly lower."
In the fall of 2011, government and private employers reported dramatic declines in planned layoffs, she noted. "That's a positive sign and should indicate that businesses are past the point of shedding jobs and will need to start hiring again if they want to boost production. In the last quarter, gross domestic product grew at twice the pace of the previous quarter. Since employment lags gross domestic product, this increase should foretell an acceleration in job growth," Solis stated.
The United States has experienced longer "jobless recoveries" after recessions in the past two decades. Before that, employers sacrificed some productivity and profitability until demand returned, McKinsey researchers say. Today, employers respond primarily by cutting jobs. In the McKinsey survey of 2,000 business executives, 65 percent reported that their companies made operational changes to improve productivity and reduce employment in the past three years.
In 2011, productivity grew to the point that about 7 million fewer workers were producing the same amount of goods and services as before the recession began, according to a study of midmarket executives released in October by Deloitte Growth Enterprise Services. Forty-five percent of the 696 business executives polled, whose companies earn $50 million to $1 billion annually, said that their company's need to become more productive is restraining new hiring.
"Executives have indicated that if they were able to become more productive and increase profitability, their No. 1 action would be to undertake strategic hiring in critical areas," says Tom McGee, national managing partner of Deloitte Growth Enterprise Services.
At what point will companies reinvest profits into expanding their workforces? The answer depends, in large part, on how long business leaders think they can increase productivity by investing in technology over talent, McGee says.
"Hiring is on the minds of midmarket executives, but improving business processes and investing in technology is higher on their lists," McGee says. "Until we see more-sustained levels of economic growth, it is likely that hiring among midmarket companies will not be robust."
Boost Productivity
HR professionals can help their companies increase productivity by using in-depth workforce analytics to look for ways to be more efficient and save money, says Deb Cohen, SPHR, senior vice president of knowledge development at the Society for Human Resource Management (SHRM).
It's not just about collecting statistics. "It's about knowing what to do with the information once you have it. And it's about leading the organization in a way to use the information to create value and competitive advantage," she says.
For example, a young manager at a large company used analytics to propose that the company put solar panels on its roofs and use the energy cost savings to invest in research and development that could produce more jobs down the line, Cohen says. The idea produced one job right away: The employee was named to the new position of director of sustainability within HR.
Innovation is frequently cited by economists as a way for business leaders to boost productivity and stimulate growth. The most innovative companies are the ones where employees are encouraged to take risks without the fear of being punished if they fail, Cascio says. "HR professionals need to ask themselves what they can do to change the way people are managed" to create that kind of culture.
Cubist Pharmaceuticals Inc. in Lexington, Mass., is experiencing rapid growth, adding 75 jobs a year. "Our whole business depends on innovation," says Maureen Powers, senior vice president of human resources. To encourage it, the 650-employee company allows any scientist at any level to pitch an idea. If the idea is deemed to have merit, the scientist is given time to work on it. Scientists spend 10 percent to 25 percent of their time thinking about new medicines.
Supervisors receive feedback from employees on how well they encourage innovation and risk-taking. "You've got to take some risks, and you've got to experience failure" before you hit on a great new idea, Powers says. The attention to innovation has led to several new products in the pipeline—and more employees in the clinical department to work on them, she says.
HR professionals also contribute to productivity by making sure their companies hire the right people.
SVM, a gift card company in Des Plaines, Ill., added six positions last October—a significant number for a company of just 61 employees, says HR Manager Casey Swartz. She works with managers during the hiring process to determine what skills they need to supplement their staffs. And she asks questions to determine what skill sets they'll need in the future.
"A large portion of what we're responsible for is the quality of the candidates," says Swartz, adding that talented new hires will help the company continue to prosper.
Give a Hand
Across the country, many HR professionals are making a personal effort to help the unemployed by volunteering their professional skills with various groups. Members of the Greenville, S.C., chapter of SHRM last year conducted two to four workshops a month for adults seeking to brush up on their job search skills. The HR professionals reached more than 600 adults.
This January, the chapter's members planned a "train the trainer" day. They invited staffers from employment service offices and nonprofits as well as volunteers from faith-based groups who work with the unemployed, offering to help update their training materials. "We're going to teach them so they can go back and work with their clients," says Laura Harmon, a chapter member and program director at Greenville Works, a group of local, state and federal organizations partnering to improve workers' skills.
For the HR professionals who volunteer, "This is a hands-on way for them to make an impact on the quality of their current and future workforce, and that directly impacts them because they want quality workers," Harmon says.
In Peoria, Ill., HR professionals are teaching at-risk youth basic interviewing skills and on-the-job etiquette.
"Our juvenile crime rates were pretty high, and gang presence is increasing," says Michelle R. Agnew, SPHR, president-elect of SHRM's Heart of Illinois chapter and HR manager for the American Red Cross Mid-America Blood Services Division.
Chapter volunteers worked with Peoria Park District officials on a 10-week program to prepare high school students for employment. The volunteers conducted mock interviews and provided feedback. They also reviewed every student's job application and resume.
Agnew says she was moved by one girl who came from a dysfunctional family and had no goals. No one had ever encouraged her. After going through the program, the girl told volunteers she wanted to become a nurse so she could help others, Agnew says.
A side benefit from the program: The chapter grew from 60 to 90 members in 2011. "When you're doing something exciting and being recognized, people want to get involved," she says.
For each of the past three years, members of SHRM's Raleigh-Wake Human Resource Management Association in North Carolina and the Triangle SHRM chapter in Durham, N.C., have volunteered to answer more than 1,000 job seekers' questions during a seven-hour telethon-style event called "Human Resources on Call." Portions are televised to more than 1 million households in 23 counties.
However, members of the Raleigh-Wake chapter also wanted to help a growing number of HR professionals in the area who had lost their jobs. "If we couldn't find a job for them, at least we could provide a support group," says chapter president Jeff Luttrell, SPHR. The group, called "Members in Transition," meets monthly. The unemployed HR professionals hear speakers who help keep them motivated in their job searches and up-to-date in their skills. They also share job leads. Luttrell says employers contact him at least once a week about openings, which are then posted on the chapter's website.
The chapter's initiatives to help residents find work are popular among members, Luttrell says, noting "People want to help."
Build Better Skills
Even while some 14 million Americans are looking for work,
52 percent of employers say they can't find qualified workers to fill open positions, according to a 2011 study by ManpowerGroup. Economists say the official unemployment rate could be lowered 1 or 2 percentage points if those current vacancies could be filled.
‘Hiring is ... not only the right thing to do, but the economically sensible thing.’
—U.S. Labor Secretary Hilda L. Solis
"We still have nearly 3 million jobs going unfilled in this country, across a variety of industry sectors, and numerous studies continue to show that employers are struggling to find the right people," says Karen Elzey, director of Skills for America's Future, a national initiative to help connect employers with community colleges to ensure that students are trained in needed skills.
As many as 600,000 skilled manufacturing jobs—5 percent of the total—are vacant because employers say they can't find qualified workers, according to a survey by The Manufacturing Institute and Deloitte Consulting LLP. Positions for machinists, operators, craft workers, distributors and technicians have become more complex with technological advances in manufacturing.
Skills Gap or Training Gap?
It's unfair for employers and recruiters to blame schools or displaced workers for skills gaps, argues Peter Cappelli, a management professor at the University of Pennsylvania's Wharton School and director of Wharton's Center for Human Resources. Jobs are going unfilled because many employers don't want to invest in training or don't want to pay what qualified applicants are asking. One company had 25,000 applicants for a single engineering position, but still claimed it couldn't find anyone deemed "qualified," he says.
"HR people can't create jobs, so the question is 'Can you think more creatively about how to fill these jobs?' " Cappelli asks. Instead of writing off a candidate because he or she isn't a perfect fit, Cappelli suggests HR professionals ask, "What would it require for them to be a perfect fit?"
To address the problem, The Manufacturing Institute has worked with Skills for America's Future and the President's Council on Jobs and Competitiveness to produce an accelerated certification program that is taught at community colleges to prepare individuals for immediate employment in machining and metalforming.
For such training to be useful, HR professionals must readjust the way they search for people to fill the positions, says Jacey Wilkins, spokeswoman for The Manufacturing Institute, an affiliate of the National Association of Manufacturers. Many smaller employers rely on word-of-mouth to find applicants for hard-to-fill positions, according to a recent institute survey. Community colleges were at the bottom of the list for potential sources for workers, she says.
Skills for America's Future, launched by President Barack Obama in 2010, is led by the nonprofit Aspen Institute. McDonald's, Accenture, Gap Inc., Pacific Gas and Electric, and United Technologies were among the first companies to participate by sharing with community colleges the training programs they've developed.
McDonald's Corp. has developed English-language courses for its employees that allow them to learn via webconferencing while at work.
"We knew we wanted to help folks improve their English. The challenge is that when you're working two full-time jobs and have a family, it's not always convenient to attend community college," says Betsy Clark, director of HR education strategies for McDonald's USA.
Partnering with English-language instructors at colleges, the company designed curriculum to teach language skills needed to manage restaurant operations and staff. "If you teach language in terms of something that's important to someone, they retain it and they really want to learn it," Clark says. About 1,600 employees have taken classes since the program began in 2007, and the program has a 90 percent graduation rate. McDonald's is making its virtual classroom model available to community colleges.
HR professionals are also reaching out to universities and even high schools to expose young people to careers in their industries, which helps to ensure that their organizations have qualified workers in the future.
Capital Caring of Arlington, Va., a nonprofit that provides hospice and palliative care, recently forged a partnership with West Potomac High School in Fairfax County, Va., to allow students interested in health care careers to talk to clinical staff members and shadow them in their jobs. "We look at it as an investment in the community. We certainly are counting on it raising interest in the health care fields," says Deborah Carl, vice president of HR. With demand for services growing rapidly, the organization expects to add up to 25 positions to its current staff of 700 employees this year.
At Cobb-Vantress, Padgett and his HR team develop the staff they have. When employees move up the career ladder, they create spots for new employees. "You have to develop what you have, but you've also got to go out and get new talent," he says.
As Congress and economists debate what government can do to stimulate job growth, Padgett and others like him aren't content to wait. He finds it more rewarding to be proactive, to help people into jobs, than to hand out severance. He says, "I love coming to work, and I love what I do. I feel very fortunate to have ended up where I'm at. I don't take that for granted."
The author is SHRM’s manager of workplace trends and forecasting. Click here to see the 2012 Trend Book.