The LinkUp Blog The Industry's Best-Kept Secret
In many industries, it’s common knowledge that if you want a big pay raise, you’re probably going to have to look for a new job with a new company. Even after years of loyalty, companies tend to underestimate the potential of internal staff and instead hire external candidates whose skills, they hope, will bring new energy and productivity to the team.
But is this strategy paying off for companies, or is it better to promote from within? Furthermore, how do these actions affect existing staff who get passed by?
A fascinating study, titled “Paying More to Get Less” and published by Administrative Science Quarterly, found that although external hires are paid about 18 percent more, they scored worse on performance reviews and were 61 percent more likely to be fired from their new jobs than their internally promoted counterparts.
Every situation is unique, of course, and there will be times when no internal candidates are qualified for a particular role. If there are hardworking employees that could be a potential match, however, it appears that any hiring manager who overlooks them would be making a big mistake. Even if fresh candidates are highly qualified in regards to the skills they bring to the table, it can still take one to two years to get up to speed with important components of success, such as trust, relationship building and aligning with the corporate culture.
While the allure of bringing in new blood in hopes of revitalizing a team can be difficult to resist, it’s important to look at all your options in order to make the right decision. Here are four ways that internal candidates trump external talent:
Productivity: Internal employees already know the company and its procedures. Even if some training is required for the new positions, they will be more productive more quickly than a fresh face.
Reputation: You already know this person’s work ethic and how he or she collaborates with other employees. Knowing the strengths and weaknesses of an employee ahead of time is a huge asset.
Cost: In addition to often paying more for salary, there is also added training and lost productivity to consider. This means it often costs a company much more to hire externally.
Loyalty: You know internal staff are more loyal because they have a history with the company. Hiring from within boosts morale for the whole team; hiring externally can cause worry.
These compelling reasons aren’t just valuable for companies, they can be great points for employees who want to make the argument that they are the best candidate for a promotion. If you want to be considered for a job opening, have a candid talk with your supervisor and/or head of HR. Bring hard numbers about your productivity, know why you want the position and mention your tenure. These things alone can make a compelling case.
What about getting paid less than an external candidate to do the same job? It’s a topic that should be addressed head-on. Existing employees should have the confidence to negotiate salary if they are applying for a new internal position. You might already know the pay scale based on the job posting, so make sure you get an offer within that range. If that information is not advertised, research what people in that position are getting paid in the local market, and share those numbers to back up why you feel you’re worth more. Remember, you are your biggest advocate for a promotion and adequate pay, so make sure to share your thoughts in a professional manner.
It’s no secret that searching for a new job takes a lot of time and energy. Beyond dedication and determination, finding a new position often requires a financial investment as well. So how much cold hard cash do you need to land the job of your dreams?
While the numbers vary from one person to the next, here’s some insight into the expenses that many people incur as they seek out a new job:
Resume writing services
A resume is a critical marketing tool when finding a job, so some people decide to hire a professional to create their resume to ensure it’s in tip-top shape. Costs vary depending on factors such as the writer’s experience and the time required to complete the project.
Travel and lodging
Likely the most common expense of job searching, the cost of travel and lodging can vary greatly. Whether you’re paying for gas to drive across town for multiple interviews or footing the bill to fly across the country to meet an executive team, it can add up very quickly.
With so many workplaces moving to a more casual dress code, you might find yourself short on options when it comes time to dress up for an interview. You want to make a good impression so you pick up a new suit or other type of professional attire.
Feeling stuck? Career coaches can give you third-party insight that can revamp your career. Their services can be particularly helpful for some during the job-hunting process, but good ones come with a cost similar to hiring a lawyer.
Cost: $1,500 – $10,000 (for senior executives)
Outplacement services help laid-off employee find new positions. Services can include career counseling and job-hunting assistance. While some people decide to pay for these services themselves, a previous employer may foot the bill as part of a severance package.
Cutting costs and giving yourself an edge
As you an see, it can be costly to try to find a new job while attempting to stand out from the competition. And these numbers don’t incorporate the cost of lost wages if you’re unemployed. Fortunately, there are numerous ways you can manage these expenses.
1. See what you can get for free
If you’re fresh out of college, the school’s career center will likely offer many of these services for free. For others, some community organizations make services like these free or highly discounted to those actively searching for employment. Your local library is a great resource as well, plus you’ll find free WiFi. A small bit of research can save you a big amount of cash.
2. Shop around
If you’re looking to hire services for things like resume writing or career coaching, take time to shop around. Everyone’s rates are different. You want to hire someone you can trust with experience and a reasonable rate. Some people might offer discounts for special circumstances, such as if you are a veteran. If you’re not finding what you need, leverage your personal and professional networks instead of hiring out.
3. Know your tax deductions
There are a variety of tax deductions that you might be able to claim to reduce job costs. Things like travel, outplacement agency fees, and even the cost of mailing resumes may be deductible if you are looking for a job in your current field. To determine your deduction, use Schedule A, Itemized Deductions. The amount of your miscellaneous deduction that exceeds 2 percent of your adjusted gross income is deductible, according to the IRS. Learn more at http://www.irs.gov/uac/Job-Search-Expenses-Can-be-Tax-Deductible.
Earlier this week when we published our forecast for Friday’s December jobs report and I sent out a few Tweets with the always-entertaining hash-tag #NFPGuesses, Joe Weisenthal of Bloomberg asked what our track-record was in forecasting the monthly jobs numbers.
I provided him with a brief response that we were off 1.9% from the YTD BLS numbers, but indicated as well that I would write a blog post that provided a bit more detail regarding our 2014 track record in forecasting the monthly jobs numbers. As such, I will provide no additional commentary, but rather simply publish below the charts and graphs that we maintain to track the accuracy of our forecasting model.
YTD, we are off 1.9% from the BLS Data as compared to the Bloomberg consensus estimate which is off 13.4%.
The monthly data provides additional detail about our variance from BLS.
We also give ourselves a monthly grade based on not only the quantitative measure but also the narrative around each of our forecasts each month (which can be found in our monthly forecast blog posts). This is obviously hugely subjective and completely self-graded, but it does provide some insight into how we assess our own track record each month.
And as far as tomorrow’s Employment Situation Report, our forecast is quite a bit below consensus. Although our 170k call is not the lowest, we are definitely an outlier on the downside. With the ADP and jobless claims data this week, it’s anyone’s call what kind of number we’ll see tomorrow.
If it’s time for your annual review, it probably goes something like this: you meet with your supervisor in a private room, he or she rates your performance using a variety of scales, you talk about where you need to improve in the future, and at the end you learn if you get a pay increase.
It’s no wonder most workers dread this process!
Beyond being ineffective, annual reviews can actually have many negative consequences. These one-sided conversations can diminish the employee-manager relationship and reinforce hierarchy within an organization. Traditional reviews often don’t give employees any helpful information about about how to do their jobs better, nor do they motivate them to strive for more. They can hurt a team’s dynamic and its ability to work cohesively, cause unneeded stress and often leave employees feeling unappreciated.
Annual reviews are like an ancient tradition. We keep doing them, but we really aren’t sure why except that it’s what we’ve always done in business. But more and more people are arguing it’s time for a change, and there are many alternatives for innovative companies willing to think outside the box.
Alternative methods for reviewing employee performance
Start a conversation between HR, management and any other important parties about the effectiveness of the current system. Then brainstorm how it can be improved. This might entail an overhaul that completely abandons annual reviews. It also could mean a fresh approach to the current process to make it more effective and more likely to produce a positive outcome. Here are three ideas to get “the talk” started:
1. Why annually?
Employees work all year long – why are they reviewed just once a year? Build a better relationship between employees and managers by having one-on-one meetings more regularly. For some companies this means once a month and others once a quarter. Additionally, always maintain an open-door policy so things can be discussed even when a meeting isn’t scheduled. Additionally, kill annual performance raises and instead adopt merit raises that can be earned at any time, not just once a year.
2. Key in on collaboration
Skip whatever rating system your company has and make reviews more conversational than judgmental. Be honest with employees, and let them voice both their joys and concerns at work. You both should talk about the job and where improvements can be made; two people working together in a trusted manner can uncover some truly remarkable things. Be a coach and work on how you can strengthen your team and build up morale and engagement!
3. Make reviews a team effort
Traditional reviews can seem pointless to employees because they come from supervisors who are not really in touch with what they do on a day-to-day basis. While meetings should still be led by managers, why not ask for feedback from the team beforehand? Peer review can be powerful, plus it’s a meaningful way for others to show their positive feelings about the employee in addition to any areas for improvement. Best practices are to keep peer feedback anonymous so it’s most useful.
Do you work at a company that has a modern take on the annual review? How do you feel these approaches benefit employees and the company as a whole?
Will you be making New Year’s resolutions for 2015? While 50 percent of us make resolutions each year, just 8 percent are actually successful at achieving those goals. This year, it’s time to do something different.
When it comes to your career, there’s no better time to take stock and set goals than the start of the year, but that doesn’t mean setting the bar so high that the outcome is virtually impossible to achieve. These 10 resolutions will supercharge your career and position you for success in the new year, and the best part is they are so simple, they are practically fail-safe.
1. Update your professional online profile
Don’t have a LinkedIn profile? Get one. Have one but never sign on? Resolve to do so regularly and become an active member. Update your information, load a fresh head shot and strive to make connections or post at least once a week in the new year.
2. Join an industry association
Become a member of a local industry association and start networking. Make it your goal to attend events at least quarterly. Perhaps you’ll learn new things and meet new people who can help you advance your career and grow your reputation.
3. Define career goals
In college, you had a map for completing your degree and you assessed it regularly to ensure you were on track. Now that you have a career, when is the last time you defined goals and paths for achieving them? Ask yourself where you want to be professionally in one year and five years, and brainstorm ideas for getting there. Write it down and reference it throughout the year!
4. Be proactive and ask for new responsibilities
It’s easy to get stuck in a comfortable rut at work, but that often doesn’t grow your skills or put your name at the top of the promotion list. Resolve to be proactive and ask for new responsibilities rather than waiting to be told. Your initiative will get noticed, plus you can propose projects of interest to you so you are more engaged with your work. Lead meetings, publish an internal newsletter or start a company book club; the sky’s the limit.
5. Brush up on skills
You don’t necessarily need to head back to a university to further your education, just look at non-credit career courses through local colleges, industry associations and even community education sources. A few affordable classes can boost your career development and give you an edge in the workforce. Bring it up to your boss and your employer might even pay for it!
6. Embrace criticism
Some of the most successful people are those who embrace criticism rather than getting defensive about it. When someone tells you about a mistake your made or how you can do something more efficiently, keep an open mind, be thankful for the critique and learn. Criticism is not the enemy, and when used correctly, it can be an big ally in growing your career.
7. Use your PTO
Think this will be an easy resolution to keep? Studies show that more than 40 percent of American workers do not plan to use all of their PTO. Time off provides important mental and physical breaks from your job, so use it when needed; it’s part of your compensation package, after all.
8. Be more visible
Aim to be more visible to your boss and within the organization as a whole. Resolve to get more face time with your supervisor and be more active at company events. Contribute input at meetings, attend social gatherings and offer to organize company functions. Consider again employee programs you previously dismissed, such as group luncheons, mentoring opportunities and company-sponsored clubs.
9. Complete tasks before deadlines
Meeting deadlines is a critical part of doing your job well, but what if in the new year you try to complete tasks early? This initiative is sure to get noticed among colleagues and supervisors. While not always possible, plan ahead and meet goals early in the new year for a big career boost.
10. Praise others
From the over-achieving intern to the sales lead who just closed a killer deal, make it your goal to praise others more often while at work. This will help bring you closer to your colleagues, increase collaboration and get you more respect. Plus, a positive attitude is contagious, so you may just find your work atmosphere a bit happier in the new year; you’ll be the one leading the way.
Yes, precations are a growing requirement at companies across the country, and some argue this requirement benefits the new employee and company alike. You may have never heard of it before, but I bet if you were offered a precation, it certainly would catch your attention.
Innovative companies and those in highly competitive industries are pushing the boundaries beyond traditional benefits into new and often unexpected places in order to lure top talent and build a strong reputation. A precation is an example of what is coming out of this movement, and we all might be hearing more about it in the new year.
Why would a company want to offer a paid vacation prior to an employee’s start date? Traditional belief is that PTO is a reward for those who work hard, providing them with time off to do what they love. And these new employees haven’t even logged an hour yet!
The reality is that Americans work more than anyone else in the industrialized world, according to ABC News. That means longer work days, fewer vacations and, often, delayed retirement. All this work can cause extreme burn-out and dissatisfaction, both of which are reasons an employee would seek new employment. That’s a great opportunity for a new employer to scoop up valuable talent, but who wants someone starting who is already burning the candle at both ends? Instead, you want someone who is energized, passionate and ready to go, and a precation is the perfect way to prepare employees to start a new job on the right foot.
Think about it: in highly competitive fields, employees often skip vacation in order to stand out or simply keep up with day-to-day demands. In fact, Americans in general are skipping valuable PTO at alarming rates! A traveleffect.com survey found that despite 96 percent of people recognizing the importance of using PTO, a shocking 41 percent of American workers do not plan to use all their paid time off in 2014, even though it is part of their compensation.
We’re skipping our vacations and time with family to work, and it’s causing extreme stress. A precation is the perfect solution and ideal way to lure talent at what typically isn’t an overwhelming cost to a company’s bottom line. Some believe the investment early on pays dividends in increased productivity and employee loyalty down the road.
What are your thoughts on the growing availability of a precation benefit? What other innovative benefits have you heard companies offer in order to lure talent and position them for success? Please leave your answers in the comments section.
The holidays are typically a welcome time of year at any office. The hustle and bustle of closing up Q4 paired with tree decorating, holiday parties and other breaks from the norm can all combine to help people bond and get to know each other outside of the day-to-day routine. In fact, you may be feeling as jolly as Old Saint Nick himself with all the good cheer in the air… until you realize that your workplace does an office Secret Santa exchange.
If you’ve never participated in one before, the program works when each person in a group is randomly assigned to shop for another person anonymously. You might be tempted to opt out of such a program, but you don’t want to come off as the office Scrooge. Why not say yes and read on to learn what you can expect?
Rule 1. Be thoughtful
Don’t take yourself too seriously when figuring out what to get for your Secret Santa, but do give something you genuinely think the other person would like. If you’re assigned to shop for your best bud at work, you can probably get something you’ll both find funny. If you’re assigned someone you really don’t know well, ask around to learn what she might like or get something that is broadly appealing. Avoid anything that might be misinterpreted or thought to be in poor taste!
Rule 2. Know and respect the budget
This is not the time to show off by spending more than necessary. The budget is there so that everyone is on an equal playing field. Be mindful by not going over the maximum amount. The Secret Santa program is about others, after all. Spending more will most certainly backfire.
Rule 3. Get creative with gifts
There are a lot of unique and appealing ideas for Secret Santa gifts. Check out a few of our favorites:
$5 and under
Five bucks doesn’t go far, so you really have to maximize your dollar. Homemade gifts are great for this amount, so whip up your famous fudge or tie a ribbon around that jam you recently jarred.
If you’re not so much the “homemade” type, here are a few fun ideas that are sure to bring a smile for $5 or less:
Note: A quick trip to your local dollar store can also provide plenty of inspiration for affordable gifts that will make a big impression.
$10 and under
Gift cards rule the $10 and under category. Think about getting a certificate from local haunts, like that independent coffee shop down the road or your co-workers’ favorite happy-hour spot. But don’t just go generic and leave the gift card in an envelope; jazz it up with a little something extra like a piece of candy, a sprig of evergreen or a holiday-scented candle.
$20 and under
A fail-safe gift for the $20 and under category is a fun new mug paired with bag of coffee beans or some tea. The mug could be holiday themed, feature something you know the recipient would enjoy (cat or dog lover?), or say something comical, like this one that cleverly references the movie “Office Space.”
Books are another option if you know what the recipient would enjoy. When in doubt, cookbooks or cocktail guides can be a festive option for the Secret Santa game. We enjoy these options:
- Weeknight Dinners: Meatless Monday, Tex-Mex Tuesday and more
- Tequila Mockingbird: Cocktails with a Literary Twist
- 100 Days of Real Food
- Big Bad-Ass Book of Cocktails: 1,500 Recipes to Mix It Up!
For those of you who have done Secret Santa in the past, what was the best gift you received? Please leave your answer in the comments section.
The new year is just weeks away. As we look ahead to 2015, many industries have a positive outlook toward growth and hiring. Here are 10 hot industries positioned to hire exponentially in the next 12 months:
1. Health care
The health-care industry continues to grow, and many areas have a hiring demand that surpasses the available qualified talent. Thanks to an aging boomer population and a variety of governmental regulations aimed at the industry, this growth won’t slow down any time soon. A few particularly hot health-care jobs include registered nurse, physical therapist and health services manager.
A sure sign of a recovering economy, manufacturing as a whole is growing and the demand for qualified workers is high. From line workers and machinists to experienced managers and executives with extensive knowledge of supply-chain management, look for further manufacturing growth in 2015.
3. Digital marketing
Marketing as a whole is evolving and those with digital experience are often courted by multiple companies. Typically demand for executive positions like chief marketing officer and chief digital officer far outpaces the available talent. Skilled marketing professionals have experience in data analytics, mobile platform development and strategic digital outreach.
4. Mobile technology development
As more people rely on mobile to run their daily lives, tech developers with specialty skills are in high demand. Growth in 2015 is likely, particularly for developers with expertise in the Java programming language. Because Android phones rule the majority of the smartphone market, Android developers are in demand as well.
5. Cyber security
Major online security breaches make headlines each year, and due to the growth of the cloud and the public’s growing reliance on e-commerce, many businesses are investing in better cyber security. This means they will be hiring smart people who can ensure the customers’ and business’s information stays safe. Those with experience in information security and digital risk won’t wait long for a new job offer.
6. Human resources
As the unemployment rate goes down and industries across the board grow and regain hiring power, human resources becomes a particularly critical function of a business. Skills in talent acquisition and global HR management are sure to get noticed on resumes.
7. Finance and insurance
Confidence in the financial and insurance industries is growing. Professionals who can offer expert insight in the financial sector will see increased demand for their skills. Insurance specialists are also deemed valuable and will enjoy increased hiring in 2015.
Just a few years ago many governmental entities were making cuts in order to adhere to budget restrictions. Today, many areas of government are enjoying an improved outlook, which means anticipated hiring in 2015. Government is an area that might be particularly well-suited for entry-level positions, so recent college graduates should take note.
Just like governmental entities, the sluggish economy did no favors for the nonprofit sector. Donations were down, positions reduced and some nonprofits didn’t survive. Today, a growing economy means nonprofits are once again thriving and they need to hire experts to help with growth, donor relations and event planning, in addition to driving social change.
The majority of retailers are entering 2015 with an optimistic attitude, and so they need skilled help to ensure numbers stay in the black. Look for hiring to run the gamut from reliable team members on the floor to effective sales managers. As earnings grow, hiring will drive an overall industry boost.
In 1992, James Carville hung a sign in Bill Clinton’s campaign headquarters in Little Rock with the 3 key messages for the campaign. Those messages were:
1) Change vs. more of the same
2) The economy, stupid
3) Don’t forget about healthcare
Of those, the second became the defining theme of Clinton’s campaign and the relentless focus on the state of the economy under Bush helped Clinton win the White House that year. Carville’s mantra highlights one of the great truisms not only of American politics, but the American psyche itself. As goes the economy, so goes the general mood of the country, and understandably so.
But as recent evidence indicates, the most critical aspect of the economy as the driver of the American state of mind is jobs. It’s not GDP growth rates, corporate earnings, or the stock market, although each of those undoubtedly plays both a unique and interrelated role, but jobs. And right behind jobs is rising wages. There has been no greater contributor to the growing indignation afflicting the entire nation these days than the epic job losses during the Great Recession, declining household income over the past 15 years, and stagnant real wages for the past 30 years.
And while all of that seems patently obvious to some, it is truly amazing how little real attention Washington is paying to what has become, arguably, the defining characteristic of America over the past few decades. And as much as America’s indignation occasionally transforms into anger and outright hostility, it is equally as amazing how little sustained outrage there is given the severe and rising inequality in the U.S. and the grim economic circumstances facing a growing percentage of the country.
To be sure, the slowly improving labor market which has seen a net gain of nearly 2.3 million jobs so far this year has most certainly helped lessen the severity of the situation, but there is still much to concerned about, and no one should be celebrating quite yet. A disproportionate share of the job gains this year have been part-time and/or low-wage jobs, and until very recently, the decline in unemployment has occurred mostly because so many people had given up looking for work. Those factors have started to change for the better in recent months as the jobs recovery has picked up momentum, but wages still haven’t budged and that statistic has, of late, become the most closely watched labor market indicator among economists, particularly at the Fed.
But debates around the Beveridge Curve notwithstanding, what will drive continued momentum in the labor market, as evidenced by continued net job gains and eventually rising wages, is sustained labor demand. And how we evaluate labor demand at LinkUp is by looking at the nearly 3 million job openings in our search engine, all of which are published by companies on their own corporate websites (which means our highly unique data set eliminates old jobs, duplicate listings, scams, resume fishing, fraud, and other types of job pollution). And unfortunately, our data for November does not present a positive picture.
In November, there were 175,000 fewer new job listings on corporate websites throughout the country than there were in October, a sharp decline of 23%. Total job listings fell 6% from October, dropped by almost 120,000 from the prior month. Of course there is some seasonality in the data which we purposely do not remove, but even accounting for that, the employment situation appears to be getting a bit grim as we look ahead to December. What is particularly discouraging is that new and total job listings declined in every single state in the U.S.
In looking at new and total job growth by category, the picture is equally as bleak, with new and total job openings declining by 22% and 6% respectively.
It is in this table that we can see, at least partially, the seasonality in our data with new retail job openings decreasing by 30,000 from their peak in October and total job listings dropping by 26,000. Undoubtedly, there are other seasonal jobs mixed throughout other categories such as Supply Chain & Logistics, Hospitality & Travel, and Restaurant & Food Service, but the bulk of the seasonality factor is contained in the retail category and even factoring in the declines in that category, the November numbers are still horrible.
With the sharp decline in new and total job openings in our job search engine (which lists roughly 2.6 million job openings from 50,000 company websites across the country), our preliminary forecast for December’s jobs report (which will be released on January 9th) is a net gain of only 85,000 jobs. For our November forecast, we have to look back to our October data which showed a minuscule 0.5% increase in the blended average of new and total job openings on LinkUp that month. Based on that data, we are forecasting a net gain of 235,000 jobs for the November NFP number that will be released this Friday by the Bureau of Labor Statistics.
One last data point worth highlighting comes from our jobs duration report. Each month, we look at the all the jobs that companies removed from their corporate websites over the previous 6 months, presumably because were filled with a new hire, and calculate the average number of days that those jobs had been on the company’s corporate website.
Between April and October, that number had steadily declined from 51 days in April to 41 days in October which matches the increased traction in the labor market during that period. Unfortunately, that number jumped up to almost 44 days in November, further indicating a slow-down in hiring. That slow-down couldn’t be more evident when one looks at the monthly change in new and total job openings on LinkUp over the course of the year.
The average monthly increase in new and total job openings so far this year has been 4% and 3% respectively, but the trend line most definitely provides some cause for concern. We are definitely in for some turbulence ahead, and I wouldn’t be too quick to predict an imminent increase in wages or an accelerated timetable for a raise in rates by Janet Yellen. While we’ll certainly celebrate the 10th straight month of a 200,000+ jobs number on Friday, we expect that streak to come to an abrupt end in December.
If that makes you a bit depressed, cheer up with a clip of Bill Hader’s James Carville on Weekend Update.