CHART OF THE DAY: The World Economy in 2030

Today's Chart of the Day comes to us courtesy of Bloomberg - a look at the World's 20 largest economies by GDP, stacked up and showing both their relative sizes today, and the estimates for where the Top 20 will rank by 2030 - just 15 years from now.

As always, we will hit you with the chart, then some FREE commentary from me (it is my blog) after the data:

So for the HR/Talent pro what is there to make from the data on the World's largest economies in 2030?

Three things come to mind:

1. Look around. If you and your organization is US-based, or derives its sales and income primarily from US customers, you probably have a few years, maybe as many as 10, before you need to really worry about how these shifts in size and scale might impact your business and livelihood. You might be ok for a while, maybe for a long while, but if double-digit growth in sales and income in on your organization's 5-year plan, then it is going to be really challenging to achieve that target unless you start (or increase) the business you are doing in the faster-growing countries of the world.

2. China. Of the Top 20 economies China is expected to grow the most in the next 15 years, coming really, really close to topping the US as the world's largest. What are you doing today to help your organization better prepare to compete for your piece of this huge and growing market? Do you have the right kind of talent that can work in and understand this market? Are you able to talk confidently about the unique HR/Talent challenges you'd face, both with managing expats as well as recruiting locally?

3. Slow growth in the old world. Places like Germany, France, Italy - heck, pretty much all of Europe are predicted to grow much slower, and thus make up a smaller portion of the world economy, over the next 15 years, than emerging powers like India, China, and Brazil. This is not really news, but again for the most part in the US we still tend to think of Europe and European countries as having much more influence in the global economy than perhaps we should.

No HR pro lives in a vacuum. No organization operates completely immune to the larger market forces that surround us all. It's important to know where the future might take us, and perhaps even more important to know how to speak the local language when we get there.

Have a great weekend!

In Soviet Russia, (and America), Job Finds You

For a 'don't believe anything you read on the internet' April Fool's Day, I submit for your consideration a really interesting, (and totally not made up), conclusion about how people in the United States find jobs courtesy of a recently published Economic Letter from our pals at the Federal Reserve Bank of San Francisco.

Let's start with the researcher's money line first, then we will try and unpack it a little bit:

More than three-quarters of workers who switched employers did not report active job search in the previous three months.

Did you take a second to process that statistic? 

Of all the 'new hires' that the researchers examined, 77.6% of them had not reported being in an active job search in the previous three months. And we are not talking about internal job transfer types of moves here, these are employer-to-employer job shifts. So the vast majority of job-to-job transitions do not follow the standard interpretation of a labor market that matches workers who are actively seeking out job openings with the positions that are posted by employers.

So essentially, according to this research, over three-quarters of hiring is coming from direct recruiting/poaching, referrals, and informal networks.

Probably not a great surprise/finding for experienced HR/Talent pros, but a good reminder for folks who are still out there beating down doors in an active job search. Here's a summary of the data from the research, then one last point before we sign off.

The researcher's data shows that while 77.6% of hires are coming from employed folks who were not searching for a new job, that still only constitutes about 2% of all employed people. Translated - your recruiting/poaching/referral processes are still only nabbing less than 2% of folks out there, underscoring how hard it can be to identify, engage, convince, and finally hire people out of existing jobs into new ones at your company.

Net-net: At least according to this research, most jobs find people, not the other way around.

Have a great April Fool's!

CHART OF THE DAY: The Misery Index

Spotted on the Pragmatic Capitalism site: The Misery Index Falls to an 8 Year Low.

First the chart, then a quick explanation of The Misery Index itself, and finally, of course, some FREE 'expert' commentary on what if anything this kind of data means for HR/Talent pros.

Chart:

The "Misery" index is the sum of the rate of inflation and the rate of unemployment. It’s name is apropos because a high rate of inflation combined with a high unemployment rate are miserable things to experience. Where is the Misery index currently? It sits at an 8 year low. And perhaps more tellingly, today’s Misery index level of 6.9% is well below the 70 year average of 9.5%

Indicative of improving economic conditions in the USA overall, we see this reflected in the declining rate of the Misery Index. Times may not be great, and the economic recovery is certainly unequally distributed, but certainly for most the worst years of 2008 and 2009 seem pretty far away at this point.

What might the 'Misery' index have to tell the HR/Talent pro?

One thing that comes to mind is that our perception of satisfaction or happiness and even (sorry to use the word again) engagement at work is derived from multiple and complex sources. In HR we talk plenty about engagement rates and trends and voluntary turnover and percentage of job offers accepted, but we usually only talk about these metrics in isolation. 

We compare this quarter's engagement rate with last quarter's rate. We look at the trend line in voluntary turnover as if this phenomenon exists in a vacuum, and is not impacted or effected by other business conditions.

We are measuring more things, but probably not getting the deep levels of insight that measurement once promised. 

The Misery Index is a crude way to acknowledge this truth, that inflation alone or unemployment alone, don't provide all the answers as to the relative health of an economy, and consequently, the 'misery' of its citizens.

In the workplace, perhaps we should consider our own versions of the Misery Index. Graph disengagement rate AND voluntary turnover rate together and show that to your CEO. Or maybe do a trend line with average annual salary increase against recorded absence rates to see if your 2.3% salary increases are potentially contributing to people checking out.

Misery, (and I think, happiness too), is a complex thing. Thinking about either of them in one dimension leads to shallow understanding and conclusions of limited value.

Plus, what is making me miserable today isn't even on any of these charts. Hint: It NEVER stops snowing where I live.

Happy Tuesday.

REVISITED: For American workers, the quits keep coming

Back in February I posted CHART OF THE DAY: The Return of the Quit, a look at the increasing rate of 'quits', (HR nerds can call them 'voluntary separations' if that makes you feel better), across the American labor market.

Back in February, the news was that quits were rising from the financial recession low point of 2009-2010, reflecting growing individual confidence in the labor market and consequently placing pressure on organizations to develop retention, replacement, succession planning strategies.

Fast forward about nine months to the latest data on quits, (Note: this data comes from the Bureau of Labor Statistics JOLTS (Job Openings and Labor Turnover Survey) report), and the story about quits continues to play out along the same lines as I talked about in February. 

I'm going to hit you with the updated data below, then revisit my (FREE) commentary after the jump. I actually think all the points I made about th February data still apply in November, the question really being if we as organizational talent pros are paying enough attention to this data.

Here is the latest data, showing the Quit rate climbing to about 2%:

Some thoughts:

1. 'Quits' are a function of several factors, (personal circumstances, the magnitude of the jerkitude of your managers, people self-selecting out as not being in the right job, etc.), but most observers of the Quit rate on a macro level ascribe movements in the rate to worker's confidence in their ability to find another, and what they think will be a likely 'better', job.  The rate moving up, to a level that is approaching the pre-recession level, is a signal that overall job market confidence is rising.

2. So while you and many other HR/Talent pros are lamenting about 'hard-to-fill' jobs, simultaneously more of the workforce are thinking of themselves as 'easy-to-place'. I'm not sure how that apparent paradox will work out, (probably very differently depending on location, skills, etc.), but it is kind of interesting and amusing at the same time.

3. How you are thinking about and reacting to news of a good employee quitting is probably changing too. In 2008 or 2009, you might have reacted by thinking, 'What is she crazy? Where is she going to find another job with as good pay/benefits/cupcake Friday like we have here?'. Now? Probably you'd think more along the lines of 'Hmm... She's going to XYZ Corp? I wonder if she could bring me over there too.'

4. Last, while the Quit rate increasing kind of feels like it is a good thing, there is certainly some warning signs as well. For one, those recent quitters might find that their skills and experience are not in as high a demand as they figured, and thus end up spiking the unemployment rate in the short term, (as well as having to take a boatload of grief from people questioning their sanity for quitting a perfectly good job). They might find, even today, that keeping a job is much easier than finding a job. And increasing worker confidence might put pressure on companies to increase wages, which can also have a detrimental effect on growth and profits.

So take a look at the JOLTS report if you are interested in this kind of data, I think it gives a little more color and depth to the more widely reported headline of the total rate of unemployment.

Are you seeing an increase in 'quits' in your shop?

Ready to quit yourself?

Have a great week!

ECON 101: What do falling oil prices mean for you?

I am a big mark for finance, economics, business news, etc. And one of the most interesting business/markets stories in the last few months has been the pretty dramatic decrease in the price of crude oil, and probably more importantly to you, me, and our workforces, the corresponding fall in consumer prices for gasoline.

Check out the two charts below for some context: first, what has been happening with Crude:

How about the average price of gas? Here you go:

Pretty clear from these two charts what has been happening - crude oil has been on a pretty steep fall, dragging down the average price of gasoline along with it.

What might that mean for the savvy HR/Talent professional? Three quick hits, then I'd love your thoughts.

1. Compensation - the fall in gas prices is sometimes referred to as a 'free tax cut' for consumers. But if we spin that just a little, you can frame the drop in gas prices as 'off-cycle comp increase' for employees. Seriously, you can't actually say that out loud, but the truth is many of your employees have a few more dollars in their pockets each month. Maybe you (or a line manager) can feel a little more emboldened about calling back to the office some of your slacker telecommuters?

2. Operations - If you are in the business of moving any kinds of goods around the country/world, then you are seeing a pretty steep decline in transpiration costs. In the same way that a fall in gas prices puts an unexpected few extra $$ in each individual's kitty, the decline in costs for truck, rail, and eventually even air shipment costs will be a benefit to many organizations. Keep an eye on that line of your shop's P&L, (you do review the P&L each month, right?), and see if you can't time your request for a new HR system/program/technology along with a bump in margin.

3. Oil and Gas industry - Opinions seemed mixed on the overall impact to the US oil and gas industry, which has seen a remarkable renaissance of sorts in the last decade. At some point the price of Crude could fall to a point that jeopardizes domestic production. We are probably not (yet) at that point however. But there certainly could be a slowdown in the rate of growth in capacity and then the jobs that are being created in the US oil and gas sectors. 

It is pretty cool to pull up to the pump and see prices on a continual decline. Heck, you may even now be able to fill up the tank in your monster SUV for less than three bills.

But what is cooler still is to have an idea, an understanding, and an appreciation about what this kind of macro-economic trend means for your business and your employees. 

What do you think, have falling oil/gas prices made any impact in your HR shop?