Shift Turning Talent Pool Upside Down
When a dot-com goes belly up within commuting range of TheBrain Technologies Corp., engineering director Todd Schlosser gets “a glut of people” looking for work--and making a lot fewer demands than they might have a few months earlier.
The Santa Monica software firm’s newfound position in the market for computer programmers may not be an official economic indicator, but it does reflect the vagaries of this economic downturn.
Unlike other, more broad-based slowdowns, this one, so far, is picking winners and losers on the employment front, pummeling some industries--even certain companies within sectors--while leaving others relatively unscathed.
“It really depends what area of the economy you are in,” said Sung Won Sohn, the Minneapolis-based chief economist with Wells Fargo & Co.
The resulting paradoxical employment picture shows frenzied headhunting for people like proven executives, Web designers and parking-lot attendants, while layoffs are sidelining auto assemblers, power meter readers and e-tailers.
In this rapid economic shift, aspects of the talent market have been turned upside down. Only months ago, companies were routinely losing bidding wars for computer programmers to highflying dot-coms offering whopping salaries and perks. These days, those same companies are reeling in refugees from failed start-ups using something considerably less flashy: a steady paycheck.
“I still get some guys who want $120,000 a year for three or four years’ experience in programming,” Schlosser said. “But for the most part, expectations are coming down, and people are wanting to find situations that are more stable rather than jumping around from company to company.”
San Rafael-based Autodesk Inc., an 18-year-old software firm that regularly has job openings by the hundreds, is benefiting from the collapse of Bay Area dot-coms that used to make hiring difficult and lured away valuable employees.
“During the time period when the dot-com frenzy was at its height, people had multiple offers,” said Chief Executive Carol Bartz. “It was a seller’s market, so the whole attitude was different. Plus, some of the smaller companies were offering outrageous benefits for hiring--cars and all sorts of strange things.”
The number of resumes flowing into the company, which employs 3,300 nationwide, started to increase in August, and Bartz has hired back so many dot-commers that company insiders have started calling them “boomerangers.”
“We sent them off, if they were good people, saying they had a home back here. It doesn’t make sense to get all high and mighty and say, ‘You’ll never darken our doors again,’ ” Bartz said.
Crow-eating aside, the boomerangers’ tales of dot-com woe are serving as a retention tool. “They are coming back with some pretty crazy stories, and that actually offers us a bigger service than anything,” Bartz said. “If you’re sitting next to somebody who came back and tells you what happened, you’re not as likely to run out there next time.”
Autodesk boomeranger Katharine Nyhus has start-up stories aplenty. Her friends jokingly call her the “corporate angel of death” because all three of the Internet-related ventures she’s worked for have failed. “I’ve done three start-ups and been jostled around a bit,” she said, adding that if she ever considers a new company again, she will do things a bit differently.
“I would be pickier,” Nyhus said. “I’ve learned to ask questions like, ‘Do you have a business model? Does it include revenue?’ Not just, ‘That sounds like fun. I’ll be right over.’ ”
While techies may be a bit chastened by the emerging downturn, most of them are finding work. But victims of troubled start-ups like Hannah Jacobs, whose skills are not technical, are having a harder time. The Glendale woman was laid off in late November, only three months after she left her job as a credit fraud investigator to join an Internet site that searches for missing people.
Jacobs wants to remain in the investigative field to pursue her goal of becoming a private eye. She goes out on several job interviews a week, but has been unable to land anything more than mostly clerical temporary work.
“I feel discouraged,” she said.
Her experience is becoming more common, said Rick Junius, who manages the Southwestern regional offices of Lee Hecht Harrison, a New Jersey-based outplacement firm.
“Companies are doing a lot of interviewing but are really slow to make decisions,” he said. “That is frustrating.”
Junius said demand for outplacement services has picked up within the last few weeks. “We are definitely noticing a shift in terms of companies who, prior to the end of the year, were not forecasting downsizings. It’s been very quick.”
The most recent batch of official employment indicators is mixed, reflecting the economy’s current dynamism.
The unemployment rate for December remained at a historically low 4% nationally and dropped to match a recent low of 4.6% in California. Yet job growth slowed in the fourth quarter of 2000 to half the monthly average of the first nine months, and employers announced 1,697 mass layoff actions in November involving 216,514 workers, the most in that month since the government began tracking mass layoffs in 1995.
Wells Fargo’s Sohn said he expects the unemployment rate to catch up with other signs of economic retrenchment and, for many Americans, finding a job “will become more and more difficult.
“We are projecting a fairly significant economic slowdown with the jobless rate approaching 5% by year-end,” Sohn said. “That’s a pretty healthy jump.”
The mounting layoffs reflect a post-’90s reality of corporate America: Market pressure is so intense that companies with declining revenue can no longer hang onto employees as they once did to prepare for the next upturn, said John A. Challenger, chief executive of Challenger, Gray & Christmas Inc., a Chicago-based outplacement firm that tracks layoff announcements.
“We’re in a just-in-time workplace now,” he said. “They cut quickly and then hire like mad when work goes up.”
That reality hit Internet business services entrepreneur Craig Kaminer in September when investors and clients began to demand that start-ups show profits, prompting him to eliminate 19 of 119 jobs.
“It’s very difficult to grow a company very fast and be profitable, so you have to choose,” said Kaminer, chief executive of St. Louis-based Influence. “Now you don’t have that choice. It’s just, ‘Get profitable. Be profitable now.’ ”
Brent Hawkins is engaged in a similar struggle to keep the doors open at the Shasta Paper Co., the third largest employer in the Northern California county of the same name and the state’s last integrated pulp and paper company. He announced the layoffs of 65 workers after shutting down for two weeks in December when the company was hit with shrinking demand and soaring energy costs--the latter being the wild card of this slowdown.
“I feel like a soldier crawling down a gravel road with a convoy of trucks going over my head,” said Hawkins, who has been in the paper business for more than 20 years. “I’ve never seen anything like this. I’ve seen some bad times, but I’ve never seen the cost structure and the sales line converge like this.”
That’s left millwright Sam Piearcy, 59, wondering whether the plant will survive for three more years, when he hopes to retire. “We don’t know from one day to the next whether we have a job or not,” said the union president and 23-year employee of the company, whose products include the paper for Tylenol labels and Architectural Digest covers.
Piearcy said that, as an older worker, he doesn’t believe his chances of being rehired would be very good. So if Shasta closes, he said, “I’ll just be retired.”
When displaced workers opt out of the job market, they don’t show up in the unemployment rate, which is one reason it tends to move more slowly than other economic indicators, Sohn said. The record economic expansion has pulled in many workers from the margins, including retired people, who may stay out of the job market if they are laid off.
The downturn has made it harder for Angela Perry to find a new job.
She has been searching full time since she opted for “the executive boot package” last summer. Perry declined a job in New York when Standard Charter Bank closed the Los Angeles office where she had served as senior vice president, but she never thought she’d still be out of work.
The Los Angeles native blames the length of her search on her desire to stay put, despite the financial services industry’s Southern California exodus--and the economic slowdown.
“Timing is everything,” Perry said. “It was apparent when I first started looking that things were starting to slow down. But I think people were hoping that it was just a little slump. Now we’ve had three or four months of confirmation.
“I think it’s going to take longer now for me to produce an offer because it’s a harder business case.”
