Five Recruiting Scenarios 4: The Future Matters

Spring 2010 conference-logoRecruiting and HR will not evolve independently of global events and pressures. Geopolitical issues, energy, global warming, rapid industrialization, demographics, immigration, and the constant invention of new jobs and disciplines will always drive the day-to-day realities of recruiting and HR.

A key driver of the evolution of recruiting and HR is the amount of growth in the economy and in a specific business. Recruiting for new roles is significantly different than recruiting to replace. The more clearly a role is understood and documented, the more the market behaves in competitive fashion. Once the new role is completely commoditized, it’s easy to talk about job descriptions, resume analysis, and community development. As long as the role represents growth and innovation, it is hard to characterize, and recruiting involves more intuition.

Status also makes a difference. Methods and processes used for recruiting and HR vary on two dimensions: level of compensation and the degree to which the job involves intellect. When compensation is low and involves brute force, the issues revolve around safety and reliability. When the questions involve enormous fees and lots of conceptualization (and notably, few real safety issues) the game is very, very different.

The following brief scenarios will give you some idea of the way that talent acquisition and management could evolve given a shifting landscape:

A: Oil Prices Move to $200/barrel a Year From Now

Globalization, food prices, and the way we all get to work all share one common underpinning. Each relies on the continued availability of cheap energy. At $200/barrel, the economics of the later 20th century change dramatically. In the first years of the transition, things that once were disposable (electronics, for example) become extremely expensive. The ability to “leverage” wages in other parts of the world depends on the ability to transport finished goods at inexpensive rates.

Spiraling ever higher, energy prices bring changes to local economies. Television repairmen become vogue. The maintenance of now-expensive luxury objects becomes the fastest-growing vocation.The automotive industry collapses (even further), displacing millions in the supply chain. Food prices skyrocket.

As work returns to the mother ship from outsourced destinations, a huge imbalance between available and needed skills develops. Recruiting grows in size and complexity as companies rush to train workers to do tasks that once were completed in other countries. Interestingly, the need for immigrant labor grows tremendously, as does the requirement for training of those guest workers. This is a future in which “competency management” is in the ascendant, where recruiters can translate a resume into the necessary competencies and make a decision. Education, credentialing, and structure become essential elements of an employee portfolio.

(If you’re interested in learning more about this possibility, Read “Why Your World Is About To Get A Whole Lot Smaller: Oil and The End of Globalization and watch this video)

B: The Downturn Is Followed By Sustained Growth

There are plenty of good reasons to believe that conventional wisdom (the recession marks a permanent lowering of expectations) is off base. Global economic growth has persisted over a very long time period. The United States has a tendency to take a dour look at its prospects. The geopolitical reality is otherwise.

In a world of continued growth, population issues take the front seat. All of the Western industrialized countries will be competing for the hearts and minds of immigrants. While the United States has an advantage, other players are already beginning to compete and will be better at it. Government subsidies for guest workers will be common.

In the future with enduring economic growth, global warming is mitigated by the slowing rise of population while the energy shortage is solved by a range of innovations including the wireless broadcast of energy. Recruiting, in this scenario, is focused on the complex process of finding the right people to work in and lead new endeavors. Skills and predispositions are the central facets of recruiting in this future. Workers aggressively exploit their leverage in relationships with multiple employers.

(If you want to know more about this scenario, read The Next 100 Years: A Forecast for the 21st Century and watch this video, Part 1 and Part 2)

C: More of The Same: Growth Slows to a Permanent Crawl

This is the Eeyore scenario.

As happened in Japan, investment moves away from aging population centers and toward youthful countries. In essence, the flow of capital moves toward the southern hemisphere. The North is left to deal with aging and the associated health problems. Auto aftermarkets shift from a technological focus to seat padding and comfort. Attempts to build economic momentum seem sabotaged by a series of natural and unnatural disasters.

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Housing sits vacant even as prices fall through the floor. With no growth and no means to attract immigration, the housing stock is 30 percent too large. As tax revenues continue to fall, the stress between regions results in a crumbling of large national identity in favor of small regions.

Young professionals learn to hang on to a job, which is the only meaningful asset. The corporate attrition problems goes from “too much” to “not enough.” Recruiting becomes exclusively about filling empty slots while corporate mobility and development are in the ascendant.

(If you want to learn more about this scenario, read the paper and watch the network news.)

In the next four scenarios, we’re going to concentrate on the evolution of recruiting and it’s impact on the market segments we identified last week.

What should be clear from this short example is that the future of recruiting and HR are extremely dependent on the way that the world evolves.

This research is sponsored by Pinstripe Talent.

To read the rest of the series:

Five Scenarios: I Introduction

Five Scenarios: II The Trends

Five Scenarios : III The Marketplace

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9 Comments on “Five Recruiting Scenarios 4: The Future Matters

  1. John love the attention to futurist thinking and the obvious value it can bring to planning for different events.

    That said, your notions about $200 oil strike me as fanciful for a few different reasons. First is that ocean transport is still very practical at those levels- the largest container ships can carry 14K 40 foot containers with a crew of 30 people on one diesel engine (which happens to be the world’s most efficiant liquid fueled engine at that), and rail transport from our western ports is fairly realistic.

    But the main problem is that @ $200 oil, our society as it’s currently configured breaks down in big ways. Food production in the US is basically done with diesel fuel for equipment and crop nutrients, and it would be hammered.

    Many jobs would no longer justify transport costs for workers or trucked resources, so what manufacturing we had left would be hammered.

    Air travel would be totally non-economic at that point, so a great deal of tourism in Florida and other areas would be brought to a standstill, with the downstream effects on employment. In fact, many service jobs would be non-economical @ $200 oil.

    If those prices lasted for any duration, you would be looking at a major depression, and hiring/recruiting would be the last thing on people’s minds.

    But beyond those huge negative effects, there is the question of how oil got to that number. It could be geopolitical unrest like a big mideast war, because tar sands, shale oil, and deep sour crude (as examples) pay well at around $100 a barrel but would take some time to ramp up.

    Another plausable reason would be massive demand in China, Brazil, Saudi Arabia, etc. and if so, those economies would be humming which generally means that ours would be too.

    Another bad case would be a total destruction of the value of the US Dollar, but in that event, recruiting would also be a non-factor for awhile except in extraction industries where we could sell some of our natural resources overseas, including domestic oil and some basic manufacturing since we would be a target for inbound wage aribtrage as a second world nation.

    Now the thing is that we could be vastly more efficiant in our use of oil and its practical even today that 70% or more of our surface transport could be done with electric or hybrid electric vehicles, which would drive oil prices the other way as US demand declined.

    As leading energy thinkers have said for years, we need a severe gas tax now to both raise revenue to change the infrastructure, and to allow movement to a lower oil footprint without massive shock effects.

    The easy cheap oil has almost all been extracted, but the Earth was formed in a hydrocarbon soup and the probable limiting factor for oil use is not the supply of oil, but supply of air to burn it in. Sooner or later, we have to change our surface transport infrastructure or we are in for some dark times.

    Now that likley requires worldwide agreements on fossil fuel use, and probably minimum wages and environmental standards, but the political situation right now does not look up to the job….. it may take Götterdämmerung to see it thru…

  2. Great analysis, Martin.

    I agree that the scenario has a low probability. But, energy prices have doubled seveal times in recent memory for a variety of reasons. More importantly, if you suspend judgment for a moment and look just at the consequences for recruiting, it helps showcase some interesting things.

    For instance, most of the generalizations you hear about recruiting assume that a significant percentage of the work is devoted to filling slots created by growth. I’d never really looked closely at that odea before I considered the future of recruiting in a major retrenchment. By showcasing a moment when the growth in the economy (if there is any) comes from entirely different places, you get to see that we might manage recruiting differently.

    When you know the ins and outs of a particular job, job descriptions and qualifications are easy to articulate. The more frequently you’ve filled a particular kind of slot, the easier it becomes to predict the ebb and flow of talent in and out of the job. Innovation in campaigns, pool development and pre-staging come easily when the equation is understood.

    In the event of a disruption that hurtles us towards the stone age, we’ll still be recruiting to replace people when they die, leave or can no longer get access to the work. What won’t be happening (for a while) is growth in jobs that have never been done before.

    At any rate, thanks for the response. Scenarios are exactly supposed to cause the kind of thinking you did. The approach is good at getting the right questions asked and questioning very stable assumptions. Having considered extreme future possibilities strengthens the quality of the underlying plan.

    (PS: Jeff Rubin’s talks on $200 oil are pretty interesting.)

  3. Hmmm. Let’s consider the expensive energy scenario:
    “As work returns to the mother ship from outsourced destinations, a huge imbalance between available and needed skills develops.”

    Well, this might apply to physical jobs, but I don’t believe it would to information transfer jobs, including recruiting. If anything I think it would greatly accelerate the development and implementation of broadband video and telepresence-based operations.

    Also, at $200/barrel, hydrogen becomes very competitive and can be used efficiently in fuel cells for surface vehicles and liquified for jet travel. If (for what ever reasons) it’s not cost effective to serve as jet fuel, it could stuill be used in very large lighter-than-air transport- dirigibles: “The Steampunk Favorite”.

    IMHO, a VERY GRADUAL (20-30 years?) rise to this price might be a good thing, while a quick jump and stabilization at this level(as described here) would be disastrous.

    An interesting site:
    http://www.paleofuture.com/

    Cheers,

    Keith

  4. I totally loved http://www.paleofuture.com/ . Most hard forecasts for the future are wrong. Scenario planning takes that as a starting point. You end up with a great conversation about “What would happen if…?” rather than an argument about whose precise forecast is the most accurate.

    My sense is that a dramatic shift to high energy prices (in a year) would really reorganize the world quickly. The ratio of physical to conceptual jobs would trend towards the physical.

    The key, I think, is that the scenario underlines how dependent our thinking about recruiting is on growth.

  5. This is a fascinating discussion and I have nothing really to add because I’m not nearly as smart as you guys but I’m learning alot from this. Thanks. One aside: the price of oil has always haunted me. It seems, to me, the major (financial) changes in our lives (present generation) have come as a direct (and almost immediate) result of it. That’s all I know – I don’t think it’s any coincidence that this (present, major) recession came fast on the heels of a doubling of oil.

  6. Don’t sell yourself short, Maureen. You’ve FORGOTTEN more than most of us (including me) will ever know about telephone sourcing. You’re like Sherlock Holmes.

    Take Care,

    Keith

  7. That’s funny…Maureen Sharib doing a Columbo impression.

    Life wouldn’t be the same if oil surged to $200 in the next year.

    Maureen, how would sourcing change if the vast majority of people were having trouble getting to work. (That’s really a question about how whether or not big global events could cause sourcing to include a higher level of screening.)

  8. Maureen you are right to be concerned- our oil dependence is the #1 threat to our way of life and our national security.

    http://www.theoildrum.com/ is a great site- I check in at least once a week to keep track of what’s happening.

    And you are also 100% correct that $4 gas is what lit the match on the Great Recession; the fuel was the housing bubble, which itself was a distortion caused by the fed mis-pricing money- a task which should be left to the free market for money, but thats a whole other post !

  9. How would sourcing change if the vast majority of people were having trouble getting to work? Good question.

    Hmmm…If people couldn’t get to work I suppose one change would be vast outsourcing of work into the homes of those doing the work. Whether or not the majority of the workforce could perform under this scenario remains to be seen – I believe they could not. “Working from home” is not for as nearly many as think it is. It’s a discipline to be able to work from home – one that most people do not possess.

    The next question is, though, (assuming people were working from home) is how would sourcing find those working from home?

    In the case of Internet sourcers I don’t think (but I’m really not qualified to speak on this) sourcing would change that much. It might and I’m probably missing soemthing right under my nose.

    In the case of telephone sourcers (which I am qualified to speak on) there would need to be a focus on extracting the home information of the employee from the Gatekeeper – something that is commonly already done in some instances -for sales and some sales engineering for instance. This would be done with an assumptive statement, something like: “Can you give me so-and so’s home work number?” Gatekeepers would probably be able to transfer you directly to the employee’s home number – same as they transfer you to an extension number within their own facility now.

    Gatekeepers would become ever more important defenses inside companies as there would be an increasing need for phone sourcers to extract the info they seek from persons like them (or whoever else would be left working within a company w/ access to employee/corporate info). It would become increasingly important for phone sourcers to understand how to navigate these persons for information.

    One of the key resources of phone sourcers (the ability to “direct dial” inside a company to reach employees sitting at their desks in order to gather info from them) would be removed if people were working from home so a keen understanding of how to communicate with people will be absolutely critical for phone sourcers.

    Phone sourcing will become even more valuable.

    The “higher level of screening” you mentioned John would come in the fact (for phone sourcers) that you’d have to navigate to employees through the Gatekeeper.

    I don’t see the actual (phone) communicative technique changing so much as the fact that there would be a major change in the workforce characteristics itself – one from an employee mentality to one of (more) of an entrepreneurial mindset – employees who can motivate and operate under their own steam in a lone environment. What THAT will do to a company’s structure remains to be seen. I can see both negatives and positives on that one.

    I’m excited to hear what others think.

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