Monster CEO Sal Iannuzzi, who was in a breakout session at the recent White House jobs summit, is telling the Administration that employers should get help to mitigate the expense of bringing on a new employee.
While such help could vary, Iannuzzi gives the example of a job candidate currently getting $15,000 annually in unemployment benefits. If the government instead contributed that $15,000 to an employer who could provide, say, a $50,000-a-year job, it would, he says, reduce the cost and risk for employers. “Onboarding is very expensive, and employees come with heavy costs,” he says. “No one wants to hire and let people go. That’s one of the worst things a company can do from an economic and from a morale standpoint. Grants or tax credits, in some way, shape, or form, mitigage risks to companies for training or onboarding people — government picking up part of the tab of that training.”
The White House divided summit-goers into breakout sessions. Iannuzzi’s track (a bit over an hour, which, ideally, he said, would have been much longer) was mainly about training, education, community colleges, and other hands-on hiring issues. Toward the end of the session, to take one example, the subject of the lack of nursing educators came up.
In addition to Iannuzzi’s suggestion for some sort of onboarding assistance, he also believes that some TARP money should be used to get banks to loan more money, especially to small businesses, with the U.S. government guaranteeing the loans. “An extremely critical thing is to free up credit markets to get them to invest and hire,” he says. “Getting credit out there which has been very hard to come by is very, very critical.”
Iannuzzi is collecting additional economic ideas from Monster employees and will be submitting them to the Administration.
Yesterday on CNBC, Alcoa CEO-turned-Bush-Treasury-Secretary-turned-Bush-critic Paul O’Neill said that he “never hired a single person because of a government program” and that only demand for a product creates more hiring. “I’m pretty dubious about the government’s ability to actual create more employment,” O’Neill said.
It’s a sentiment that Iannuzzi understands. Sort of. On a spectrum where on one side you have liberal bigger-government Keynesians and on the other side the economic conservatives who miss the Simon Le Bon days of big tax cuts and the Reagan economic boom, the Monster CEO seems somewhere in between to me. Obama stacked a lot of the summit deck with his supporters — like any president would do. From what I can tell, though, Iannuzzi had no previous affiliation with the administration; indeed, he says he was “surprised to be on the docket.”
Iannuzzi agrees with my December 4 comment that America’s corporate taxes, among the world’s highest, are a big problem. On the other hand, he supported the first Obama stimulus. “The economy was in extremely bad shape,” he says. “There was a lot of damage, a lot of concern out there, and I think the stimulus certainly helped. We can always argue about this much vs. that much [spending and tax cuts] but it gave people something to hope for, that there was hope on the way. You can never underestimate the psychological impact. It has provided the stabilization or the creation of some jobs. And a lot of the money has yet to make it out of the system — they wanted to sort of drip it in over time.”
After the conference, an assistant to the president sent Iannuzzi (and others) a copy of President Obama’s recent speech proposing a second stimulus, asking for feedback. Though Iannuzzi doesn’t necessarily agree with every detail, he’s generally supportive. “We can argue about this point or that point,” he says, “but overwhelmingly the things in that speech — the things he said need to be done — are very much on target. The direction is certainly right. If we get it 80% right, it’s definitely the right thing to do.”
It’s hard to figure out what’s going on with jobs. You’ve already read about some of the good signs. There are more trickling in daily. At LinkUp, for one, new job listings rose 9% in November. And temp hiring, Adecco says, seems to be growing steadily.
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On the other hand — the glass-half-empty hand — there’s some re-thinking about the jobs data, with the bottom line being that if you look more closely at the government numbers, unemployment may look a little better, but hiring has not picked up. On top of that, some say a coming commercial real estate implosion and consumers’ newfound love of value will re-doom the U.S. economy.
Iannuzzi’s view is that “things have stabilized,” pointing to the recent Wall Street Journal story saying that Fedex is becoming more optimistic. “Fedex is a great indicator, a great barometer,” he says, adding that U.S. productivity data is, too. Companies will need to hire more folks, as they can’t squeeze their existing staff much more.
“I spend a lot of time talking to my sales force, the people really in the trenches,” he says. “What we hear is a much more positive attitude. Companies are planning to hire, they’re planning to do things, they’re thinking about expansion. They’re still hesitant to pull the trigger, but the conversation is a lot more positive than it had been. I’m hoping we’re sort of at the bottom. I would have to say that if what we are seeing right now is sustained, we are through the worst of it. But there are still an awful lot of people who don’t have jobs.”
Iannuzzi, in fact, believes unemployment is really worse than it appears, if you add on farm workers and young people who aren’t being included in the tallies.
Naturally, Iannuzzi mentions that he “spent over $100,000,000 in the middle of a very sharp recession, creating a match technology in order to connect and match people most accurately to the opportunities out there.” A half a billion has been spent, he says, over the last 2 1/2 years to improve Monster’s products. His point is not that his 6,000-employee outfit is going to save the world, but rather that, going back to the point I made earlier about him not being a full-on big-government guy, the private sector and not the government is ultimately the job creator. “The government can’t fix this all this on its own,” he says.
Iannuzzi mentions the terrrorist attacks on the U.S., and how so many companies in New York came together, regardless of politics and ideology, to help rebuild. He hopes this happens again, and sounds optimistic that the various business, government, and education reps he met in Washington are committed to such a pragmatic approach.