12:01 pm | 0 recommendations | 9 comments

An Organizational Perspective on the “Alleged” Labor Shortage

My perspective on the “alleged” labor shortage is more systemic in nature, particularly when it comes to organizations. Throughout my 20+years in HR as an executive, consultant, and doctoral student, I have interviewed literally thousands of individuals. From this “field” research, as it were, I have come to believe a few generalizations about hiring managers:

1. Hiring managers hire candidates who are most like themselves.
2. Hiring managers do not know how to interview effectively so they rely on #1.
3. Interviewing candidates takes time, of which many hiring managers have little of, so they rely on #1.
4. Hiring managers have inherent biases and thus rely on #1 cover themselves.

So why is this important to the “alleged” labor shortage argument? Here’s why:Its all about proportions. Yes, the population is going down, but so are the number and types of jobs. With the advent of new technologies, such as Microsoft’s Surface and the .NET Compact Framework, some service areas may become obsolete, thereby eliminating even more positions.
What this means is that workers need to be just as scalable as organizations. Workers need to take responsibility for their own training and development and not rely on their own companies to provide it. During downtimes, such as a market adjustment (like now), organization’s are quick to cut training and development because it is deemed a “perk.”  Without training and development how do you advance, especially if boomers are not retiring any time soon? In a time of uncertainty, say when a market adjustment happens, senior people are not going to want to leave their jobs ($$$), so those ambitious underlings are going to seek growth elsewhere. Retention programs won’t be able to keep them; well, maybe if you offer every one of them a retention bonus but that could get pricey. High potential people will leave to get growth elsewhere, either in skills or industry exposure. They won’t stay and be frustrated, regardless of the economy’s state.
I think there will be a surge in hybrid positions; I see this already in technical recruiting. With flattened organizations comes a redistribution of work, and much of it requires engagement from the current employees. Some will resent the dumping and leave, and some will welcome the variation in their work day and see it as a growth opportunity.
But back to the hiring managers and their biases…..from recent qualitative research in my doctoral work I found that ageism is becoming more of an issue than any other form of discrimination. Now, this sample was very small but still, I have found it happen throughout my own career. Hiring managers, many of who are younger than the youngest boomer, do not want to hire older workers who bring a dearth of experience. Many times these older workers do not have degrees, particularly those in the IT field where they earned their stripes before schools adopted sophisticated IT curriculums. These folks have solid on-the-job experience and/or certifications, but are getting dismissed from candidate pools because they lack a piece of paper.
With the trend toward a Bachelors degree required for just about everything and anything in the market, this eliminates a whole group of talented folks who want to work, many of whom are boomers. Often these older workers have been let go as part of a reduction in force (RIF); many folks make assumptions about RIFs, but let’s face it....it really comes down to cutting costs, and aside from cutting T&D, the older workers generally are making more money. Yes, there are other explanations such as getting rid of troublemakers in the early round and trying to avoid adverse impact. Having had to conduct several RIFs myself, most executives care only about the bottom line, and favoritism and conformity play a big part in whether you keep your job.
Aside from the “overqualified” excuse, hiring mangers use the candidates compensation level as another excuse. Many of the older workers realize they have peaked out on their financial compensation and really just want to go back to work, even if they have to take a large pay cut. This perhaps explains Karen’s point of long term unemployment rates.
I see part of my job as educating management in that there is no evidence that demonstrates mere possession of a bachelors degree, or even school pedigree, is directly correlated to job performance. I actually researched this in peer-reviewed journals and came up empty-handed. (For those of you who are not familiar with the term “peer-reviewed journals”, it covers journals such as the Journal of Leadership Studies, Academy of Management, Journal of Personality and Social Psychology, where other folks (academics, scientists, psychologists, sociologists) do blind reviews of your study/article. This helps ensure the quality – and fact - of what is being stated. I often refer to these types of journals in my research and writings.)
Nevertheless, some managers insist that getting a degree demonstrates setting a goal and achieving it, and that translates to job performance. Well, management would do better to correlate watching sports on TV to teamwork, but that is a whole other article entirely. Maybe there’s an organization out there that will let me access their HR files to do the research….but I digress.
In closing this blog article, its not really important whether I believe there is or is not going to be a labor shortage; what is important is how I work with management and leadership in expanding their definition of talent and gently making them aware of their inherent biases.

11:30 am | 0 recommendations | Be the first to comment

Lipstick on a Pig

www.workforce.com/section/06/feature/25/33/66/index.html

I came across this article called “Microsoft’s Canadian Move a Swipe at Stiff U.S. Visa Policies” (link above) last Friday and was just a tad piqued. The last time I checked on H1b visas, their purpose is to seek “temporary help” from “skilled foreigners” in “specialty occupations.” The requirements are (according to the Immigration & Nationality Act, section 101[a][15][H]):

1. a bachelors degree or higher degree (or foreign equivalent) in a specialty field;
2. at least 12 years of progressive experience in the field;
3. a license to practice in the field;
4. a mix of advanced education and work experience (max 12 years).

A specialty field is typically considered IT, accounting/finance/banking, marketing, advertising, PR, sales, recruiting, all engineering, teaching, health care/medical, telecoms, management and research. So, pretty much every job function…..and you only need to meet ONE of those requirements in one of those fields.

There is also the notion of “dual intent”, where the visa holder can apply for permanent residency. This dual intent is a bone of contention for many individuals; the main area of contention is discrimination. An interesting question arises, “Does the disproportionate use of H1b visas by companies and hiring managers demonstrate that the legislation has been implemented in a discriminatory manner?”

Microsoft complains about having problems finding “top talent.”  Now, the last time I checked Webster’s dictionary (this morning) for a definition of talent, “temporary skilled labor” was not listed. Historically Microsoft has paid its people well, but now that it is a “mature” organization, they tend to pay on the low end of market value which makes H1bs (and offshoring) even more attractive as a labor force. It is well known that H1bs in America make less than their US citizen counterparts.

Microsoft’s argument that there is not enough talent here so they need to bring in more “skilled labor” does not add up. Numbers have been bandied about in the range of 500,000 unemployed high tech workers in America. I am pretty sure they have not hired every IT graduate in the US. To me, their argument for increased H1bs falls apart on this point.

It would seem that Microsoft thinks American developers are not talented, so much so, that only foreign countries have skilled labor. I know a LOT of truly skilled developers and they have not been snapped up by Microsoft. Oh, but they are over 40, have Masters Degrees, and generally earn at least six figures. Why would Microsoft pay them six figures when they (used to) get 3-5 Indians developers for the same price? I write “used to” because India has finally caught on to the salary inequity and is beginning to demand higher salaries, albeit still lower than America. China and other offshore countries will soon catch on and then we’ll be back at square one.

Psychological Contract

This H1b mess began years ago with the offshoring binge. While Microsoft is not the only company to have offshored jobs to India, they are one of the earliest – since 1990. The majority of Microsoft’s offshored jobs were in research and development but has, understandably, evolved to sales and support for the Asia Pacific region.

In the beginning, Americans got scared at having their future offshored. Hence, the gradual drop in American attendance in IT programs. Interestingly though, at this same time, there was an increase in F1 visas for students in technology programs. I suspect this is partly due to the reputation that India’s schools did not produce quality graduates (problems with code persist in offshore environments; does that make those H1b candidates “skilled labor”?). Anyway, many American college students were asking themselves “Why would I enter a field with no job growth in my own country?” Good question.

Offshoring and H1bs violate a basic psychological contract with existing and potential employees. Trust. Company branding has puts its spin on the market, but it is harder to find candidates that want to work for a company that has an extensive offshoring and H1b history. Candidates regularly tell me they are not interested in XYZ company for that reason.

A side outcome of the offshoring/H1b binge is the enablement of foreign nationals to gain experience in hot technologies, i.e., research and development, that could have been exposed to Americans. Companies chose to offshore and transfer US technology to foreign countries, and now they are crying wolf at not having enough local “skilled labor”. For Microsoft, they created their own quagmire.

Oh , and don’t doubt for one minute that American companies are not being granted benefits for offshoring jobs (can you say tax cuts to corporations?)…As an aside, I would be most interested in knowing exactly how many H1bs Microsoft sponsors and in what areas but I digress.

Finding the best talent is one thing, finding cheap labor is another. Am I making some assumptions in the blog piece – Absolutely. But I can guarantee you, H1b visas are not about “talent” or “skilled labor”, but rather cheap (and perhaps indentured) labor. Its just lipstick on a pig.