Tag: human resources

We Are All Specialists Now

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Apologies to Richard Nixon for paraphrasing his famous Keynesian quote.

Two years after starting a mid-career search, I remain impressed by the greatly increased emphasis on perfectly matching an individual’s professional and industrial experience to an open position.  Hiring managers, recruiters and HR managers have all adopted this approach.  This is partly because of the abundance of candidates and partly due to the risk averse environment caused by the slow economic recovery.  It is also due to the improved results of the “fill the bucket” approach to hiring where specific requirements are listed and then proven from actual experience and multiple interview responses.

However, I think there is something deeper involved.  Professional and industry specialization has continued to increase through time.  The discussion of outsourcing, virtual project teams and individual agents has died down, but these innovations have become a growing reality.  Successful firms increasingly focus on smaller niches of product, geography and comparative advantage.  Increased industrial and professional fragmentation is required for success.  The trend will continue.

How did I miss this?  As usual, paradigms act as blinders.  In high school in the 1970’s I was taught it was important to be “well rounded”.   At a liberal arts college, I learned that great minds and thoughts were academic, abstract and universal.  In business school, I learned that an MBA provided the necessary skills for a lifetime of career success.   I later discovered the competitive advantages of being a “general manager” from John Kotter’s influential work.

My teachers were correct in promoting the personal and professional value in developing broad knowledge, thinking skills and a professional base.   They did not foresee the modern world of global competition, where firms are forced to specialize and make economically rational decisions far beyond those envisioned by Adam Smith and David Ricardo who outlined these principles long ago. 

“General Managers” are now merely a declining specialization.   Some top-end MBAs with broad consulting experience can move from industry to industry and be successful.  A few individuals can specialize as “strategic advisors” to presidents.  But even in these fields, the trend is toward specialization.  Firms will pay for experts in a narrow tax, legal, technical or IT field only when in-house experts do not exist or others cannot complete a project well enough. 

Professional services firms have always paid lip-service to industry focus.  In the last two decades, led by IT firms, they now specialized by industry and technology equally.  Clients expect staff to understand their business.

Industrial and professional specialization will be required for future employment.   Individuals, firms and universities will adapt to survive.

Professional Branding

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Anyone who has searched for work in the last decade has learned about the importance of the 15 second elevator speech and fine-tuning their personal brand.

Many have rejected this sales and sound-bite oriented approach to career progress as being undignified, unprofessional and personally demeaning.   Most have learned that this approach is required for even a scrap of success.

Modern recruiters and counselors advise that “it’s not about you”.   It’s about what a hiring manager or screener are seeking.   A generalist brand, multiple professions, multiple industries or a complex story are deal-breakers.   Hiring agents are seeking an exact match.  A Swiss Army knife has no perceived value.

Job seekers are well-advised to network broadly, but to focus on opportunities with a clear match of experience to requirements.   Hiring managers want to be sure that professional skills and experience are solid.  Degrees, majors, certification and prior job titles provide 90% of the evidence.  It is a rare recruiter or hiring manager who will really dig deeply into technical skills.  Interviewers also know if they are seeking a specialist or generalist within a profession.  Candidates should tailor their resume, cover letter and answers to one or the other.  A state and local tax specialist is hired for very different reasons than a division controller.

Most businesses strongly prefer candidates to demonstrate mastery of a single profession, even for entry-level positions.  General management majors are handicapped in the job search.

In addition to being technically proficient, most firms want applicants to be dedicated to and knowledgeable about their industry.  There are many reasons.  Learning industry jargon, technology and the basis of competition takes time.  Industry veterans truly believe that their industry is different and special.  Sharp managers understand that turnover is lower for industry specialists.  Most industries have a well-established culture and a leading function (merchants, scientists, deal-makers, architects).  Like most clubs, they prefer to hire familiar faces.

A wide range of professional, industry and project experience is of great value within a firm.  Unless an individual is able to sell very specialized technical skills or are seeking work through a consulting firm, they must stay focused on a simple story line when searching for a new firm.  “Cost accountant – heavy manufacturing” sells well.  “Management accountant with project success in various industries” sends vague signals.

A specialized industry and professional brand is required today.

Too Much Specialization

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Companies are well-advised to temper their desires for a perfect professional and industry match in the hiring process.

For each opening, decide if a professional specialty is required, preferred or unimportant.   A senior avionics research engineer requires an exact match.  A senior process engineer might have a six sigma black belt, or not.  An entry-level tax accounting position could be filled by any accounting of finance graduate.

If a position has a clear technical career path, the specialty is more important.  If a position often leads to a manager role with broader responsibilities, the specialty is less important.

If the firm competes in a large industry like medicine or distribution, an industry experience screen makes business sense.  If the firm is in a niche industry like timeshare swaps, association management or oil drilling services, the larger candidate pool from a broader range of industries may be wiser.

Within a firm, some functions require more industry experience for success.  Product managers, product engineers and sales managers need to be experts in their field.  Support functions like IT, HR, accounting, legal and facilities may not require industry experience.  Most entry-level positions can be filled by trainees who are eager to learn.

If the firm is in a new, fast growth industry, then hiring from other industries may be a necessity.

If the firm is struggling to compete in an industry undergoing change, hiring from another industry may be required to insert world-class experience and lead that change.

In general, organizations have found that specialized professional and industry experience are good predictors of hiring success.   Adding a pinch of common sense will reduce the search cost and provide superior candidates in some situations.

Labor Market Failure and Recovery

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After 18 months of hiring freeze, it’s time for all profit-maximizing firms to kick start their recruiting.  At present, we’re hiring too few, we’re too focused on exact hiring matches and we’re unwilling to invest in the future.

 The recession was first sensed by wise businesses in 2Q 2008.  The banking crisis of Fall, 2008 terrified even those whose careers went back to 1974-1982 when the last panic of gas prices, inflation, interest rates and Japanese competition derailed the post WWII expansion.  While the freeze and risk-averse decisions were justified at the time, they are wrong today.

 The all-in cost for a senior professional staff member is roughly $100,000 per year.  A good hire lasts for up to 10 years.  A typical hire is a $1 million investment.  In the current environment with 16M candidates chasing 3M jobs, the odds of finding a great candidate are excellent and the ability to hire at 20% below old market salaries is a given.  Firms with a strategic view of human resources should be first in line to hire these high ROI assets – TODAY.  Every good hire is a $200-300,000 addition to the firm’s net worth.

There is little joy in HR departments these days.  Hiring volume is down so the pressure is on to reduce HR staffing and to NOT use external recruiters.  The volume of applicants per position has quadrupled.  HR’s ability to use on-line application forms and screening tools has improved, but not enough.  To cope with the excess supply, HR and hiring managers have decided to make an exact match of past experience by industry and function to the position the penultimate criteria for hiring.  This allows the greatest percentage of candidates to be eliminated in the first screening. 

 Unfortunately, this means that many qualified candidates are not considered.  Narrowly experienced and over-tenured candidates are favored, even if they have had the same experience for 8 years in a row.  Firms pursuing this approach will soon find that they have hired adequate candidates who have limited upside potential.  They are also likely to find that they have made many “hiring errors” because they have not given equal weight to the questions of personal motivation/drive and teamwork/manageability.  I recommend Martin Yates “Hiring the Best” as a guide.

Firms that continue in “hiring freeze” mode have a bias towards replacement of existing positions versus investment in the staff who deliver future value.  There are thousands of highly skilled project managers, business analysts, scientists, quality specialists, product managers, marketing researchers and other professionals who are unemployed because firms are unwilling to restart the investment cycle.  This recession will end and success will depend upon investing in new products, new customers and better processes.  There may be some areas where NOT replacing a separated employee is the right choice.  Successful firms make decisions one choice at a time rather than relying on simple rules.

 Firms that have their financial house in order need to race to the labor market while supply exceeds demand and hire skilled, motivated team players to pursue the next cycle of business investments that deliver long-term value.