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Vol. 3, Issue 3, July 2007

in this issue

Global Hiring Expectations

The Executive Corner: Education Versus Competency: Reexamining Recruitment Strategies

Fast Facts


 

Global Hiring Expectations

According to the April 2007 McKinsey Global Confidence Index, executives worldwide remain optimistic about economic conditions in their industries and countries. However, executives in developed nations feel less confident about economic conditions than do their counterparts in developing nations. Executives in China are the most positive.

Since the September 2006 survey, executives reported less improvement in economic conditions in their nations and industries than they'd expected, but many plan to continue hiring. The most optimistic executives are in China, with 73% of respondents saying they will increase hiring, compared to only 56% in January 2007. Fewer executives in North American and India see improved economic conditions over what they had expected. These numbers reflect the shift in economic activity between emerging markets and developed nations.

Interestingly, a disparity exists between the most senior executives and others regarding hiring expectations. The majority of C-level respondents expect their workforces to increase over the next 6 months, as compared to only 43% of non-C-level respondents. Executives regardless of their level believe most new hires will perform duties created by new market opportunities. A small proportion of C- level executives expect jobs to be lost from plant or business unit closings, as compared to non-C-level, reflecting perhaps their greater knowledge of corporate-level strategy. (Source: McKinsey Global Survey of Business Executives: Confidence Index, April 2007).



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"Formal education will make you a living; self- education will make you a fortune." --Jim Rohn


  • The Executive Corner: Education Versus Competency: Reexamining Recruitment Strategies
  • Interview

    In the midst of talent shortages, many organizations may be missing out on the best talent by focusing too much on diplomas instead of competencies. What is true education? What skills do employees in the 21st century workplace need to be successful?

    Findings in an October 2006 survey from the Conference Board, an organization of American businesses, showed that many recent college graduates are unprepared for the workplace. Of the 431 employers surveyed, only 10% said that graduates of two-year colleges were "excellent" in their overall readiness and preparation for work and only 24% rated graduates of four-year colleges as "excellent."

    The business respondents cited communications as the greatest area of weakness. More than a quarter of new workforce entrants with four-year degrees and more than half of those with two-year degrees were rated as "deficient" in their ability to write and comprehend written material. The respondents said 81% of workforce entrants were deficient in written communications, such as memos, letters, and complex technical reports, and 72% were deficient in grammar and spelling. The majority of employers were dissatisfied with graduates' inability to read and understand instructions and other materials and to perform simple math, such as calculating and applying proportions, rates, percentages, and ratios. Many graduates were also unable to select and use audience-appropriate formal, informal, literary, or technical language. These findings are not surprising given the results from the 2006 National Assessment of Adult Literacy, which concluded that literacy among college graduates was not only shockingly low but trends show it continues to decline.

    When asked to identify the most important skills for new workers to possess, employers cited communication skills as the most important. More than half the Conference Board respondents said that critical thinking and problem-solving were "very important" for successful job performance. Yet, in focus groups and roundtables conducted throughout the U.S., local employers said the public education system has done a poor job in equipping students with academic and nonacademic competencies. Employers stated that new workers need more than specific content knowledge. To be successful in today's workplace, new workers need soft skills and the ability to apply skills across academic areas.

    Researchers point to the success of individuals who possess excellent "habits of mind." Anthony Carnevale, an economist and researcher at George Washington University, says that the most valuable workers, those who have "higher mean earnings across all levels of education," are those "who score higher on measures of complex problem-solving, critical thinking, creativity, and fluency with ideas." The workplace generally requires proficiency in writing to persuade or inform or conducting research and using evidence to support a position, but educational institutions rarely prepare students with these skills. David Conley, in a report for the Bill and Melinda Gates Foundation, discussed the importance of "analysis, interpretation, precision and accuracy, problem-solving, and reasoning."

    Harvard University psychologist Howard Gardner discussed in his new book, Five Minds for the Future, the cognitive abilities that workers will need for the future. These skills are hard to acquire in the education system as it currently exists. Workers who will command the highest salaries are those who can "master ways of thinking in one or more content disciplines or a professional craft; synthesize ideas across disciplines and communicate that to others; uncover and clarify new problems, questions, and phenomena; be aware of and appreciate differences among individuals; and know and act on one's responsibilities as a worker and a citizen."

    A Washington-based nonprofit group Achieve, which examines college and workforce readiness, reports that there are many high-skill, high-wage jobs that don't require a four-year degree, but rather some training and education beyond high school. No one denies the link between education and earnings, but education and competencies can be developed outside of the classroom through experience and through engaging in activities and reading that spans disciplines.

    Many graduates today are deficient in the most critical skills because of lowered academic standards. Many tests no longer require essays but rather use true-false statements because they are easier and faster to grade. Book reading in many schools has been replaced by videos. As a result, even college professors have lowered their reading and writing standards to appease students who dislike and avoid reading and writing assignments. Peter Sachs, author of Generation X Goes to College, says he lowered academic standards and increased the “fun” quotient in his courses so he could keep his job.

    True education, as results from these and other studies show, is accomplished by building competency through developing and cultivating one's mind—one's thinking. While education plays a crucial role in developing the mind, lifelong learning is as important. Statistics show that less than one-quarter of college graduates read even one book a year after graduating from college. Too often, recruiters are screening out excellent, high-performing talent by focusing too much on college degrees as proof of future performance. Ultimately, successful businesses are ones that are more interested in competencies, not just diplomas.

    The trend toward outsourcing HR processes has led to increased use of education as a primary screening tool because it's easier. Companies would be better served to benchmark key positions to understand what competencies, academic and nonacademic, are truly needed. By examining what high performers in various positions do (behavior) and possess (competencies), companies can utilize recruitment strategies and tools that are far more effective in assessing candidates' true abilities. That way, companies are more likely to find and hire the top talent (Sources: "Diplomas Count: Ready for What?" Education Week, 6/12/07; Skills College Grads Really Need," Higher Education Brief No. 938, John William Pope Center for Higher Education, 2007).

  • Fast Facts
  • Number of Remote Employees Increasing: A survey of telework trends in fall 2006 shows that more Americans than ever before are working remotely. According to WorldatWork, an international association of human resources professionals, the number of Americans working remotely at least 1 day per month has increased 63% in just the past two years, from "7.6 million in 2004 to 12.4 million in 2006." The number of teleworkers, both employed and self-employed, who work remotely at least 1 day per month jumped 10% in the past year, from "26.1 million in 2005 to 28.7 million in 2006." (Source: WorldatWork.com)

    Good with Numbers? You might want to consider a career as an actuary. The U.S. Bureau of Labor Statistics projects "faster than average" job growth for actuaries. Among the benefits of this career are a high degree of job security and salaries that range between $54,770 and $107,650 nationwide. However, the job isn't just about numbers. A recent article in The Seattle Times reported that actuaries provide a "broader set of financial services." Graduates with degrees in economics and math have opportunities in "retirement income, 401(k) plans and wealth protection," not just insurance. (Source: The Seattle Times and bls.gov)

    Contingency Workers: Staffing Industry Analysts project the number of contingency workers in the U.S. will increase to 10% over the next 2 years, up from 8% currently. Employers are increasingly turning to contingency workers to increase their flexibility in managing labor needs for new projects, new market expansion, or product launches. Nearly 80% of the companies that responded to the survey said they plan to increase their contingent workforce. The IT, pharmaceutical, and engineering industries have the largest number of contingent workers, but other sectors, such as retail, are beginning to make this shift. (Source: Workforce Management Online, May 3, 2007)

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