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A Critical Attribute to Look For When Hiring

By: Alan Walsh, Owner, Huntington Consultancy

www.huntingtonconsultancy.com

info@huntingtonconsultancy.com

(714) 465-2749

I’ve hired a lot of people in my career. My success rate has improved substantially over time. There’s much to be said for learning and seasoning from experience.

Of course one must evaluate the candidate’s specific skill & talent sets, and background checks will sometimes (not always) reveal useful information, but then we get down to the qualitative factors – those elements of a candidate’s makeup that signal a likely winner.

Much has been written about this, and employers look for many different things. Interviewers ask a variety of questions to draw people out. Tests abound for the same purpose. But over the years, when taking into account all available input, I’ve found that one factor rises to the top as a strong signal of a candidate’s suitability.

For me, a candidate’s CURIOSITY has been a very telling personal attribute which has served me well in separating the “wheat from the stalks”.

I always look for people who are naturally curious. A wonderful set of traits usually comes along as a package deal.

Many humans aren’t very curious. They move through their lives in a rather mechanical manner, doing the things required to survive and not spending a great deal of time observing or assessing the world around them. Their work tends to reflect this posture.

Then, there are the curious. It seems to be built into their DNA. They’re forever looking around and questioning the world they observe. It seems to be so ingrained in them that they’re not even aware of their differentiation from the rest of humanity. It’s not that they’re cynical and forever challenging the world. On the contrary, they tend to be very positive and eager to learn.

• The curious are alert, attentive, and observant.
• They think for themselves, and accept little at face value.
• They’re self-confident and independent; which is not to say that they’re poor social fits. That has nothing to do with it.
• Because of their eagerness to learn, they’re usually brighter and more knowledgeable than their less curious peers.
• Their work reflects a tendency to select the paths and methodologies that make the most sense and produce the best results.
• They tend to communicate along clear, rational lines.
• They find weaknesses and fix them.
• They identify opportunities others can’t see.
• They usually require less motivation or direction than their peers.
• They want to expand their minds and grow.
• They tend to be fun and interesting to be around.

There are exceptions to any situation, and certainly not all curious people possess this entire kit-bag of personal attributes; but the trend has been so strong in my hiring experience that it stands out as my most reliable single qualitative measure.

Of course, I’m not referring to those who are forever annoyingly asking “Why”, like a two-year old. Those people just have maturity issues and should be avoided.

When I think of the quintessential curious person, I think of Michelangelo. He was raised in the home of a minor bureaucrat of no particular note, and he spent most of his life living on the financial & political edge at the fickle mercies of the Church, and yet his curiosity led him in directions that culminated in his being recognized along with Leonardo Da Vinci as a consummate Renaissance man; with accomplishments that span the ages.

We can’t all rise to the level of Michelangelo, but I’ve observed that the curious tend to have the same “fire in their bellies” that drove him. They tend to surprise pleasantly.

The curious don’t fit in everywhere. Many entrenched bureaucrats want “drones”, and consider the curious to be annoying or threatening. I’m not one of those managers. Of course, the curious find such bureaucracies choking, and usually don’t stay for very long.

If you’re a hiring manager who shares my vision of what constitutes a valuable employee, I highly recommend that you include a “curiosity assessment” in your portfolio of interviewing tools. You won’t be sorry.

Fed growing more worried about weak economy

Some considering additional stimulus; Bernanke on Hill Wednesday

msnbc.com news services

updated 7/12/2011 5:47:35 PM ET 2011-07-12T21:47:35

 

WASHINGTON — Federal Reserve officials are growing increasingly concerned about the slow and jobless economic recovery and are considering further monetary stimulus, according to meeting minutes released Tuesday.

“The recent deterioration in labor market conditions was a particular concern … because the prospects for job growth were seen as an important source of uncertainty in the economic outlook,” accroding to the notes from the midyear meeting held June 21 and 22.

Although the minutes showed officials were concerned that continued weak growth could undercut the two-year-old recovery, not all policy makers were convinced renewed stimulus is needed. A few held the opposite view, saying that if recent increases in inflation do not moderate, the Fed should consider tightening policy sooner than expected.

The minutes come just ahead of two days of Capitol Hill testimoney by Fed Chairman Ben Bernanke, who will be delivering the central bank’s latest economic outlook.

Fed policymakers met shortly after the government released its May employment report. Last week the government offered an even gloomier report for June.

The economy added just 18,000 jobs last month, the fewest in nine months. And the May data were revised downward to show just 25,000 jobs added — fewer than half of what was initially reported. The unemployment rate rose to 9.2 percent, the highest rate this year.

Word that some Fed officials want to consider a third round of monetary stimulus briefly boosted the stock market late Tuesday, but stock prices turned downward again when Ireland’s government bonds were downgraded to junk status by Moody’s reflecting a worsening of the European debt situation.

Major market indexes fell about 0.5 percent.

Companies have pulled back sharply on hiring after adding an average of 215,000 jobs per month from February through April. The economy typically needs to add 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.

Link to Full Article

The Joys of Recession

By Dan Amoss

The big questions of the moment: What kind of economic environment do we face? And more important, what’s already priced into the stock market? Here’s my view on these themes: The real job creators in the U.S. economy, small businesses, will not expand hiring as expected. There are many reasons for subdued hiring plans; an emerging reason to avoid expansion and hiring will be heightened expectations that tax rates will soar in the future to pay for out-of-control government spending.

So I expect over the next several months, mainstream pundits and forecasters will start worrying about tepid hiring, even as the pace of job losses slows. As we “lap” the 2009 corporate cost cutting by early 2010, and top lines fail to rebound, earnings estimates will have to come back down. I’m amazed at how many sell-side analysts are modeling V-shaped recoveries in 2010 earnings. Most stock prices are disconnected from reality.

Another big question is how will policymakers respond to a sluggish- to-nonexistent rebound in hiring? The economically illiterate, and those with preconceived “big government” agendas, will use any crisis as an excuse to expand government. You’ll be ahead of the game if you realize — as many in the media and academia clearly do not — that the government has no resources. It’ll take money out of one of your pockets, skim some off for its cronies, and expect you to be grateful when they put some of it — debased by the Fed’s inflation, of course — back into your other pocket.

The labor market is dealing with a structural imbalance fueled by government-sponsored housing and credit bubbles. Many will call for the government to “solve” this labor market problem, which will cause a new type of market dislocation. By early 2010, some will push for the federal government to start hiring the chronically unemployed in “New Deal” type of programs.

Where you stand on this question will determine your expectations for the future performance of most stocks. I certainly don’t enjoy having such a bearish outlook on the economy, but it’s the conclusion I reach after weighing all the evidence about the real economy; the credit markets; and policymakers’ damaging, distorting influence.

For example, corporate CFOs and Treasurers are happy about the recent bull market in risk. They know much more about their prospects than outside investors, so their balance sheet management is revealing. In a word, the approach toward capital structure is “defensive.” Heavily indebted companies are flooding the market with follow-on stock offerings to pay down debts. They’re also taking advantage of the Pollyannaish mood of the corporate bond market to issue risky bonds at attractive rates, as default risk seems to be a distant memory of bond buyers. Many corporate bond investors have taken the Fed’s bait to reach for yield, regardless of credit risk.

Amazingly, credit risk is a quaint, distant memory for most, when it should be the first consideration for shareholders — especially shareholders of highly leveraged companies like banks and REITs. In leveraged companies, shareholders’ claims can evaporate very quickly when asset values deflate and cash flow dries up.

For banks in particular, credit risk often accelerates out of nowhere. Remember how many big-time investors bought stocks like the failed Washington Mutual because it appeared to be “well capitalized”?

It’s shocking how many banks the FDIC still deems to be “well capitalized,” despite the fact that foreclosure activity is accelerating.

Foreclosure activity is crucial to the outlook for bank earnings. Mortgage losses will become a big problem for bank stocks in 2010. Mark Hanson of Mark Hanson Advisors does great work on the details behind the headline foreclosure and housing price statistics — the kind of granular, non-ivory-tower research that’s missing in Wall Street and Washington, D.C. In an update a few weeks ago, Hanson wrote:

The chart below shows the national monthly notice-of-trustee sales (late stage) versus foreclosures (last stage) counts from March through August. In that short six-month period, there have been 390,000 NTSs that have not resulted in a foreclosure (circled in red). Many are on trial [modifications].

If we assume that 250,000 of the 390,000 are presently on a trial and 40% fail, then beginning shortly 100,000 new foreclosures will spit out over a short period of time that will be added to the foreclosures that will occur naturally for reasons mentioned previously. If 60% fail, then the number goes to 150,000. With foreclosures only averaging 73,000 over the past six months, this new stream of foreclosures is significant — it has the potential to double foreclosures over a single month.

The banking system has slowed down the necessary process of “working out” unmanageable debts. Deliberately delaying loan foreclosures and write-offs — whether through government edict or smoothing out loss recognition over time — has the effect of backing up the plumbing in the system of credit intermediation. It’s the post-1990 Japan scenario of sweeping bad loans under a rug because “we can just hold on until asset values come back.”

I’ve written repeatedly about the accounting for — and resolution of — toxic assets throughout the banking system, because I see it as crucial to the outlook for both the U.S. economy and corporate earnings. The longer this is delayed, the more likely the U.S. economy suffers a fate even worse than post-bubble Japan. We have a scenario of defensive, undercapitalized banks, combined with a huge population of effectively bankrupt U.S. consumers. This is a problem that requires comprehensive debt restructuring and resolution before we can have a sustainable economic recovery.

Net-net, the outlook for economic recovery is questionable, at best…which means that the outlook for rising share prices is even more questionable.

Small Business Owners Exude Optimism

By Fayazuddin A. Shirazi
Small business owners are apparently confident of an early economic revival. At least three small business owners’ surveys have indicated that a sizeable number of small businesses feel American economy will moderately improve by the end of this year.

According to the Small Business Outlook survey of over 800 small business owners by PartnerUp, a Minneapolis based social networking community focusing on small businesses, 37 percent of the survey respondents believed U.S economy will revive at least to some extent by the end of 2009. The survey also found that small business owners expect to invest more in their businesses, with 68 percent of them planning to hire new employees in the next six months.

At the same time, the study revealed small business owners are taking measures to offset the economy’s impact with 10 percent of the survey respondents planning a workforce reduction, 32 percent are reducing unnecessary costs and 25 percent are lowering business travel and entertainment spending.

“Even in the current economic climate, the majority of small business owners are cautiously optimistic and confident,” said Brian Kennett, Director of Community at PartnerUp in a media release. “The results of this survey show that small business owners are taking proactive steps to weather the continuing economic downturn, while simultaneously preparing for the impending economic recovery.”

“Small businesses are a critical component of our nation`s economy, contributing to the creation of 70 percent of the economy`s new jobs,” said Steve Nielsen, CEO of PartnerUp. “These findings indicate that small business conditions are beginning to stabilize, but that small business owners still face significant challenges before the economy fully recovers.

Additionally, the National Federation of Independent Business, an association of independent businesses with less than 250 employees, also said its index of business owner optimism rose 2.1 points to 88.6 in August, an increase that NFIB chief economist William Dunkelberg called “a big gain.” The optimism, though, is about the future, as owners still have a dim view of current economic conditions.

According to experts, the gain was primarily a result of improved expectations for future business conditions and real sales volumes. The gain in the NFIB Optimism Index clearly signals that the worst is likely over, but so far there has been no “surge” in sentiment or in the important Index components directly tied to the Gross Domestic Product.

“Owners are feeling a bit more confident now because the economy is healing itself and is bottoming, so there are certainly few signs of improvement. Besides, stock market news is also helpful as it indicates growing optimism among investors and business owners alike,” William Dunkelberg told CE Online.

Meantime, a recent survey by Discover Small Business Watch also revealed a similar sentiment among small business owners. The small business watch, a monthly index of the economic confidence of the nation’s 22 million businesses with 5 or fewer employees, also said small business confidence rose to highest level in 18 Months.

According to the Discover survey small business owners expressed faith that the U.S. economy is on the rise and gave signs that they are more willing to invest in advertising and new inventory now than before. The index rose to 89.8, up 7.7 points from July and the highest level since 90.9 in February 2008.

“For the past few months, small business owners have shown rising confidence in the overall economy, as well as an increasing sense that the conditions for their own businesses are improving,” said Ryan Scully, director of Discover’s business credit card. “This month we have a few more signs that they may be ready to start trying to grow their businesses again, and that the worst may be over.”

The number of small business owners who think the economy is getting worse dropped to 43 percent in August, the lowest reading on that data point since the Watch`s inception exactly three years ago, a media release said. This month, 38 percent of owners say the economy is getting better, up from 30 percent in July; 15 percent believe that the economy is staying the same, down from 16 percent in July; and 4 percent remain unsure.

The juxtaposition between the increased optimism and the muffled plans for spending and hiring is because of the non-availability of credit, experts point out. According to a recent survey difficulty in getting credit is a dampener on spending and hiring for most of the businesses.

The recently released Duke University/CFO Magazine Global Business Outlook Survey revealed that credit problems remain with 56 percent of U.S. firms reporting they are adversely affected by credit market conditions, with higher borrowing costs being the biggest problem.

Link to Article

CFOs Foresee Little Change in Hiring in Q4

The survey, by staffing company Robert Half International, found that only 4 percent of the 1,400 CFOs polled expect to add full-time employees, while 10 percent foresee cutbacks, up from 8 percent who forecast personnel reductions last quarter.

Go to Article

Labor Day Job Outlook: Heaviest job cuts are behind us

Abridged: TMT Newswire

CHICAGO, IL — As the economy continues its slow crawl toward recovery, the upcoming Labor Day holiday could mark a turning point in the job market. An analysis of layoff trends by global outplacement firm Challenger, Gray & Christmas, Inc. indicates that the heaviest job-cutting of the year may have occurred in the opening months of 2009, when recession-related downsizing appears to have reached its peak.

“We see more and more signs that the economy is beginning to turn around. While it’s too soon to expect a massive hiring binge… the pace of job cuts is continuing downward,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. Overall, job cuts announced between January and April totaled 711,100, with the largest total for that period on record. While August job cuts are still being tabulated, with 282,948 job cuts announced from May through July, it’s clear that the four-month period ending this month will see significantly fewer job cuts.

“Year-end job cuts are likely to increase from the levels recorded during the summer months, but we will probably not return to the levels reached between January and April. Job cuts are expected to continue the overall downward trend in 2010, when we might actually begin to see some small improvements in hiring,” said Challenger. Challenger sees Labor Day as the start of the New Year in the workplace and a great time for workers to evaluate their job situation and make “New Year’s” resolutions tied to keeping their jobs or finding new ones.

The Economy: Glimmers of Hope in The Darkness

By Al Walsh

Although this pervasive recession/depression continues to hang over us, and I believe the worst is yet to come, there are small positive signs.  Following is a recap of recent observations; many of which I’ve previously shared:

• Commercial credit is showing signs of loosening up – although the “jury is still out” as to who will qualify.
• Durable goods orders are up – indicating some positive stirrings in industry.
• Housing sales are marginally up – although I expect more “dark days” ahead as people use up their unemployment benefits and more mortgage resets occur.  I’ve heard talk of Washington extending unemployment benefits further, which may help matters if they go through with it.
• Businesses have begun receiving federal funds for energy development.  So far, most of the money has gone to big business.  Not much help to entrepreneurs, but good for jobs and business in general.  Smaller companies may receive some indirect benefits via subcontracts from the major recipients.
• The “cash for clunkers” program is popular, spurring auto sales.
• The stock market’s shown signs of life, although I expect dangerous volatility ahead.
• Imports are marginally up, indicating some “fresh breath” in consumer spending.  This will help the shipping lines and common carriers.
• Headhunters I talk to tell me that they’re starting to see some increased hiring action. Nothing to get excited about yet; but a start.
• Consumer saving is on the rise.  The saving rate has been dangerously low for way too long.  The funds deposited with banks should help marginally ease the credit freeze by providing a base for new lending.  Let us hope the banks don’t just sit on it, like they did with the bailout money.
• The rate of IPOs (Initial Public Offerings) is slightly up, providing a positive sign that investment capital is starting to “come out of the woodwork”.
• Industry in general reduced inventories drastically; a mixed-blessing but one that provided cash flow for survival and which will provide a platform for ramped-up production as we come out of the recession/depression and demand increases.
• Consumers are going through the painful process of deleveraging from the high credit positions they’ve been in for years.  Of course many without jobs are increasing those positions for survival, but in general the nation is going through a forced shedding of some credit burden; which is a good thing.
• Other nations are starting to see signs of recovery, including the UK and China.

None of these factors are of great significance themselves, but together they offer some rays of hope.

Growing Your Business – Don’t Make This Mistake.

I previously wrote an article about one of the classic entrepreneurial causes of failure  -  the inability to delegate and let go as your business grows.

Today I’m going to approach that topic from a different angle:  knowing when to spend the bucks and bring in competent managers.

The classic entrepreneurial model is the owner who basically handles all of the management issues while they hire clerical-level people to perform the tasks that they can’t personally handle anymore.  This works fine to a point, but if they’re smart enough & lucky enough to grow the business, they’ll eventually reach the point when they can no longer handle the business management alone.  At this point, many owners try to “grow” their clerk-personnel into managers.  A rare few can make the jump, but most just don’t have the insight, the education, and/or the experience-base to fill the role.   Problems start to crop-up that rapidly magnify into a nightmare.  Unfortunately, this is the point at which many business owners finally “throw in the towel” and take the plunge.  Smart owners act earlier.

Of course, small business owners are horrified at the thought of “shelling out the big bucks” for a manager.  It doesn’t have to cost so much, and the alternative could be much costlier; financially and in terms of business disruption.  There are lots of competent people out there who are available at a reasonable rate.  In this economy, the choices are getting better & better.

Some business owners hesitate because they’re uncomfortable about the interview process itself.  That’s a signal that the  business owner needs to develop their own skill set; or seek outside help in making the selection.  Regardless of whether it’s due to weakness in people-assessment skills, or personality, it’s a signal of problems to come.  As the business grows, your focus must transfer more and more into people management; so seek help now to prevent problems later.  If you’re afraid of making a commitment for fear of making a bad decision, remember that it’s not a lifetime commitment.  At the first sign of trouble, cut the chord.  Most of us have had a bad hire experience at one time or another, regardless of our assessment & screening efforts.  Just dump ‘em and “get back on the horse”.

Getting back to my main theme:  Timely action to bring in competent management can smooth your growth-curve  -  plus fresh talent & perspective can expedite growth.

I’ve said on many occasions that the primary goal of strategic managers should be to retain competent people, set logical goals that they can be measured against, and then turn them loose to perform - managing by results.  This is just as true for small & mid-sized companies as big ones.

So when you sense that you just can’t wrap your own arms around all the management decisions anymore, take careful stock of the situation and don’t be afraid to reach out for the right talent.  You’ll be glad you did.

Al Walsh, Owner/Founder

Walsh Enterprises, Business Advisors

http://www.awalsh.us