Labor: Businesses Need to Adapt New Strategies to Win Tech-Age Workers
Old economy businesses need to change their ways or risk losing good employees to new economy companies.
So said Jeff Taylor, the CEO of the popular Internet job-search Web site Monster.com, as he addressed a group of executives March 8 at the Council of Growing Companies convention in San Diego. He outlined what businesses have to do to succeed under the new rules.
Last year began exceptionally for the Internet, with 17 ads for dot-com companies during the Super Bowl alone. And as more new startups appeared, old-economy employees began gravitating toward those jobs, Taylor said.
This was especially notable last year.
“Senior executives were starting to leave and go to dot-com companies. And it wasn’t your worst employees that were leaving, but some of your best,” he said. “This was an absolute nightmare for companies.”
By the end of the year, the high-tech bubble had burst, and businesses began breathing easier. Media pundits prematurely celebrated the news of dot-com layoffs as a sign the whole phenomenon would disappear, Taylor said.
But the use of this technology is firmly entrenched among high school and college students, who are used to e-mailing their friends and getting their homework over the Internet. These are the people who will be looking for jobs in the next few years, he said.
Also, the economy will heat up once again. Even now, the labor market is tight, despite recent news of layoffs in the retail, manufacturing and technology sectors, Taylor said.
Although unemployment recently climbed from 4.0 to 4.2 percent nationally, it was at 6 percent as recently as two years ago. In major metropolitan centers, the unemployment rate is much lower , as low as 1.7 percent in Silicon Valley, he said.
And it will get tighter. The universities aren’t turning out enough qualified engineers to fill all the engineering jobs that have been opening up in the last few years. And the number of baby boom-generation workers retiring in the next decade will be much larger than the number of entry-level workers coming in to replace them, Taylor said.
That means it will become difficult to recruit and retain employees in this tight labor market. Bidding wars and counter-offers for potential hires are already becoming increasingly common, he said.
“The war for talent is over and the employees have won,” Taylor said. “We are less in control as employers than we maybe were just a few years ago. I really predict that for the first time you’re going to have companies going out of business, not because they’re not good at building products, but because they’re not good at recruiting and retaining their employees.”
There are several things companies can do to remain competitive despite the challenges of the new technology. First, managers of old-economy companies must learn to adapt or risk falling behind, he said.
Taylor cited his own Web site as an example. The number of people using the Internet over the past decade has increased dramatically, while newspaper readership has remained constant, he said.
That means employers can use an Internet want-ad site like Monster.com to reach an ever-increasing number of potential hires. And the cost for a large ad online is about the same as a four-line classified ad in the newspaper, Taylor said.
Another way companies can get a handle on the new economy is to actively recruit from the pool of 65,000 former dot-com workers who had been laid off from the last cycle, he said.
“They are the next generation of what’s called i-workers. They understand intranets and extranets, they understand e-mail marketing campaigns, they understand about how to work in a new economy company they understand doing e-mail at 2 o’clock in the morning, doing whatever it takes to get the job done,” he said.
Another possibility is outsourcing. Large companies like Boeing Co. and Microsoft Inc. are already saving money by contracting work out to countries like India and Russia, each of which have a large labor pool, Taylor said.
Still another thing employers can do is to form personal contacts with everyone who submits a resume , whether or not they eventually get hired. Since rapid employee turnover is a fact of life in today’s job market, it pays to cultivate a relationship with someone who has an interest in your company, he said.
