Tag Archives: John Challenger

Road Time Costly to Companies, Employees

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Too much traffic, too long a commute and too many workers losing productivity. The challenge is not new and neither is the potential solution of telecommuting. The leader of one of the nation's leading workplace consulting firms says it's time for change.

“By not expanding the use of telecommuting, employers are negatively impacting the environment, worker productivity, job satisfaction and, most importantly, their bottom lines.  And, it is not a lack of technology or other resources that is holding back this expansion.  It is simply a lack of vision, a shortage of trust and an irrational adherence to antiquated notions of how and where work should be done,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.

The call for increased telecommuting comes on the heels of a new report from the Texas A&M Transportation Institute, which revealed that increased traffic congestion is forcing the nation’s workers to build in extra time to their daily commutes to the tune of $121 billion in wasted time and fuel in 2011.

Obviously, there are many occupations that are not conducive to telecommuting.  However, the number of jobs that can be done remotely have grown significantly over the last two decades and will continue to expand going forward.

The latest available statistics from the Telework Research Network indicate that 3.1 million people, not including the self-employed or unpaid volunteers, considered home to be their primary place of work in 2011.  That is roughly 2.5 percent of U.S. nonfarm payrolls.

Overall, the number of telecommuters increased by 73 percent between 2005 and 2011.  However, according to the data, the number of telecommuters remains well below the potential.  The Telework Research Network estimates that as many as 64 million U.S. employees (just under 50 percent of the workforce) hold a job that is compatible with telework.

“Companies are embracing the latest portable tablets and laptops, social networking, video conferencing and many of the other technological advancements that make telecommuting increasingly viable.  However, in many ways, companies are stuck in the old way of doing business, where people are expected to work from 9 to 5 and are judged more on the amount of ‘face time’ than on the quantity or quality of output."

Companies that have embraced telecommuting have found that their remote workers are just as, if not more productive than traditional office workers.  Analyses of Best Buy, British Telecom, Dow Chemical and many other employers have found that teleworkers are 35 percent to 45 percent more productive.  American Express found that its teleworkers produced 43 percent more than their office-based counterparts.

In addition, various studies have found that telecommuting employees are happier, more loyal, and have fewer unscheduled absences.
 

Optimism From the Job Cut King

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Forgive the poor E.F. Hutton pun, but when John Challenger talks, people generally pay attention. The Chicago-based Challenger, Gray & Christmas firm is viewed as the guru of job market reports and trends — and John Challenger is its leader.

Usually quick to report on employment cuts and leadership exits, Challenger is out with an analysis that says the economic recovery is no longer "jobless." Here’s some of what he offered:

“The pessimism about the job market is evidenced in latest readings on consumer confidence by the Conference Board and the University of Michigan, both of which declined in March. However, while some might perceive that the job market is standing still, it has actually made significant strides since the end of the recession in several areas, including planned layoffs, private-sector payrolls, unemployment and hiring,” noted Challenger.

In the Challenger analysis of government data it found that, much like the previous two recessions, private-sector payrolls continued to contract following the declared end of the recession. From July 2009 through February 2010, private payrolls experienced a net decline of nearly 1.2 million jobs, according to the latest figures from the Bureau of Labor Statistics’ survey of employers. Since February 2010, however, private sector employment has seen net job gains for 13 consecutive months, adding a total of 1.8 million jobs. As of March, there were approximately 108.6 million Americans on private sector payrolls, which is about 93 percent of the pre-recession high of 115.6 million.

Employment is also growing in the Bureau of Labor Statistics’ household survey, which is used to establish the unemployment rate.  Similar to private payrolls, overall employment continued to decline during the six-month period following the end of the recession. However, over the past 15 months, there have been 10 months of gains for a net increase of 1.9 million newly employed Americans.

Meanwhile, the unemployment rate, which initially continued to rise for four months following the June 2009 end of the recession to a high of 10.1 percent in October 2009, fell to a 24-month low of 8.8 percent in March.  By contrast, unemployment peaked 19 months after the end of the 2001 recession and, following the recession that ended in March 1991, unemployment continued to rise for 15 months.

“There is no reason to think that these positive trends will not continue, even with the threat of higher fuel costs. Based on our tracking of planned job-cut announcements, which tend to be a forward-looking indicator of how employers see future business conditions, there are no signs of sudden reversal of fortune,” said Challenger.

Monthly job-cut announcements are at their lowest levels since the late 1990s.  In fact, the 130,749 job cuts announced between January and March represents the lowest first-quarter total since 1995.

At the same time, planned hiring announced in the first quarter totaled 112,942, which is more than double the 53,675 planned hires announced during the same period a year ago. 

Vacating the Workplace

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The economic woes may not be over yet, but times have changed enough for more employees to enjoy summer vacations in the coming months. So say the workplace experts at Challenger, Gray & Christmas, Inc.

I do, however, have a problem with the advice on staying connected even while away. Read on.

According to John Challenger, "Where we will see the change this year is among the employed who, despite their job status, were hesitant to take paid leave during the recession for fear that it would further erode their already fragile job security. This year, while employers have been slow to ramp up hiring, they have clearly shifted from a strategy focused on downsizing to one emphasizing retention. In this environment, it is much easier to put in for vacation days."

Through the first quarter of this year, announced job cuts declined 69% from the same period a year ago. In fact, the first-quarter total was the lowest for those three months since 2000. And the 38,326 job cuts in April were the lowest for any month since July 2006.

"The threat of downsizing never really disappears," Challenger adds, "but job security is in a much better place this year. Some employers may, in fact, encourage workers to use vacation time to decompress. The temporary and very mild impact on workplace productivity caused by vacationing staff is more than offset by a rested workforced that is likely to be more productive over the long term and probably more loyal as well."

The workplace authority says that while job security is improving, it is still recommended that employees keep the lines of communication open with employers.

"You don’t have to spend a part of every vacation day working, but you want to take your cell phone and laptop and make an effort to occasionally check in with the office. If you want to be missed a lot, do not disconnect," Challenger says. "As employers shift toward retention mode, many will be eager to let you enjoy your vacation without interruptions from work, but make no mistake, your efforts to remain connected, even if unecessary, will be appreciated and remembered."

Not sure I buy that last piece of advice. Being available for true emergencies, if needed, is one thing. But checking in for the sake of showing you are still engaged while you are supposed to be resting and rejuvenating is another. There’s a reason it’s called vacation.               

Networking Helps Net That New Job

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I guess I better keep working hard and keep the job I’ve got. Because while I’m very comfortable sitting down with business and political leaders for interviews when I’m asking the questions, I’m not a big fan of social events or that one-on-one process of making contacts.

New survey results, however, put networking at the top of the effectiveness list for job seekers. In somewhat of a surprise, HR pros ranked social/professional networking sites (LinkedIn, Facebook, Twitter) second on the list of top tools. Least effective among the respondents were job fairs and newspaper help wanted ads.

While the Internet has the potential to be very useful for job seekers, John Challenger of the Challenger, Gray & Christmas firm said that it has become the primary tool for many, when it should be considered secondary to the traditional technique of networking and meeting prospective employers in person.

“It is important to remember that the job search is a multifaceted process.  Those who rely on just one tool, even if it is networking, will take longer to find a position.  The problem with the ease and accessibility of the Internet is that many job seekers make it their primary job search tool. 

“Overuse of the Internet also threatens to prolong the hiring process on the employer’s end, as well, by inundating employers with irrelevant resumes.  Some human resource executives complain that for every qualified candidate that comes in from the Internet, there are 10 to 20 who do not even come close to being a good fit,” said Challenger.

“The more irrelevant resumes that hiring managers have to wade through in order to select the handful to bring in for interviews, the longer it takes to fill the position.  One result of this has been the increased use of digital screening software that scans incoming resumes for keywords.  Resumes without the right words are filtered out of the process.  This will make it even more difficult for job seekers to get their resume in front of the hiring executive," said Challenger.

“Job seekers must learn how to use all of the tools at their disposal, including networking, the Internet, newspapers, job fairs and even cold-calling employers,” he concluded.

More Make the Call to Start Own Businesses

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Entrepreneurism is on a slight rise, according to a new survey. In the second quarter, 8.7% of job seekers went back to work by starting their own businesses. This was an increase from 6.4% in first quarter 2009 and a low of 2.7% in fourth quarter 2008.

The increase comes despite credit that is still difficult to obtain and sluggish spending by businesses and consumers. John Challenger of the consultant firm Challenger, Gray & Christmas says, “Small business owners do not quite see the light at the end of the tunnel, but there is a sense that we have at least passed the halfway point.  Once banks are in a position to open the lending spigot again, we are likely to see a surge in start-ups.”

Despite the increase, the numbers remain quite low compared to past years.

Even as the percentage of job seekers turning entrepreneurs edges toward 10 percent, it is unlikely that the start-up rate among the unemployed will reach levels achieved in the late 1980s and early 1990s.  Between the inaugural year of the Challenger Index in 1986 and 1992, the start-up rate averaged 16 percent annually, peaking in 1989 when 20 percent of job seekers became entrepreneurs.

From 1993 to 1996, the annual start-up rate averaged 10.6 percent.

Know What the Jobless Numbers Mean

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The latest unemployment statistics released last week showed another statewide increase in Hoosierland. That news, however, does not mean that pessimism should reign. History shows that job creation is one of the last areas to recover. Thus, unemployment stats are a result, not a cause, of economic normalcy.

Need evidence? Following the recession that ended in November 2001, the unemployment rate reached a peak of 6.3% in June 2003. Similarly, in the July 1990 to March 1991 downturn, national unemployment went from 6.8% at the end of the official recession to 7.8% in June 2002.

Earlier recessions did not show such a long lag time. Reasons for the change include more reliance on the service sector today, less use of temporary layoffs and a large increase in part-time workers. John Challenger, CEO of the outplacement firm that bears his name, explains:

"A lot has changed since these earlier recessions. For one, companies are less likely to use temporary layoffs today. They are also more likely to use part-time employees whose status can move to full-time as the economy improves. Unfortunately, the movement from part-time to full-time does not impact the unemployment rate.

"The earlier recessions occured at a time when our economy was dominated by manufacturing. It was common practice for plants to temporarily shutter operations, only to call back workers when business conditions improved. The service sector, where today’s employment is concentrated, is less likely to make temporary cuts.

"Companies are also turning increasingly to part-time workers during these slowdowns. There are about nine million people currently working part-time for economic reasons. That is the largest number of economy-related part-timers in government records going back to 1955. As the economy improves, employers are likely to move these workers to full-time status. However, the unemployment rate will not reflect the improving conditions since these part-timers are currently counted as employed."

One more factor at play. Today’s technology that increases productivity allows employers to be more selective in their hiring. Many jobs require more technical know-how and skills than in previous generations, lessening the number of people being hired just because they’re a "warm body."

So, while the monthly numbers are important, don’t confuse them with lack of economic progress.