Phil Hauck's TEC Blog

Sunday, June 6, 2010

Reflections on Job Creation

1. On "jobless recoveries": Coming out of the 2000-2002 downturn, the general consensus of my members was that FINALLY their investments in enterprise software, etc., were having a productivity impact ... they were able to add considerable volume without adding as many people percentagewise. This 2008-2010 recession, again a jobless recovery, their thinking is different. This time, as they laid off people, they formed employee committees to figure out other ways to cut costs and improve productivity ... which they've done very effectively. One member told me that he laid off 150 people, and to achieve the same volume as growth occurred again, because of the productivity improvements his people had found, they would only have to add back 87 people.
So, the first "jobless recovery" they attributed to software efficiencies, and the second to just old-fashioned value stream analysis.

2. Of interest, the American businessperson is very entrepreneurial/reactive. Give me a problem ... and I'll find a way around it. Example: The DAY after the health care insurance reform bill was passed (Mar. 23), I heard discussions of my members saying, "Okay, our personnel costs are going to rise ... but we have to keep costs down. What do we have to do?" They are figuring ways to add robotics, do without, find even more non-value-adding activities, etc. ... all with the intent of reducing the employee base per volume (reducing the need for people). (Not what the nation needs, but in the long run, preserves job retention and allows creation.)

3. At a recent TEC meeting, we did Significant Event Sharing of the nine members present. Most are now trying to add people. Of interest, FIVE of them (more than half) said that despite the high unemployment and lots of applications, they are unable to find enough "qualified" people to hire. They are struggling to find people! (One member said in one remote plant, more than 50% of applicants are being turned down because of drug use.)

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