Mortgage Crisis Could Create Talent Gridlock
KANSAS CITY (PRNewswire), October 7, 2007 - As the mortgage crisis continues to cut a path of destruction far beyond its initial sub-prime victims, it may create talent gridlock among once highly mobile professionals and executives.
During the housing boom, companies and job candidates alike enjoyed the benefits of rising home values and quick sales that made it easier for companies to attract candidates beyond their local talent pools. However, today's housing market is forcing candidates to reconsider career changes - and companies to reevaluate talent planning - because of relocation concerns.
In a statement, Tim Noble, managing principal of The Avery Point Group, said, "This is something that has come to a head in just the past two months and could considerably limit the talent pool for some companies in their recruiting efforts," says a leading national executive search firm. No longer are we limited to discussions about 'golden handcuffs'; we are now also talking about 'cement shoes' as the impact of the mortgage crisis may significantly impair a candidate's ability to relocate for a potential career opportunity."
Candidates who once readily accepted relocation as part of the career advancement process - but are now faced with declining home values and the rising inventory of unsold homes - may opt instead to postpone a career change or look locally for opportunities. For companies looking to attract the best professional and executive talent, this situation could mean some key roles go unfilled if local talent is not readily available.
"This is a recipe for talent gridlock, with candidates unable to relocate and companies unable to attract talent," says Noble. "To make matters worse, fallout from a potential talent gridlock may further depress some housing markets as many communities count on a steady influx of transplanted professionals and executives to drive housing sales."
With the end of the mortgage crisis nowhere in sight, companies will need to move quickly to reassess their recruiting efforts and relocation policies, as this crisis will not only have an impact on external hiring; it will also impact internal relocations and promotions.
"Companies will need to get creative if they want to hire the best talent under these current conditions," say Noble. "I don't see companies offering more home buy-outs in this current environment, but to attract the best talent, they will need to get creative with other tools such as bridge loans, loss-on-sale assistance, extended temporary housing and travel to ease the pain of relocation."
In the end, those companies and job candidates that take a realistic and long-term view of their individual circumstances stand the best chance for success under current market conditions. Today's mortgage crisis will soon become a major factor in career decisions for job candidates and in talent planning for companies across the board. Some companies, however, have yet to make this important connection.
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New Jobs Data Shows Unemployment Rising Among Least Educated Americans
KANSAS CITY (PRNewswire-USNewswire), October 7, 2007 - Following the first federal minimum wage hike in nearly a decade, the U.S. Labor Department reported an increase in overall unemployment in September, with the most significant increase occurring among the least educated Americans. And as the overall labor market participation rate rose, vulnerable groups like African-American teens and high school dropouts saw their participation rates decrease.
"Politicians continue to ignore the overwhelming evidence that minimum wage hikes increase unemployment among economically vulnerable groups like high school dropouts and African American teens," said Dr. Jill Jenkins, Chief Economist at the Employment Policies Institute. "Mandated wage hikes price many low-skilled Americans out of the job market. As last month's figures show, many have just stopped looking for employment."
High school dropouts saw a sharp increase in unemployment, up 10 percent from August. Their unemployment rate is up 1 percent from last year at this time and is over one and a half times the national average.
Overall labor market participation increased 2 tenths of a percentage point in September. But among African American teens and high school dropouts, participation rates declined by 1 tenth and 2 tenths, respectively.
Two prominent advocates for the increase in the federal minimum wage, New York Times columnist Bob Herbert and Economic Policy Institute economist Jared Bernstein, have both recently admitted that declining employment among low-skilled Americans can be explained in part by diminished employment opportunities.
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Survey: Most Executives Would Not Opt for Self-Employment, but Many Intrigued by the Prospect
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