It's the Economy: Little or No Job Creation
My accountant told me recently that, to her knowledge, not a single one of her clients offered employee raises in 2009. The economic outlook is too foggy and employers are uncertain about where and how political decisions at both the state level and the federal level will impact their companies.
At the same time, the engine of job creation is sputtering. In the IT industry, near and dear to my heart, and provided as an example, some older companies are expanding their employment ranks, while others such as Microsoft are shedding jobs. But the real story is that startup companies that can generally be counted on to create new jobs, are not starting up. Not good news for jobs and I recognize I am using just one industry as an example - but it's a powerful one.
Hiring new employees is also relatively at a stand-still for this reason, too. Although employers are replacing critical positions, many have stopped expanding because of increased uncertainty. Employers are waiting for the next decision that will affect business taxes; employee healthcare; employer requirements such as paid sick time, paid vacation time, and workplace regulations; the Employee Free Choice Act (EFCA); taxes on carbon emissions, and so forth. This list highlights just the tip of employer concerns.
In this environment of employer unease, the national unemployment rate rose to 9.8% (with some states and segments higher) in September, 2009, according to the figures available from the the Department of Labor (DOL). My understanding is that these numbers exclude the 400,000 or so people who have given up on job searching this summer, so my speculation is that unemployment is much higher than announced.
Edited (11-6) to add: In breaking news, the Washington Post reports that unemployment in October jumped to 10.2%. When you add in the people who have given up looking, the national unemployment rate is actually closer to 17%.
While the legislature passed an unemployment extension on November 5, the overall news on the employment front is not good.
The Federal Reserve, in a little remarked upon announcement in July, projected that unemployment would rise to over 10% in the next few months and that no net new jobs would be created for five years. News this week from the Conference Board indicates that, while 3,280,000 jobs were advertised online in October, 2009, this is a decrease from September, 2009 of 83,200 openings.
Much of this is sobering news if you are employed or an employer, and disheartening news if you are currently unemployed. My point, in making this post, is not to spread economic gloom, but to take a realistic look at what this means for employers and their employees. Alison Doyle, my colleague at About.com Job Searching, offers advice for the unemployed and job searchers.
Today, I'll focus on advice for employees and in a subsequent post, I'll feature thoughts for employers.
Advice for Employees in This Economy
Hold on to the Job You Have
- How to Make Your Current Job Work.
- How to Keep Your Job.
- In Danger of Getting Fired or Laid Off?
- How to Get Along With Your Boss.
- How to Get Along With Coworkers.
- How to Cope When Coworkers Lose Their Job.
- Job Offer.
If you do leave your current employer, do not resign until you have a written job offer in hand, signed, and accepted.
Image Copyright Paul Conrath / Getty Images
Hi – it’s funny you should be commenting on this issue of start-ups and small businesses stuttering: please allow me to share a blog I did just a couple of days ago myself which is meant to show how small business is not just not recruiting but the ongoing downturn is also having severe ethical and corporate culture implications – it’s slightly long for a comment but I think adds an extra important dimension to this insight.
It’s a growing Credit Curse for Business Ethics
Yes, I’m talking about a Credit Curse, not The Credit Crunch.
“The Credit Crunch” has by this stage got something a historic, clichéd ring about it. It’s something to do with very big banks which either went bust, or didn’t quite – and were then bailed out by the taxpayer…..and then kept coming back for more.
It’s an abstracted technical term which doesn’t really capture the ongoing and, if anything, the increasingly severe implications for smaller business – hence “The Credit Curse”.
I’ve come across three quite separate examples just yesterday. It’s not just that most smaller businesses are struggling and not recruiting, it’s also that their corporate culture is turning feral.
A friend who runs an online services business was telling us over lunch over he has completely changed his payment ethics. He said, ”I don’t pay now unless people are screaming. You have to be like this, even if you don’t like it, just to survive.”
Another friend, a web designer, told me how he has become much organised and determined in charging for his time, saying, “People are expecting more and more for less, or even free. They are phoning me with what seems like small queries – the kind of thing normally I’d just deal with – and then trying to slip more and more into that space between a quick query and formally charged work. I simply can’t do it all for free in this way.”
A third friend described to me the stresses within her commercial properties rental business. It has taken until now until strain has begun to show on a fair few of her client businesses. Other items would appear to have been cut in the face of some ongoing poor trade – but now the recession is beginning to bite deeper on some really core expenditure, like rents.
“These are mainly honest and hard working people, who would have come straight to us in the past if they had any difficulties. Now they are ducking and weaving, not always being straight with us about what is going on,” she said.
It’s a Credit Curse in that it is having a widespread and damaging effect on business ethics. Like desperate shortages for food often brings an ugly and primate survivalist selfishness in its wake, so the chronic shortage of cash is making things morally ugly in the business environment.
- It’s no mere Credit Crunch out there for a lot of businesses in the sense of there being a shortage of project capital; there’s widespread evidence of a Credit Curse, with money and goodwill getting very tight all round as slack in the trading chain simply runs out. This is no mere technical monetary thing in the upper reaches of the financial system.
It’s dog eat dog – and it’s ugly.