In 2010, the median number of weeks jobseekers had been unemployed prior to finding a job in the USA was about 10 weeks according to the U.S. Bureau of Labor Statistics. Before the financial crisis in 2007, that number was only 5 weeks. What a dramatic change! Even more dramatic is the fact that once unemployed, the likelihood to find a new job decreases with the length of unemployment.
The most optimist executive search companies predict a recovery in the executive job market before the end of 2011 but I remain skeptical. Here is why:
Myth # 1: Executive unemployment rate is lower than the average: With an unemployment rate in North America, still above 9% in May 2011 this recession is one of the longest since WWII. Unemployment rate started raising sharply and has been above 9% since June 2009 reaching 10% in 2010. The most fragile employees are managers in their mid 40s and early 50s who are more likely to be laid off because they cost more, are considered to be less high tech savvy and not as flexible as their younger counter parts. During the current downturn, for most companies in developed countries, profitability has been driven mainly by cost reductions rather than revenue growth.
Myth #2 : Executives layoffs are temporary. I think in countries like Japan, Germany and many other parts of Europe, the executive job market is shrinking especially for babyboomers in their late 40s and older rather than expanding mainly due to demographics. For example, the forecast for Germany predicts that the German population will shrink from 82 million in 2011 to 65 million by 2060. Aging and shrinking population will decrease overall productivity and the economy in those markets will shrink as well.
Myth #3 : Executives from developed countries will be hired in fast growing markets. Despite an imbalance between the fast economic growth and the relatively low capacity for local education systems to produce top notch global talent in some countries, less and less expats will be sent abroad, in BRIC countries for example. Already multinational companies prefer to hire cheaper local managers, train them in Europe or US and send them back to their countries as locals ( See previous post: Is It The End Of Expat Executives ? ). New economies, especially China are catching up with new technologies and have an aggressive innovation management policy encouraging long term strategic investments even if for some economists it is plain stealing of western intellectual property rather than true innovation. Nevertheless Chinese consumers will drive the global economy for the next 100 years or so.
Myth #4 : Executives from large corporations will find jobs in small startups. Big company executives have usually big egos and are intrinsically rewarded by the power they have related to how many people they manage, the brand notoriety of their company and big numbers publicly announced in term of sales growth and profits. In small startups executives are generally doing jobs they would have delegated to ther executive assistant in their previous job. It is a whole different mind set. Startups’ managers must be more entrepreneurial and what executives learned in big corporations is often not applicable in small companies.
Myth #5 : Job market recessions are cyclic and will go back to ‘business as usual,’ I think that for the mid-level managers and top executives it will not be the case. Even if the economy recovers big companies will hired less people in general. During the last two years employees and organizations learned to be more productive with less people, it is unlikely that this trend will be reversed and some industries will continue to be outsourced to cheaper locations.
As said in the introduction of this post , the longer you stay without job, the thinner the chances to get a new one. So start searching for a job before you need to .Even if you are the big boss of a large corporation now, become a passive active candidate, learn how to network online, identify skills that are in high demand in your industry, learn about new technologies and other business sectors which are growing.
If you are around mid 40 or 50 think about who you want to be, what you want to do for your last 10,15 or 20 years of work. Look at one job at the time. The one you have now (and job search is one), the next one and your ideal job in order to have a chance to live your ideal life. Ideally work on your personal and professional development before you are at risk of being laid off. If you have already been laid-off from a big multinational or a small company, consider volunteering in non-for profit organizations for example, accept consulting jobs or temporary assignments to keep you afloat while you are looking for a more sustainable job. Starting your own company can also be an option.
What do you think, will we see a recovery of the global executive job market before 2012?
How is the executive job market in your industry ?
Do you have specific tips for executives who have been laid off ?
- BCG Focus: Aligning Talent for Global Advantage. How Top Companies develop the Right Talent in the Right Places. Boston Consulting Group (BCG)