Technology greatness can quickly remedy the slow jobs growth reported by the Labor Department recently. They announced that only 38,000 net new jobs were created last month. Most economists were predicting 158,000 new jobs. This left many staffing firms, hiring companies, economists and job candidates wondering why this occurred despite: a) the 68th straight month of jobs creation and b) an average jobs growth of 219,000 over the previous 12 months.
Additionally, “real” unemployment remained at 9.7% or almost one in ten people you meet on the street! This is a more accurate representation of joblessness because it totals unemployed, underemployed (those involuntarily working part time jobs when they want to find a full time job) and those potential workers who have just given up looking for work.
Small, Tech Startups Are The Key Engine To Rapid Jobs Growth!
Historical research from the Small Business Administration and the Commerce Department demonstrates two important jobs creation facts. First, in the 30 years prior to the recent recession, almost 70% of the net new jobs were created by small businesses. Second, as a rule of thumb, for every $ 1 billion in revenues earned by small, entrepreneurial companies about 33,000 new jobs are produced!
Anecdotally, Strategic Search Corporation’s R&D, engineering, scientific, technical, IT and manufacturing recruitment divisions, as well as other technical recruiters we have polled over the past 12 months believe that these figures are greatly accelerated when applied to technology based companies. Unfortunately, many recent local, state and federal government tax and regulations initiatives have handcuffed entrepreneurs. Instead, if government is serious about both jobs and wages growth they need to provide incentives for technology-based entrepreneurs, including reducing taxes and regulations. This will take the shackles off the real engine for U.S. productivity, revenues and high paying jobs.
Technology Companies Also Need To Do Their Part: A 2-part Formula For Revenues and Jobs Creation!
Reducing government regulations and taxes is not enough to free up technology companies to generate a lot more revenues and jobs. Unfortunately, many technology firms fail to either: a) hire the right people or b) cultivate their top performers. Successful employers, especially in the R&D, scientific, engineering, technical, IT and manufacturing industries we cover as technical recruitment specialists, need to employ a 2-part formula for success.
First, they need to realize that hiring is a science. Professor John Sullivan, an expert in human resources strategy and professor at San Francisco State University, says, “Since we know that 5% of your workforce produces 26% of your output, you need to focus on hiring the people that really make a difference. You have to look at, when you hire someone, do they turn out to be a quality hire?”
Professor Sullivan also suggests using referrals of your top performers to acquire other similar, future talent. The key is companies need to do a better job of quantifying those behaviors and traits that make candidates successful on the job. Then do a healthier job of measuring and employing those behaviors and traits.
Second, even if your company’s technical recruiting department uncovers and hires the most successful R&D, engineering, scientific, IT or manufacturing talent for you, you still need to cultivate those candidates. Case in point recently deceased former Pepsi Chief Roger Enrico. Best known for turning Pepsi-Cola into a pop-culture leader through creative moves like the Pepsi Challenge and sponsorship deals with Michael Jackson, Madonna and Michael J. Fox, Mr. Enrico’s risk taking and entrepreneurship was developed over many years of his managers allowing his exceptional talents to fully flourish.
After Navy service in Vietnam and assistant brand management for Wheaties at General Mills, he joined PepsiCo in 1971 where he was quickly groomed and promoted to brand manager for Cheetos, then to Fritos before being moved to the company’s Japanese and South American operations. Then in 1983 at the age of 38, he was promoted to CEO. If not vigorously promoted and allowed to develop his risk taking and entrepreneurship, Pepsi would not have gone from a sleepy non factor to acquiring 30% of the U.S. cola market by 1985. None of this would have been possible without nurturing executives above him!
In Summary: Jobs Creation Success Equals: Government “Hands Off” Plus Companies Employing A 2-Part Formula!
Government needs to stay out of the way of the true engine for jobs growth, small, entrepreneurial, technology companies. Also, tech companies need to do their part by not only recruiting the best talent (especially technical candidates), but also to challenging, developing and cultivating their top technology talent. Otherwise, you may acquire the next Roger Enrico, but he may not fully realize his enormous talent.