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November 2, 2010 / Mervyn Dinnen

Keeping It Real

What is it with some people and optimism? I mean, it’s nice to be optimistic sometimes…I always believe my team are going to win, am certain that my son will deliver good grades in his exams, and hope upon hope that Santa will bring me a new iPod.

But I pretty much know that the economy isn’t going into overdrive any time soon.

I wrote a blog nearly a year ago called Optimistic Recruiters Don’t Create Jobs. It was true then and it’s true now. For the record:

Growing companies create jobs.

Companies grow when demand for their goods and services grow.

Companies hire when their capacity to fulfil the growth in demand is limited by manpower.

This is fairly basic stuff but you would be surprised how many people seem to think that if we think everything is going to be alright then it will be. I can accept that there are one or two exceptions, that in a GROWING economy some firms will forward hire in anticipation of future demand either in existing or new markets.

But now isn’t one of those times.

There was a bit of a fuss this morning with a CIPD press release forecasting that there could be as many as 1.6m extra job losses in the UK over the next 5 years. The belief is that these will be covered by new jobs created by the private sector…yet to do that would require a level of consistent growth in the UK economy that it is nowhere near achieving any time in the near future. The CIPDs economist – a man I have a lot of time for, and one who has been right a number of times in recent years – was speaking to the Treasury select committee and that was what he was going to advise. Let’s not forget that there are already 2.5m claiming jobseekers allowance (many more inactives not claiming too).

So what was being said here is that total unemployment COULD rise to 4m (almost certainly will be 3m+ it seems) and the very best we can hope for in terms of new jobs is 1.8m, but that the circumstances needed for those 1.8m to be created are not yet in place.

Shouldn’t have really been a shock to anyone. Certainly not a shock to anyone working in recruitment and HR, for whom you may have thought this was a quite relevant viewpoint. It should highlight a big cause for concern.

It is an economist’s view; one heavily involved in our industry, and as such I would have thought of interest to us.

But the problem seemed to be that it was a negative message. It prompted some angry tweeting and blogging, including this rant by Andy Headworth.

People seem to want optimism. Had the press release said that lots of new jobs were about to be created, maybe it would have been more acceptable.

Why? Because if we believe that the jobs are coming then they will come? Is this the CIPDs fault?

We will be getting new figures from the REC on recruitment activity soon…if the figures aren’t good will it be the RECs fault? (It won’t be down to them if the figures are good!)

All of this makes me think of the Stockdale Paradox. Written about in the book Good To Great, it refers to an American Captain in the Vietnam war who became a prisoner of war. On his coping strategy he said:

“I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

In answer to the question ‘Who were the people who didn’t make it’ he said

“Oh, that’s easy, the optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”

If you’re reading this blog there is a strong chance that you are a someone  who is advising or helping people in their careers and job searches.

I would have thought a bit of realism would go down well, a valuable part of helping people.

Apparently not.

Clearly I don’t believe optimism is good for business and I don’t believe that it is good for our candidates and clients. I do believe that we need to be honest and truthful and deal with things as they are.

So I’m throwing down a challenge.

Tell me why you think I’m wrong. Why is it better to be optimistic, even though it is may be completely unfounded? Are we in danger of leading those who rely on us in to the disappointment?

Surely we all want to be the Stockdales, coming out the other side….

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6 Comments

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  1. Natalie / Nov 3 2010 9:16 AM

    Great blog and talking point! Have recently finished reading that book as well for my “in-house management course”.

    I believe that optimism and positivity is infectious and that these type of people tend to have lots of “luck”. However you have to also be realistic. I am very much a believer in dealing with the now and present, immediate future i.e. next week or month. Trying to predict what is going to happen in 2015 is a very far away, we might have a totally new government and I might win the lottery!

    I know that forward planning is important in business, but let the strategist in the company deal with that, I want my team to remain positive and keep doing what they do best regardless of what might be round the corner. Good recruiters will be reactive and able to flow with the times IMO.

    @NatalieJayW

  2. tracey dunn / Nov 3 2010 3:18 PM

    Mervyn

    I’m sorry but I’m totally with Andy on this one

    Surely looking at the cup as half full rather than half empty has to be better for the soul? Just as recruiters are picking themselves up – and as leaders are trying to re-motivate their teams they get bashed on the head yet again. But far more importantly, if we are talking about keeping it real then its important to look at the facts. Dr Philpott says that their predictions are based on “soundings from public sector managers” What does that mean? When challenged by the IOD on this he then says in a later statement “Our labour market predictions are based on analysis of the experiences and detailed predictions of our 135,000 members” Hmm – so not soundings from public sector managers then? So which is it? And if it is 135,000 members then that probably completely ignores a large proportion of the SME community who don’t have CIPD members on their staff. Mine included. And we have created three new jobs already this year and have plans for more. Believe me I know better than most how many different angles – postive and negative – you can get out of statistics. Bad news gets more column inches – fact. No matter what the economic pundits say, recruiters have to go by what is happening in their own firms and their own markets because that is the only reality they have. As Dr Philpott himself concedes in his statement about the IOD criticism today: ” The IoD are entitled to disagree and correct to conclude that no-one knows for sure what the future holds.”

  3. thehrd / Nov 3 2010 3:29 PM

    Surely the point here is that we should be realistic….the IoD are renowned for stupid over reactionary statements so for them to criticise is laughable. And as for MPs…well they never exaggerate do they?

    The point is that we need to work for the best but prepare for the worst. I’m on record time and again saying that I think unemployment will top 3m. That isn’t being a doomonger, but saying we need to think about how we will cope with it. That is just being down to earth and practical.

    Or maybe we’re all just fucked……

  4. @BillBoorman / Nov 3 2010 6:09 PM

    Mervyn,

    Thanks for the post. I see two things happening at the moment that we should be trying to figure out.

    1) reported jobs are increasing.

    2) unemployment is rising. (At a much slower rate than last year, but rising none the less.

    There are jobs being created and new openings, (theres even a “war” for talent in some sectors.) The problem is that the skills/experience needed in the job openings are not those held by the unfortunate people being laid off.

    The real challenge is how do we find people for the jobs that are open, and how do we reskill the unemployed to get them back to work?

    Bill

  5. Local Job Search / Nov 3 2010 10:33 PM

    Awesome Post. Great article and really well explained. Thank you! Definitely Bookmarking this. Visit you sometime again soon 🙂

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