Is your career a liability in disguise?

By Neil Patrick

This week, the shocking revelations about Volkswagen's emission testing fraud and the consequent collapse of its share price prompted me to think about balance sheets. Not corporate ones, but career ones.

We all have a career balance sheet. Do you really know the condition of yours?

Initial estimates suggest that Volkswagen could be liable for around $18bn of fines from its emission test cheating. Investor sentiment has tanked and around $30bn was wiped off its share price value within two days of the scandal becoming public knowledge.

In an instant, Volkswagen's balance sheet has been trashed. The reputation of perhaps one of the most trusted brands in the world lies in tatters. Yet I'd argue that Volkswagen could have seen this coming, they were just not paying enough attention to things that accountants never measure or show on a balance sheet. Things like culture, values and reputation.

I know that many people glaze over when accountancy language is used, but stick with me. This post isn’t about accountancy. It’s about something much more important to most of us. Our careers.

Most of us think about our jobs and finances from a profit and loss perspective. In other words, if our income exceeds our outgoings, we feel like we are doing well. And vice versa.

We rarely think about the balance sheets of our careers. That is, our career assets and liabilities.

But for 21st century career survival, a balance sheet perspective is now vital.

So what has changed?

In short everything. What the VW story illustrates is how even the most successful organisations can group think their way into catastrophe. The financial collapse of 2008 was the same situation. The dot-com bust of 1997-2000 was too.

These collapses were all based on fundamentally flawed balance sheets. Put another way, the assets were overvalued and the liabilities were undervalued.

Individuals are no different. But employers rarely consider their employees to be true assets. The hard truth is they are viewed as a cost from which employers seek to extract the most value they can. And I am sure I am not the only one who frowns with suspicion every time I hear a CEO say ‘Our employees are our most valuable asset’.

So employers typically adopt a profit and loss perspective when they think about their people. Investments in their people assets are rarely made for the long-term benefit of the individual, they are made with a view to the short term ROI for the organisation. In other words the things which impact their profit and loss not their balance sheet.

This was more or less fine in the 20th century, when we could reasonably expect to have a long and rewarding career with perhaps just two or three employers over the course of a 40 year career. But as average job tenure continues to fall, as skills become redundant ever faster and as individuals leverage increasingly tight incomes through borrowing, the nature of critical career assets has fundamentally changed.

What is a career balance sheet?

Of course it is statement of your career assets minus your liabilities. And the remaining balance is what I call career equity.

We cannot assign strict monetary valuations to these things, so accountants will doubtless lose interest at this point. But we can weigh up the balance between our assets and liabilities. And make a fair judgement about whether they are rising or falling.

These assets and liabilities are quite different to what most people imagine

Because they think about us from a profit and loss viewpoint, our employers encourage us to do the same. This can be fatal. See where the group think risk is?

Conventional thinking dictates we think of our career assets as things like skills, qualifications, experience, salary level. But they also include our creativity, our ability to adapt, our leadership skills, our communication skills, our professional network, our reputation, the amount of goodwill our network has towards us.

There’s a ton of stuff which is immensely valuable to us individually but which our employers will view at best as of secondary importance to us getting our jobs done well.

Conventional ideas about liabilities would cite things like poor employer references, short job tenure, periods of unemployment, haphazard career moves. In the 21st century, career liabilities include student debt, health problems, limited professional networks, obsolete skills, immobility, limited digital know how.

Employers do not measure or manage these things for us

They don’t. Because they see little immediate value to themselves in them. The paradox is that getting an outstanding appraisal, being promoted, earning big bonuses actually encourages an illusionary perception that we are doing well. We might be if we take a purely profit and loss view. But if we take a balance sheet view we almost certainly are not. If all our time and energies are directed at pushing things up on our career P&L, then we are doing very little to directly invest in our career balance sheet. And that’s the bit that matters to us most. A weak balance sheet or one which measures the wrong things makes us vulnerable.

So it’s quite possible to have a booming career P&L and a weakening balance sheet. And a weak balance sheet can be fatal whether it’s an investment, a corporation or our career. And because the performance measures and rewards that employers typically use encourage more of the same behaviours, we can find ourselves sleepwalking into career balance sheet erosion or even career bankruptcy.

As long as employers persist with a short term P&L perspective on employee value, employees run the risk of their career balance sheets being weakened.

Just remember this. It’s almost guaranteed that your employer doesn’t see you as an asset (despite their nice words to the contrary). They see you as a cost.

Provided your value to them exceeds your cost, generally, they will be happy and reward you. But those rewards mostly appear on your P&L, not your balance sheet.

If you really want to grow your career balance sheet instead of your P&L, it’s time to think very differently and that's probably not in the way your employer wants.

What drives employers’ attitudes to employee age?

By Neil Patrick

Age related behaviours in organisations are not random. They are determined by measureable factors and here’s what they are.

When we are early in our careers, we seek an employer that will support our career progression goals. When we are older, we want our age and experience to be duly valued and utilised. For all of us, knowing which employers have the most enlightened attitudes and policies in relation to their employees’ age is valuable.

The young grumble that employers don’t invest enough in their career development. That they cannot become experienced if they aren’t given opportunities to prove themselves and grow. The old complain their skills and experience are disregarded. That they are overlooked in favour of younger candidates.

Are employers' attitudes to age set in stone?

These are heated debates which often revolve around opinion and anecdote. Neither are very helpful in establishing what’s really going on. So I recently turned to the world of academic research to try and get some hard facts.

I wanted to know what information existed about the behaviour of different employment sectors in this respect. Could these things be measured? And if so, what can we discover about the different behaviours of different employment sectors?

This topic is now important to employers. Not because of a sudden growth in organisational empathy, but for the simple fact that demographic shifts are compelling organisations to recognise and respond to an aging workforce, which risks the loss of key skills and knowledge unless they can adapt to these changes.

But many employers are struggling with this

From an employers’ perspective, it is clear that many are struggling to adopt effective strategies to cope with current demographic shifts. According to Deloitte and the Boston College Center on Aging and Work, almost 6 in 10 businesses report that they have a weakness in creating and managing age diversity programs for their workforces:

“Among global business and HR leaders, 58% reported that their organizations have 'weak' capabilities in 'providing programs for younger, older, and multi-generation workforces’"

Source: Global human capital trends 2014: Engaging the 21st-century workforce. Deloitte University Press.

Do different employment sectors have different attitudes?

Yes and the good news is that age-related behaviours across different sectors can be measured. And when we measure it, we find that different sectors are behaving differently.

In this post I have distilled some of the findings of an academic study titled: “Looking up to regulations, out at peers or down at the bottom line: How institutional logics affect the prevalence of age-related HR practices”.

A couple of weeks ago I was delighted to hook up with one of the authors* of the study, Monique Valcour, Executive Coach, Faculty Affiliate at the Third Path Institute and Professor of Management at EDHEC Business School in Nice.  Monique is also a contributor the Harvard Business Review. She has also been kind enough to review and edit this post with her expert insights. Thank you Monique!

What was the scope of the study?

The paper looked at the aging workforce in the US and which business sectors are doing the most to progress their HR practices to respond to the changing demographics. As the baby boomers steadily exit the workforce, this places an imperative on organisations to respond.

Apart from the demographic shift, the recession has forced many organisations to become ultra-lean versions of their previous selves, making them more vulnerable to the loss of key skills and intellectual capital as the most experienced employees retire from organisations.

The research sampled 420 organisations in the USA with an average of 455 employees.

What factors determine employers’ HR practices related to employees’ age?

The research postulated that employee age-related policies, attitudes, behaviours and HR practices are determined by the presence or absence of three main “organisational logics”. These are the beliefs and assumptions that drive the way an organisation’s leaders interpret information and make decisions related to workforce aging and age diversity. These categories are not mutually exclusive - multiple organisational logics can coexist within a single organisation.

The three organisational logics identified in the study were:

1. A strategic logic exists in organisations that are focused on the financial impact (e.g., ROI, staffing costs) of HR issues and management practices
2. A benchmarking logic exists in organisations that seek to emulate peers in their sector, for example, by benchmarking their competitors’ practices and seeking awards that are recognized within their industry.
3. A compliance logic exists in organisations that are focused on adherence to legal obligations, such as those relating to non-discrimination and to safety.

Takeout: Like people, organisations often behave according to overall sets of assumptions and beliefs that affect what information they pay attention to and how they respond to the information they take in.

What did the research find?

Organisations are more likely to actively assess the age demographics of their workforce when they are focused on benchmarking competitors and/or on regulatory compliance. These two logics also tend to be reflected in HR practices targeted at older workers (like transferring knowledge from older to younger employees and providing options for phased retirement).

Organisations are more likely to use age-neutral HR practices, such as recruiting and promoting employees of diverse ages, when they have a strong strategic and/or benchmarking logic.

Which sectors are most likely to assess age so that they can respond to shifting demographics?

The research found little difference across sectors, except that organisations in the mining and oil and gas sector are more likely to use age-neutral HR practices, while organisations in the arts, entertainment and recreation sector are less likely to actively assess the age demographics of their workforces or to use age-targeted or age-neutral HR practices.

Which sectors are most likely to respond to the practices of their peers in relation to employee age?

The financial and STEM sectors were slightly more likely to adjust their behaviours and decisions with external references to their peers, while the health care and social assistance sectors were slightly less likely to make use of this benchmarking logic.

What this tells us

There are two elements in organisational behaviour required to create an effective response to the ageing workforce. First is the gathering and interpretation of relevant data. Second is the conversion of this data into HR policies, procedures and practices which contribute to addressing the problem.

This research proved that a correlation exists between these three organisational logics and behaviours which contribute to positive practices with regard to employee age. In other words, the greater an employer’s focus on strategy, benchmarking and/or compliance, they more likely they are to measure employee demographics and attempt to respond to the changes with positive practices to protect their future human resource.

The inverse is also implied – if an employer pays scant attention to strategy, benchmarking and/or compliance, they are less likely to have adopted positive practices for managing the demographic aspects of their workforce.

If you are seeking an employer with the most progressive attitudes and positive practices relating to employee age, don’t rely on hearsay or anecdote, but instead consider the presence or absence of these three organisational logics. It’s not a guarantee, but it is a statistically proven indicator.

*The full list of contributing authors was:

Ariane Ollier-Malaterre Rouen Business School, France (now at the Université du Québec à Montréal)

Tay McNamara Sloan Center on Aging & Work, Boston College, USA

Christina Matz-Costa Graduate School of Social Work, Boston College, USA

Marcie Pitt-Catsouphes Graduate School of Social Work, Boston College, USA

Monique Valcour EDHEC Business School, France

Are Britain’s worst brands also the worst employers?

By Neil Patrick

Here’s a question for you. If a firm serves its customers poorly, does that also mean they treat their staff poorly?

According to a new piece of research, this is exactly the case. The research by Belinda Parmar of LadyGeek led to the creation of what she calls ‘The Empathy Index’. I also think it’s a useful way of deciding who you really don’t ever want to work for…

It used a UK nationwide poll of 1,000 members of the public, online feedback from 25 employees per company and analysis of 100 of each firm's tweets.

Whilst we have to be careful to not mix up cause and effect, I think it’s fair to assume that if a firm tops the index, it is almost certainly a better employer than one from the bottom. Moreover, whilst I have no direct personal experience of working for any of these firms, I know people who do and I also have experienced most of them as a customer. The index certainly ‘felt right’ to me.

These are the firms that topped the Index :

Congratulations to Linkedin! I was also pleased to see John Lewis coming in at number 4 – their employees are always exceptionally helpful and deliver great service. It’s no co-incidence that they all seem to be happy in their work.

But it’s the bottom of the list that I was more interested in. This hall of shame contained few surprises for me:

The bottom firms on this table are fully deserving losers in my view. At the very bottom are Carphone Warehouse who ignore data privacy requests and Ryanair who advertise cheap "no-frills" flights to secure bookings and then upsell us “options” at the airport when we have no choice. If you have a musical instrument with you, that’s an extra £60. Airport check-in fee - £70. More than one bag - £40.

Ryanair’s chief exec Michael O’Leary's disdain for his customers and "colorful" language makes for headlines of the wrong sort. He must subscribe to the idea that there's no such thing as bad publicity. In 2012 Ryanair got a pasting on social media for charging a customer £236 to print out five boarding passes. He claimed that “99.98 per cent” of Ryanair passengers printed their boarding passes in advance: “To those who don't, we say quite politely: ‘B***** off’”. Just how exactly is that polite Michael?

In 2013, Ryanair was also voted by consumer group Which? as having the worst customer service in a survey of 100 of Britain’s biggest brands. Angry customers took to Twitter to tell the Irish aviation boss personally what an ‘a***hole’ they thought he was.

‘I am an a***hole,’ he admitted. ‘But they still love me.’ Erm, I’m not so sure about that, Michael…

I’ve never been a customer of Carphone Warehouse, but here’s what Wikipedia has to say:

During 2005, customers who bought mobile phones from Carphone Warehouse retail outlets alleged that their landline accounts were subsequently switched without their consent.

On 15 August 2006, the Information Commissioner's Office issued Preliminary Enforcement Notices for breaches of PECR (The Privacy and Electronic Communications Regulations) against Carphone Warehouse and TalkTalk for making marketing calls to people who are signed up to the Telephone Preference Service (TPS) or people who have asked that the company make no further calls to them.

On 28 October 2006, in a Times interview, Richard Thomas, Britain's Information Commissioner, stated:

“We're taking action against some of the telecom companies, Talk Talk and Carphone Warehouse… because we've had a lot of complaints that they've been telephoning people with marketing calls, people whose name is on the telephone preference service. And then we do these prosecutions, particularly with private detectives. We've got a big case coming up.”

And finally we have BT. One of my friends worked for them and described the culture he experienced as “Daily agony.” A bullying culture that set unrealistic goals and punishing schedules. An expectation that people would work seven days a week and be grateful. The outsourcing of customer service to India where unintelligible workers in call centres would robotically read scripts to customers making helpdesk enquiries.

I think it’s fairly safe to say that the daily working experience for staff of the firms at the bottom of this index is just as miserable as it is for their customers. In fact probably worse, because they have to endure working with unhappy customers day after day after day.

In case you wish to discover how your current or potential employer performed on the Index, here’s a link to the complete document.

Why are so many job descriptions cut and paste catastrophes?

By Neil Patrick

As employers increasingly complain about the poor quality of job applicants and trouble finding the skills they seek, the implication is that it’s not their fault.

Despite lots of searching and advertising, they just cannot secure the quality of talent and skills they aspire to; they are deluged with low quality applications.

Maybe, just maybe, they should look at their own actions first?

The advertised job description determines who applies. So why when I look at so many job vacancies are they cut and paste catastrophes?

Here’s a post for the position of Senior Marketing Manager I pulled at random today from Linkedin along with my own commentary in italics (with a few key points removed to protect the guilty):

Key Duties & Responsibilities: 

• Work closely with ******* to identify and promote new opportunities 
• Work with the web marketing team to develop effective, distributable marketing assets (tools, banners, emails) 
• Assist affiliate team to identify potential partners willing to host content 
• Write all required copy including: emails, product copy, press releases and social copy 
• Update existing material 
• Work with the design team to produce newsletters and mailings 

Senior Marketing Manager? A Senior Marketing Manager is more erm, senior than a simple Marketing Manager. Whilst they are not the principal owner of the marketing strategy (that of course is the remit of the Marketing Director) I would expect to see at least some mention of the word ‘strategy’ in this JD.

What about leadership? Nope. This is a hands-on, get the work done role. The only action verb here beyond the hands-on stuff is “Assist affiliate team…”

The reality is that this position is mainly about content production – writing copy, a bit of design work, and developing media distribution channels.

It’s not a Senior Marketing Manager position. It’s not even a Marketing Manager role. It’s a junior marketing  job.

Desired Skills and Experience

Essential

• Degree (or relevant experience) 
• Excellent computer competency 
• A versatile portfolio showing experience with a range of clients 
• At least 3 year’s copywriting experience 
• Strong problem‐solving skills 
• Excellent written communication skills 
• Ability to effectively manage own workload and perform under pressure 
• Quick to learn and adapt to new challenges 
• Highly organised and reliable 

My diagnosis is borne out by this section. The only job specific essential requirement is 3 years copy-writing experience. The rest is more or less generic (I'm being polite - it's a cut and paste isn't it?). So with 3 years copy-writing experience do you suddenly have the necessary skills to be a Senior Marketing Manager? I'm sorry to disappoint the person that is hired for this job, but you've not become a Senior Marketing Manager...

Okay. So let’s look at the requirements that an absolutely great candidate will also possess:

Desired 

• Marketing based degree 
• Knowledge of (our) products and services 
• Understanding of affiliate platforms and tracking 
• Experience of measuring the success of your writing and PR (for example through Google Analytics, A/B testing and campaign metrics) is extremely desirable 

Studied Marketing at university? Great. Tick that box. Unfortunately if you did that and then spent the next 3 years writing copy, the stuff you studied at university was probably written no later than about 2008 – when Twitter was just one year old and still in its infancy. See my point? The speed of marketing communications development is so fast today that even if you graduated as recently as 2010, most of what you studied has already been overtaken by subsequent media and marketing developments.

I’d expect a Senior Marketing Manager candidate to have experience of things like:

• Acquiring and disseminating customer, competitor and market insights 
• Product/service development and positioning 
• Promotional strategy development and implementation
• Experience of managing specialist external suppliers 

Nothing even remotely resembling this appears anywhere in this job description.

Nowhere in this JD is anything mentioned about goals and outcomes. Things like growing market share, enhancing product/service quality, monitoring and helping respond to competitor and market movements. A Senior Marketing Manager should be tasked with delivering marketing accomplishments. So an applicant that has a stellar record of such achievements won’t necessarily even get considered for this job.

A Senior Marketing Manager spends their time making their employer more competitive, more attractive to its customers, more profitable. Not writing copy and pushing it out to anyone who’ll take it.

I'm pretty confident that this vacancy will attract plenty of under-qualified applicants and very few great ones, simply because the best candidates will be entirely uninspired by the job description.

No salary or benefits information is given for this role. If this had been present, then at least the true nature of the job and whom it would suit would be clearer than the inflated job title infers. And it would demonstrate that the firm was being transparent about what was on offer.

Instead readers are just left with a sneaky feeling that the pay package will be disappointing or at best subject to fierce negotiation.

I’m left with the distinct impression that this firm’s ideas about marketing are all mixed up…and that their HR people probably need to skill up too…

Am I being fair, or is this just a unwarranted rant?

Who employs older workers?

By Neil Patrick

There are always plenty of opinions floating around about which types of business employ younger people and whether or not this is fair or even sensible. I have expressed my own views on this often enough on this and other blogs.

Today though I opted for a different tack. I thought I’d run some numbers and see what they revealed.

This was by no means an exhaustive study, but I was amazed by what I found.

I expected there to be few discernible patterns and yet I found quite the opposite. This quick dip into the numbers showed conclusively that there is a huge variation across business sectors when it comes to the age of their staff.

My method was simple enough. I just took the average age of employee as recorded in the Sunday Times top 50 best UK companies to work for as reported for 2014.

To calculate a simple benchmark, assuming a normal distribution curve based on an age range of 18 years to 65 years old, the mean age of employees should be 41 years. Higher than this means the workforce is older; and vice versa.

Now of course this assumes also that the available workers for each age group are the same, which of course, they are not. The baby boomers for example created a significant swelling of their age group as a proportion of the total population. So my purely mathematical average cannot be taken as wholly accurate – just a rough approximation.

Meet the new boss...

I simply wanted to discover which, if any sectors had demonstrably older workers and which ones had younger workers.

Since the average age of employee is not a significant factor in the Sunday times’ ranking, we can take this as a more or less randomised sample of the age profiles of people working in UK businesses today.

Moreover, every one of these firms has been assessed to be well liked by their employees, so they also represent some of our best employers.

So based on this data, here is the average age of employee at the top 50’s best UK firms to work for which I have re-ranked by oldest average age of employee to youngest (the original list rank is also shown in the first column):

N.b. I am not suggesting that my re-ranking makes any of these companies more or less ageist. There are plenty of perfectly valid and legitimate reasons why a company might have an older or younger age profile within its workforce.

What I was interested in was to see if there were any patterns when I re-ranked the list - and there certainly are.

The two firms ranking first and second are both from the same sector – contract catering.

Three of my list’s top 10 are from the pharmaceutical/medical sectors.

On the other hand, four of the five firms at the youngest end of this list were from two sectors – recruitment and financial services.

This list reveals other facts too. First the range of average ages 45 at oldest to 21 at youngest, reveals a huge range of age profiles across the sample firms – clearly if you are only in your early forties, you are already well past the average age of the majority of sectors’ employees.

Second, taking the approximate average age we’d expect to see – c.41 years - only 6 firms (12% of the list) had an average age that was older than this.

To sum it up, if you are over 40 and looking for work, contract catering looks like your best bet unless you have experience from the pharmaceutical sector…

Why are salaries such a secret?

By Neil Patrick

I've noticed a worrying trend in job advertisements. It’s been going on for a while now, but seems to be becoming the norm.

Job advertisements which use terms such as, “attractive salary and benefits”,  “salary negotiable based on experience”, or similar.

This is such a waste of everyone’s time including the employer's.

Employers and recruiters are struggling to handle the volume of applications received for many positions.

This omission of such critical information makes this problem worse. Without the benchmark of salary, both under- and over-qualified applicants will apply when many of them would either not take the job if were offered to them because the salary was too low, or will be too junior to be a serious contender.

It reeks of deviousness and destroys brand value.

What message does this send to the world? That you are open and transparent? That you are trustworthy? That you care about your employees? I’d argue that it is rightly or wrongly interpreted as, “We’ll see who applies and then with luck we’ll be able to hire someone who fits the spec, but whom we can pay far less than the market rate for the job”.

All those carefully crafted brand values are brought into question by this one simple omission.

To apply a less negative viewpoint, it’s also possible, that they are thinking, “If we get an absolute superstar applying who we have to pay over the market rate for, we don’t want to put them off applying”.

I’d argue that this is wishful thinking. Not specifying the salary or even the range, will mean that the real superstars assume the worst and ignore the vacancy. After all they are probably already being generously remunerated in their present position and they know that if someone really wants them, they’ll come knocking.

There’s no excuse.

I accept that in advance of appointing someone, it's often impossible to know the exact salary that is appropriate. An employer doesn't know who is going to get hired and what their precise experience level might be. But they’ll have a clear idea. So there’s nothing to stop them specifying a range of salaries.

I think it's just plain dumb and helps no-one including the employer.

I’d love to hear what job seekers, HR and recruitment people have to say about this, so do please post any opinions below.

The 6 job interviews you can never win

By Neil Patrick

There are six job interview situations, in which it doesn’t matter how good you are, how excellently your perform at the interview, you will not get hired.

For all the talk about excellent hiring practices, process quality, talent management, investing in people, the hiring process has always been and will continue to be imperfect.

If you are struggling to understand why you didn’t get hired for a job you were easily the best candidate for, I’m willing to wager that one of the following six reasons applied.

Here they are:

1. The comfort factor. These are legitimate reasons from the employer’s point of view. They include your current or previous salary level, relocation requirements, and recent experience. You may be perfectly willing to settle for a lower salary than you have enjoyed previously. You may also be perfectly happy to up sticks and move to the other side of the country. And learn any new skills that may be required. But the employer will perceive that these adjustments will make you feel uncomfortable and hence less motivated. Result: you’re rejected. 

2. Your age. I’m not just talking about discrimination against older candidates here either. For some roles, the grey hair factor is a definite plus. Of course it’s nonsense. And yes it’s also illegal, but it’s so easy to dodge the accusation of age bias, that plenty of employers can and do. 

3. The internal candidate. Firms will sometimes advertise a position even when they have no intention of hiring because they have an internal candidate lined up. But the company wants to legitimise this decision, so they benchmark the internal candidate against who else is available. The odds are heavily stacked against you in this situation. The internal candidate, who is a known quantity is almost guaranteed to get the job.

4. You’re better than your boss. Again, this is almost impossible to win; the hiring manager feels that you are so competent that you could do their job. Even if you don’t want their job, and are fully prepared to be a supportive sub-ordinate, they will worry that your expertise may expose shortcomings in their own. The outcome is they will choose a less well qualified candidate. 

5. Looks matter. Nepotism is alive and well. So is positive discrimination that favours the physically attractive. The sad truth is that if you’re up against someone with film star good looks, they’ve got an automatic bonus card over you. I won’t even discuss what happens when a hiring manger feels a strong physical attraction to a candidate. 

6. Incompetent interviewers. Hiring managers are rarely trained interviewers. This has always been a problem, and it’s become worse. In the tough times we have gone through, interview skills training for every manager is a luxury few can afford. The result is that at best your technical competencies will get a fair appraisal, but your other soft competencies and value adding capabilities will not. Worse an untrained interviewer may be easily influenced by a less competent candidate that can dazzle them with slick talking.

If you have an interview failure and any one of these situations applies, you can at least take consolation that even though you were not chosen, it doesn’t reflect badly on you.

Yes, it’s not fair. Yes it may be counterproductive for the employer. But you can walk away with your self-confidence intact…and that’s exactly what you should do. Never take such situations personally and move on, safe and confident in the knowledge that you were not beaten by a better person.

If you've experienced any of these situations, do please share these in the comments below.

What’s the real cost of ageism?

 By Neil Patrick and Dean Goranson

The debate about the relationship between employee age and business performance has been going on for ever. But the recent economic turmoil and its after effects on young and old alike have resulted in the topic surfacing again. It’s time to ditch the prejudices.

Employer attitudes can be summarised as:

Younger workers are cheaper to hire, have more up-to-date skills – especially in the area of technology and have more energy and dynamism. They also have lower reliability and significantly less loyalty.

Older workers stick around for much longer than their younger peers. They attain greater mastery of their work and have higher interpersonal skills. But they are also more expensive, less energetic and struggle with today’s technology.

This simplified view distorts the real question. There is no simple correlation between employee age and business performance. Having an older or younger workforce doesn’t automatically make your business perform better or worse. Neither does providing a great working environment result in greater staff loyalty.

The surprising truths about age and employee retention

According to the PayScale report, the Fortune 500 company with the highest median employee tenure (20 years) is Eastman Kodak. More than half of its employees are older than 50. Over the five years through 2012, according to data compiled by Bloomberg, it delivered an average return on assets of negative 12%...

Another myth is that creating a great working environment and culture for staff increases loyalty.

The perks Google lays on for its youthful employees are the stuff of legend. Free gourmet food all day, the best health insurance plan anywhere, five months' paid maternity leave, kindergartens and gyms at the workplace, the freedom to work on one's own projects 20 percent of the time, even death benefits. The tech behemoth has topped Fortune Magazine's list of best companies to work for every year since 2007.

Despite this, Google ranks amongst those with the highest employee turnover rates. The median employee tenure at Google is just over one year, according to the payroll consultancy PayScale.

The simple truths are staring us in the face

So what are businesses to do? If you hire younger people, you are burdened with higher turnover rates. If your workforce is older, you risk stagnation and loss of competitive edge.

A friend of mine, Dean Goranson has provided a valuable perspective which I provide below. It’s a simple tale about his experiences when seeking to get his watch strap repaired.

Here’s Dean’s tale:

A while back I had somehow managed to break the watch band on my high end wrist watch. I finally got tired of running around with it in my pocket, so one day I decided to go down to the mall and check out the jewellery stores to either get it fixed or replaced.

The first store I stopped in, I showed the young lady my watch. She took it to her manager. He asked if I had purchased the watch in their store. I said , ”No”. He replied, "I'm sorry it's the store’s policy to only work on Items we sell from here." I then asked, "Isn't that the style of watch you have in your display case?" "Well yes" was this young man’s reply "but we don't service anything we haven't sold. Perhaps you should try that watch band kiosk across from us." This young manager who must of been well on the south side of thirty was definite in his conviction of his being right. Consumer experience was nowhere to be found on his radar screen. So off to the kiosk to see if I would have any better luck there.

The experience with the young lady who also appeared to be well on the south side of thirty turned out to be quite similar to the first store I had stopped at. I asked if she thought she could fix my watch band. "No, I'm afraid I can't. We only sell watch bands and put them on for the customer and I don't have anything that nice. I have an imitation leather if you want me to put that on for you?" I declined and bid her adieu. I really started to feel like this was becoming a quest by this point with no easy answers, yet on I trudged to the next jewellery store.

At the third store I was confronted by another well under thirty something young fella. I showed him the watch and asked if they could fix it "Let me get my manager." The manager is summoned. Another under 30 something, he takes a look at the watch and say's "Let’s see what my jeweller can do with this." so over to the jewellers station we go he looks at it and say's " I'm not going to be able to fix this band." the manager then asks " Do we have any watch bands in the store to replace this?' They look and no can do. "Well, I guess we'll need to call home office to order a replacement."

The manager asked the jeweller to call home office for the order, the jeweller came back and said he couldn't get home office on the phone. The manager then asked, "Let me get your phone number and I will call you as soon as I find out something." At least this young manager was trying to make my experience worthwhile but his operation was in such a state of chaos that he couldn't make it happen. So off I went disappointed and frustrated.

By now I was a bit dejected at not being able to either get my watch band fixed or replaced. 

Walking past the fourth jewellery store, I happened to look in and behind the counter were a couple of ladies. They were well up in age - the grey hair, the glasses and thick figures. I thought to myself what the heck, let’s see if they have any ideas.

Into the store I go and ask these two women, "I've got a broken watch band is there anything you can do with it?" "Let me see it," the white haired gal asked. "We've only just started selling this brand of watch; you’ve had yours for a while haven't you?" "Yes I have." I could tell in her mind she was fussing over what her next move was going to be. "Let’s take this over to Bill and see what he has to say".

So over to Bill we go who turns out to be their manager. He too is older and greying. The lady explains the situation to him and asks what they could do to help me. Bill looks at me and says " Technically I'm not supposed to work on a watch we haven't sold to a customer, the upper management has the fear we will get sued by someone who claims we broke their stuff." “You wouldn't do something like that if I worked on your watch would you?" I said "It's already broken, what have I got to lose."

Bill then asks," Where did your watch fit on your wrist before the band broke?" I showed him and he said "Let me try something." He took my watch over to another counter and came back in a couple of minutes and said "See if that fits over your hand?" My watch fits better now than it did before I broke the band. Bill even refused to charge for the repair.

A few weeks later it was a good friend’s birthday. And I bought her some diamond earrings. Did I shop around? No I just went straight back to Bill…

Horses for courses

Dean’s experience is not research data of course. It’s no more or less than a personal experience. But I am sure it is one that most of us can relate to and have probably shared.

In the effort to improve on profits, what ends up being missed is the consumer experience - the part which keeps the customer coming back for more and recommending the business to others. This hinges on those people the business owner has retained to be the company’s representatives to the public. The higher the quality service the customer receives, the better the results for the business.

As Dean’s story relates, the different levels of service received directly influenced his purchase behaviour now and probably for many years to come. An older employee might be well past the dynamic approach of their youth. But today, youthful distractions are behind them. They have the rich experience of what quality service and customer care really mean.

It seems to me that it’s time to forget the over-simplistic and pointless debate of young versus old. What we need is a simple recognition that age in and of itself is not the issue. Skills and attitudes are what matter. If you want to give your customers excellent service, there is a strong argument for hiring older people. And even if they are slightly more expensive, you’ll recover these costs in longer tenure and enhanced customer loyalty. If you need the sort of perspective that the young have and can afford to replace them frequently, then hire young people. But don’t expect there’s anything you can do to keep them for long.

Let’s not be trapped by the pointless argument about which is better. The key to getting the best business results is about understanding the distinct merits of young and old, making hiring decisions on the value of each and the requirements of the role regardless of the candidate’s age.

How to “Wow” today’s recruiters

By Neil Patrick


Late last year, Vivian Giang wrote a post on Business Insider here where she reported the views of senior recruiters on how job seekers can really impress them.

Career community Glassdoor recently published its annual list of top recruiters. These hiring managers have seen a lot of talent, but they can still be impressed. And Glassdoor asked them to provide specific examples.

One thing really struck me about these replies. In almost every case, what is mentioned is how candidates that use social media effectively are the ones who “wow” the recruiters. And since Glassdoor’s list of top recruiters contains big companies that hire a lot of people, they are used to seeing a vast number of candidates month in, month out. So their replies deserve close attention.

The survey set out to discover exactly how candidates can impress these industry leaders. It asked them following critical question: "Was there a candidate that totally wowed you, and if yes, how did they do it?"

These are the answers that were given. If you think social media is irrelevant to your career prospects, (in spite of me banging on about it endlessly!), I think this might just change your mind.


Personal branding makes a difference

"I’m wowed when I see candidates take the same approach to branding themselves as I take to branding our business. Job seekers with cohesive messages about strengths, goals or overall work style show me they are thinking not about how to get hired or say the right thing, but about how to showcase a cohesive message and tell me something meaningful about themselves."

Carrie Corbin, associate director of Talent Attraction at AT&T


You CAN use Twitter to make valuable career contacts

"I met a very interesting executive search professional via social media. She reached out to me via Twitter to learn more about Sodexo. We set up a time to talk, and she asked questions about what it was like to work in a corporate environment. We talked about the differences between the search firm environment vs. the corporate recruiting environment. Over the next several months we had several conversations on various topics, and I was able to see her depth of knowledge and diversity of thought, and her genuine love of the profession. About a year later, when we had an opening in our Talent Acquisition Group, I immediately thought of her."

Arie Ball, vice president of Talent Acquisition at Sodexo

Getting attention is so much easier if you go multi-media

"Candidates are getting more and more creative with getting attention. I've been impressed with several candidates recently who have built infographics, videos and even full-blown websites to convey their experience! I'm a sucker for creative people with an awesome design sense. But, this is not required to get the job. Not everybody has these skills, and we always go for the best person for the job."

Steve Fogarty, senior manager of Employer Branding & Digital Recruiting at Adidas Group



Networking and doing your homework really counts

"The last few candidates to really impress me did so because they had cared for the basics so well. They had connected with our organization on Twitter, taken advantage of the information available on our company website with regards to PepsiCo's history, done their homework regarding our culture and reputation on Glassdoor and introduced themselves to other team members via LinkedIn. It wasn't about doing amazing and out-of-the-box things to get our attention as an employer, it was about doing the right things really well."

Chris Hoyt, global talent engagement and marketing leader at PepsiCo



Getting in touch directly with your ideal boss pays off

"She DM'd me on Twitter and is now my intern!"

Jeremy Langhans, manager of Global Talent Acquisition at Expedia



Helping the people you want to influence creates goodwill that eventually rewards you

"I found a candidate on LinkedIn over a year ago and unfortunately after interviewing, the position did not pan out. We stayed connected on LinkedIn and throughout this past year, this candidate reached out to me periodically as well as commented and, or, liked my LinkedIn status updates. During this time, I thought, 'Wow … this person is really engaging and really wants to work for Philips.' This past month, I had a position that became available, and I knew that this candidate was a perfect match. I shared the candidate’s information with the hiring manager as well as mentioned the level of passion this person has for Philips, and long story short, we made an offer."

Chrystal Moore, senior recruiter at Philips Healthcare



Finding shared or common ground is the basis of valuable relationships

"I think sometimes candidates think being 'wowed' needs to be flashy or complicated, but it doesn’t. One of my recent successes comes from a candidate we recently hired for a senior analyst role. He actually found me through my posts about Cleveland and our analyst opportunities at Progressive. He was relocating to Cleveland as a trailing spouse and when he found me realized we had both moved from Wisconsin to Cleveland. I scheduled a brief call to learn a bit more about him, and we hit it off from the beginning. He’d been following my posts so he asked great questions about the city, my company and then got to asking about specific positions he’d seen me post. I think the thing that wowed me was that he did his homework and was prepared to engage and ask questions. He starts with us in just a few weeks."

Melissa Smith, candidate developer at Progressive Insurance


Social media allows you to get so much more creative

"At my last company we had a candidate take our specific cloud-based presentation software and create a presentation-style resume for us. She tweeted this presentation to our company, and I noticed. After I shared this internally, the CEO tweeted back to her suggesting they talk further. Needless to say, she got the job and came in as a rock star because folks knew her unique story and were impressed by her creativity in taking our own product, using it to get noticed, and showcasing relevant skills for her position. You can read more about that story here."

Will Staney, director of recruiting at SuccessFactors



So there it is. It cannot be co-incidence that all these recruiters have described how the candidates that ‘wowed’ them used social media intelligently to find them, research them, build relationships with them and demonstrate their creativity and expertise.

And in every case that strategy paid off. And I’ll wager that many of them didn’t even have to go through ‘normal’ recruitment procedure channels.

Still fiddling around with your resume?



Read more: http://www.businessinsider.com/top-recruiters-reveal-how-they-can-impressed-2013-8#ixzz2taIGODJK

How to protect yourself from employers' bad recruitment practices

BY MARCIA LAREAU

Unconscionable treatment of job candidates this week has made me angry and determined.

Note: The names and places have been changed.

Client One: Tony

After numerous Skype and lengthy phone interviews, Tony was invited out for an interview. Salary requirements and other contract expectations had been discussed. The reputable regional organization (with a national reputation) informed Tony, a city planner, that he would need to pay his way for the interview. After finding out that there were only two finalists, Tony decided to go. The organization offered to pay for half of the plane fare.

The interview went famously. Tony integrated extremely well with the teams. He reviewed reports, attended planning meetings with the community, and advised members of the organization on handling current concerns. It turned out that the other candidate was internal to the organization and he and Tony hit it off as well.

He spent over $2,000 for the five-day interview. He lost a week of wages and time off from his current job, and was told after he returned home that they realized early on that they were not able to hire from outside. They knew this prior to the interview.

Client Two: Keri

Keri had several initial phone interviews with a recruiter. She had wanted to get into this specific company for several years. The first round of interviews went very well and the recruiter called to talk through salary figures for the second time.

Then Keri was scheduled to meet with several executives with the company. That went well and the final round was scheduled. When it was over Keri saw the Director in the parking lot who said, “I told them to just hire you…you were the best candidate, and I usually get what I want here.”

A few days later at midnight, Keri received an email from the recruiter indicating that they had selected another candidate!

Client Three: Geoff

Geoff received an offer from an organization in Los Angeles. It was a fair offer, however another organization had indicated they were interested and the position was higher in the organization.

So Geoff emailed them and said, “You’ve mentioned interest in me however, I have an offer. I understand that you are at the beginning stages of interviewing and if a decision is going to take two to three weeks, let’s save each other the trouble.”

The organization emails him back and asks if he can fly down three days later to interview. So Geoff talks to the L.A. office and they graciously extend time for Geoff to go to the interview.

Two days later the interview is pushed later in the week. It goes well and Geoff is told that they are speeding up the interview process. After Geoff flies home, he gets a call indicating that the decision will probably take two or three weeks.

How can jobseekers protect themselves?

Obviously, companies have been duped by jobseekers who have lied on their resume. This article indicates that 53% of resumes and job applications contain falsifications and 78% of resumes are misleading. So I can understand why hiring entities are on the lookout. But does that justify the mistreatment and misleading of jobseekers during the hiring process?

Here are some thoughts and actions that jobseekers can take to try to protect themselves.

First and foremost, it is critical that jobseekers know their fair market value for the position (and location) that they are applying for. This allows them to confidently give a fair salary range when asked. Consider www.payscale.com to learn this information. 

Jobseekers should remember that if the hiring entity isn’t spending any money to bring them to the interview, there is only marginal investment on their part. 

1. Ask specific questions before deciding to self-fund an interview: 

• How many candidates are being interviewed? 
• Is the company/business/agency able to meet the salary that we’ve discussed? 
• Are there and hiring restrictions that might hinder my being hired if I am selected as the most qualified candidate? 

2. Carefully vet the company: 

• The website www.glassdoor brings enormous value to jobseekers. There is salary information by company as well as information about company interview practices. 
• Search for the company at the Better Business Bureau website. Even if they are not a member, customer complaints are published as well as the company’s ranking from F to A+. 
• On LinkedIn, check out the company profile and also search for former employees that worked for the company. Request a 30 minute conversation with them. 

3. Get all points of the contract agreement in writing.

4. Trust your gut. If it doesn’t feel right… 

5.Give people the benefit of the doubt. 

What if the company doesn’t meet their part of the agreement?

Jobseekers are finding that once they are employed, the terms change. Perhaps they were promised a company vehicle because their job requires a lot of travel and hauling of product. Perhaps it was a raise after six months. Whatever the agreement, if the company doesn’t follow through, then the employee is free to look for other employment.

And the response is: What if they ask, “Why are you leaving after six months?” Answer: “We had agreements in place based on hopes of higher profit margins. But they didn’t happen and the company simply hasn’t been able to meet our agreement.”

You’re unemployed and can’t be picky…

This is a clear concern, especially when there is reason to believe that the company is taking advantage of the current economic situation and tries to hire under the market value.

If a jobseeker accepts the position, then my advice is to do that job as if the pay were excellent, build references and credibility, and if the company doesn’t rectify the situation, then move on.

Determined!

I am determined to do what I can to help. I will reach out to Human Resource professionals this week and begin a search for information that will lead to better practices. I ask ALL jobseekers and hiring professionals to re-establish the credibility of our business practices.

These are very difficult times. I encourage jobseekers and hiring entities to diligently and intentionally establish a foundation for trust. I challenge every employed person to do their job, to the best of their ability, to help create more jobs and get our nation back on track.

Do you need help finding a job? Forward Motion helps U.S. jobseekers worldwide. Call for a free consultation: (860) 833-4072.

Called a Creative Thinker, Career Futurist, and a person of unusual solution, Marcia LaReau founded Forward Motion, LLC in 2007. Since that time, she has become a recognized leader in the employment industry, and Forward Motion has spread across the United States and abroad to help jobseekers find jobs that fit.

Website: http://forwardmotioncareers.com/
Blog: http://forwardmotioncareers.com/category/blog/
Twitter: http://twitter.com/ForwardMotionUS

How social media is helping employers clamp down on ‘sickies’

By Neil Patrick

Absenteeism costs organisations a great deal. In Australia, it is estimated to be $3,000 per employee, equivalent to $28 billion a year.

And it occurs for all sorts of reasons. Some are almost legitimate, such as family emergencies. Others less so like hangovers.

I’m not going to condone it, but I think like a lot of HR issues, it needs to be tackled with smarter solutions rather than simply more bureaucratic and punitive ones.

The reasons people falsify sickness to take paid leave are of course numerous. But we shouldn't stereotype all young people as lazy, drunken wasters, just as we shouldn’t assume all older people are automatically weak and unhealthy.

If you’d like to see statistics about who is most and least absent from work, data from these Canadian Government statistics in 2011 showed that women aged 55-64 had the highest incidence of absenteeism at 11.2% and men aged 20-24 had the lowest at 6.4%.

And employers have a part to play too; they shouldn't just treat it as a 'crime' which has to be detected and punished. They should look hard at how the organisation accommodates the fact that their staff are people not machines. However inconvenient it may be when you are trying to run a business, the reality is that people have complicated lives which are full of unexpected and unplanned twists and turns.

The problem in my opinion isn’t lazy people usually (although there will always be some). It’s much more diverse and multi-faceted. Basically, life has a way of never quite going to plan.

Sometimes a domestic or family emergency happens, which is certainly not grounds for calling in sick. But it may be difficult to try and negotiate a day’s unplanned leave and easier just to feign sickness. It may not be us that is involved, but rather someone who depends on us and really needs us to do something for them right now. It’s hard to say no to a friend in need and many people just opt for the simplest and least negotiable choice which is to call in sick.

If employers treated absenteeism as something they can accommodate with better policies and more flexible systems, I think they’d have fewer sickies and a happier workforce.

It just takes a little imagination and some creative thinking. Like what you ask?

If you watch this short news report, you’ll see how one boss adopted a creative solution to keeping tabs on an employee who’d been caught taking a 'sickie’.

He ‘friended’ him on Facebook!

Smart move.

How to negotiate a 25% pay rise

By Neil Patrick

These days if you want to get a pay rise, you've got to learn how to play hardball.

It may be tempting to think that in these times of recession and cutbacks, getting a pay rise is almost impossible.

Well there’s a new trend happening which I thought I’d tell you about in case you've not heard the news…

It’s called the counter-offer. And right now plenty of people are securing pay-rises of an average of 25% when they hand in their notice and their current employers are immediately offering them a pay rise to try and keep them.

Why is this happening?

Employers know how much it costs them to recruit a replacement. Moreover you've got experience of the organisation, and inevitably after they have secured a replacement for you, that new person is going to take time to get up to speed.

And if your contract means you have only got to give one month’s notice, or even three, it’s going to be a tall order for the hard pressed HR team to find and hire your replacement in that time frame. Your employer knows that this means lost productivity in the organisation and hence lower performance. That costs them directly and indirectly and so they’re willing to pay to keep you, instead of incurring the costs of replacing you.

How do I pull it off?

Of course, if you’re going to adopt this strategy, it’s a pretty risky tactic to threaten to resign when you don’t have another job offer with higher pay. If you don’t have this offer, your employer might just call your bluff and you’ll be left high and dry.

So you’ll need to have a better offer from another employer first. But if you've got a solid set of skills, this isn't necessarily so hard. Remember, employers like to hire people from the ranks of the employed, not the unemployed, so if you currently have a job, you’re in a strong position to go looking for and get other offers.

It’s not unusual to be asked for written evidence of a counter offer. If you've got one, don’t be pressured into showing this. You are under no obligation to do so, and it’s a legitimate tactic to say that you will only do this when you have written evidence of a counter offer.

Should I accept a verbal counter offer?

Absolutely not. There are reports of verbal counter offers which are given in this situation which never actually materialise. An unscrupulous employer knows that if you accept a verbal counter offer and stay, your alternative offer will almost certainly have closed by the time you realise they have duped you.

Are there downsides and how do I counter them?

Yes there are potentially. In some cases, the counter offer may come with strings attached. For example you may have your targets increased and this could be to unrealistically high levels. If this is the case you’ll need to think hard about whether it’s realistic for you to achieve these revised levels of performance.

Some employers will interpret your tactics as revealing a lack of loyalty and commitment. Therefore you have to approach this with tact and no trace of bitterness. The best approach is to be pleasant, clear and honest about it. Don’t be tempted to go on about all the things you hate about your job or employer. This adds nothing constructive to the discussion. The more matter of fact you are about things, the more likely your employer will be willing to negotiate.

It’s a good idea too to demonstrate this by stating (regardless of whether this is true or not) that you were approached by a recruiter about the job, not that you went looking for it. This shows that you've not been actively disloyal - rather that you are just such hot property that everyone wants to get their hands on you!

It’s not just about the money

It’s a good idea to make other non-monetary demands at the same time. This might seem counter-intuitive, but here’s why. Let’s say you feel that you have been under-developed by your employer. It’s fair to point this out and ask what they will do in the next 12 months to help you develop your skills further. This sends an important message; instead of being seen as yet more cost, your employer is more likely to interpret this as evidence that you take your career and personal development seriously. And if you point out that your new offer includes more personal development opportunities, they’ll feel the need to be competitive in this area too.

Do I recommend this to everyone?

No I don’t. It’s a tactic that works for some and is happening more and more in today’s marketplace. But you should think hard before you adopt it. If you think your employer is going to renege on the deal or blacklist you, and you don’t really like your job that much, it’s probably safe to say, you don’t really want a counter-offer anyway.

On the other hand, keeping your networking alive and an eye out for potential openings is absolutely a good idea. Employer loyalty is thing of the past, so you shouldn't have too many conscience pangs about looking after number one.

An MBA Trashes The Degree’s Value

by John A. Byrne

Mariana Zanetti had been working as a product manager for Shell in Buenos Aires when her husband got a promotion to a new job in Madrid. One of her colleagues, a Harvard Business School graduate, suggested that the Argentine native go to business school for her MBA while in Spain.

She took his advice, enrolling in the one-year MBA program at Instituto de Empresa (IE) Business School In Madrid. Zanetti borrowed money from her family to pay for the degree. And when she graduated in 2003, it took her a full year before landing a job as a product manager for a Spanish version of Home Depot at exactly the same salary she was earning three years earlier without the MBA.

For years, Zanetti says, she wanted to write the just published book but didn’t for fear that it would hurt her professional career which included stints as a product manager for Saint-Gobain and ResMed, a medical supplier. Now that she has left the corporate world, Zanetti says, she can tell the truth about the MBA degree.

THE AUTHOR ADVISES APPLYING AND GETTING ACCEPTED AND THEN DECLINING THE OFFER

Her take, in a self-published book called The MBA Bubble: It’s just not worth the investment. “There is an education bubble around these kind of degrees,” she says. “I don’t think they have much impact on people’s careers. There are exceptions of course in management consulting and investment banking where the MBA is always valued. But for the rest, it’s a nice-to-have degree. It’s not that it harmful to you, but every market expert I interviewed for the book says that what is needed today is specialized knowledge and skills and an MBA is generalist training.”

Zanetti, now 40 and living in France, says it’s not like the degree had no value. “I met wonderful people. I met brilliant professors. I learned some interesting business concepts that gave me a global vision about business. It just wasn’t worth the cost in time and money. I could have had both those things by staying in the marketplace. I had the same salary as everybody else doing the same job, working the same endless hours. MBAs get high salaries but the degree has nothing to do with it. I was hired because of my previous work experience at Shell.”

She is even advising people to apply to a top school, get an acceptance and then decline to go. Put the fact on your resume and Zanetti thinks it will have nearly the same value as going to an MBA program for two years. “It’s like being an Academy Award nominee instead of an Academy Award winner,” she writes. “But the difference between the two is mortgaging our future and accepting the risk of getting stuck with a monumental student loan.” When an employer asks why you didn’t go to Kellogg or Yale for your MBA, she advises, just tell them, “I preferred to use that time and money to develop strategic skills to benefit my employers’ competitive advantage…”

‘FEW MBAS CRITICIZE THE DEGREE BECAUSE IT MAKES NO SENSE TO SAY ANYTHING BAD AGAINST THEIR BRANDS’
Of course, Zanetti’s complaint about the MBA is hardly new. It falls neatly into the growing genre of anti-higher education tirades that decry the rising costs of education and the lack of any guarantees. But what makes her MBA bashing somewhat different is that she has the degree from a prominent European business school and has decided to write a 232-page book trying to convince others to pass on the MBA, which has been the most successful degree in education in the last 60 to 70 years.

She believes that other business graduates would fess up to the same conclusion, if not for the fact that their views would endanger their careers. “There are few people criticizing MBA programs because it makes no sense to say anything bad against their brands,” Zanetti says. “I will not make a lot of friends with this book, but I won’t make enemies, either. People need to have this opinion.”

Her initial mistake, she says, was to blindly follow the advice of her Harvard MBA colleague instead of just getting a job when she moved to Europe with her husband. “I didn’t ask myself the right questions. Everyone was getting an MBA. Unfortunately, many people take the same position.”

EXTRAPOLATING FROM HER OWN EXPERIENCE TO MAKE BROAD STATEMENTS AGAINST THE DEGREE?

Asked if she thinks her opinion would apply to MBAs from Harvard, Stanford and other elite business schools, Zanetti has no doubt. “The same would apply to Harvard or whatever school because Harvard is three times more expensive,” she insists. “The benefits would have cost much more. The arguments I make are against all business schools. The improvement is marginal. It breaks a tie if you’re competing with someone who doesn’t have the degree, but people who have scarce skills an employer needs will get the job over you.”

Zanetti says she harbored these doubts and concerns about the degree, especially after being unemployed for a year after graduation. But she largely kept them to herself until leaving the corporate world a little more than a year ago. “I always wanted to have my own business and to teach,” she adds. “I didn’t intend to write this book.”

Then, she knocked out an article published in France about her ideas. The opinion piece seemed to resonate with a lot of people so she wrote The MBA Bubble, which will be published in France next year and was self-published in English this week. She has built a nice-looking website to promote the book, though for some odd reason she does not openly identify herself as an IE MBA. ”My school is not a secret,” says Zanetti, who lists her diploma on her LinkedIn profile.

Her primary arguments against the degree? It is oversold by the business schools with slick marketing campaigns. Most people enter MBA programs without really understanding the limits of the degree. The education costs too much and delivers too little value. And often times graduates are saddled with so much debt that it limits their ability to follow their true passions. They take jobs they don’t want simply to pay off their student loans. Even the value of the network a graduate acquires with the degree is exaggerated and hardly worth it.

’GET OUF OF HERE YOU SCUM!’

She’s unimpressed, if downright skeptical of data that shows MBAs get average increases over their pre-MBA base salaries of between 120% to 46% (see The MBA Bump: How Much To Expect?). And those averages are for all business schools, not just the prestige brand name places. Zanetti is also skeptical of surveys that show widespread satisfaction with the degree. One recent survey, based on the opinions of 4,135 MBA alumni, including 963 members of the Class of 2011, found that three out of four alumni of the class of 2011 with jobs reported that they could not have obtained their job without their graduate management education.

“Everybody is doing it and everybody still goes,” Zanetti sighs. “They take for granted that it is a good investment. Business schools manipulate the statistics and they are doing (unethical) things to market the degree. In France, one school hired a company to make fake (positive) comments in Internet forums. These schools have this university halo around them and talk about the labor market as if they are impartial but they are not. They are favoring their businesses. They continue selling things that do not have value because it has profit.”

Oftentimes, she says, her experience at IE was less than satisfying. “Business schools don’t treat you as a customer,” she says. “Applicants should not forget that they are customers and are buying something. We were even insulted. One day we were in a meeting room and the professional career director said to us, ‘Get out of here you scum.’ It was funny to him. I told him, ‘What’s so funny? I am paying your salary. I didn’t find it funny.”

‘YOU REALLY HAVE TO FIGHT TO CHANGE INDUSTRIES’

She says that IE’s director of career management also told students it was really hard to change industries with an MBA. “Yet they use it as a marketing claim,” she points out. But it is really not true. You really have to fight to change industries. I did change industry but in the same job function.”

Zanetti estimates that she uses no more than 20% to 30% of what she learned in her one-year MBA program. As for networking, she shrugs. “You spend time with great people, but you can spend time with great people in many places, It is not unique. The network is really overrated because you meet wonderful people everywhere. It’s just one way to meet people. You can build your own brand in less time than it would take to pay back your loans.”

This post originally appeared here:

http://poetsandquants.com/2013/11/07/an-mba-trashes-the-degree/2/

The Fed keeps the insane party going and why this is bad news for (nearly) all of us

By Neil Patrick

Investors have been stressing since the spring about the autumn prospect of Ben Bernanke printing just a few dollars less than before. Whole economies, like India, have wobbled before the threat that the Fed might print ‘just’ $75bn a month instead of $85bn.

And just as they were getting used to the idea, he goes and bails out at the last minute. This astonished almost everyone.What is going on?

Is this what Bernanke wants to leave behind?

I don’t wish to sound smug, but I wasn't as surprised as some people by this latest Fed stunt.

Why? Well primarily because the U.S. economy remains so weak that there are serious risks in actually initiating this move. Of course, the time must come when the Fed will begin to reduce its dollar printing. It seemed fair to assume that with all the advance warnings, the markets had already priced it in. And so I suspected the Fed might be much less aggressive than almost everyone anticipated.

But you can easily argue that the financial markets have become so accustomed to the Fed’s easy money policy that the quantitative easing (QE) addiction is now seriously ingrained. In other words, the stock market has consumed so much booze that the hangover will be so severe that it’s really preferable (not to say easier) to stay drunk.

However, I did think they would at least do something. After all, the market has been given so long to get used to this idea.

If the Fed actually ever intends to stop printing money, now looked a good time to make at least a small gesture in that direction. Even a 'tiny' reduction of $5bn would not have upset the markets too much, and would start getting them used to a slightly more sober environment with just a little less QE.

But no. Even with US stock markets at a record high, $5bn was too much for Bernanke. The Fed will keep printing $85bn a month…for now. And there’s no obvious prospect of this changing before the end of the year.

Markets were both stunned and cheered. Hurrah…even more free money! Gold soared. Emerging markets jumped, developed markets too. Pretty much everything jumped except the US dollar.

The Fed provided a few excuses for its inaction. It doesn't like the fact that bond yields have jumped so quickly in recent months. It’s worried about the impact of this on the housing recovery. And there’s also the threat of another big crisis over government spending, as the debt ceiling hovers ever closer.

As Paul Ashworth of Capital Economics pointed out, the Fed is probably “also increasingly concerned… that Congress could trigger a Federal shutdown within the next month.”

But if Ben’s really worried about the politicians not getting their fingers out to try and agree on something, then he should take away the security blanket of less QE. As Heidi Moore noted yesterday, he should “force the economy, the markets and Congress to think for themselves.”

So it’s all a load of shabby excuses. If this proves anything, it’s that Ben Bernanke doesn’t want to be remembered as the man who pulled the plug on the recovery too early, plunging the US into the Great Depression of the 2010s.

I guess he’d rather risk being remembered as the guy who acted too late to prevent the Hyperinflationary Collapse of the 2020s…

So what can we expect to see now?

It seems reasonable to assume from this that when it eventually happens, the actual process of tapering will be slow and gradual with the goal of minimizing any potential market disruptions.

But this is exactly where the difficulty lies. After all, everyone knows that the Fed cannot continue expanding the money supply at the current rate. Therefore, the challenge is how to taper with the least amount of market disruption.

I suspect this will include an increase in market ‘signals’ from the Fed to gauge the market’s reaction to various possible Fed actions and having contingency plans in place to try to control any unforeseen reactions and consequences which arise.

Tapering will mean higher interest rates

Most believe that tapering will result in an increase in interest rates, especially at the higher risk end of the market (like your mortgage, especially if it’s large or your earnings and credit history are anything less than dazzling). So, in this scenario, the housing market recovery could be stopped dead in its tracks.

Some claim that the delay on the part of the Fed may be politically motivated as it helps the Democrats by keeping interest rates low. Only a few people actually know the truth. The rest of us are left to speculate.

So, if the Fed does eventually get around to tapering, interest rates rise, the housing market recovery stalls, and the federal government deficit and debt spike, at election time, the Republicans will surely have all fingers pointed at the Democrats.

However, since the Republicans couldn't pull off victory in the last presidential election when the unemployment rate was at 8.2%, and given that Obama was the first incumbent in the modern era to be re-elected when the unemployment rate was above 8.0%, I’m not convinced that the Republicans would automatically benefit.

But the fact remains that higher interest rates will hurt everyone. Everyone that is except investors who rely on interest income.


So what does all this mean for most of us?

Even when the Fed does eventually begin to taper, I think they will remain “highly accommodative.” In other words, they will not raise short-term interest rates sharply for quite some time. Recently, when the Fed merely hinted that they might begin to taper, stocks sold off sharply.

So when will the Fed begin to taper? Some say December, but that’s during the holiday season, a period when the economy typically sees a brief uplift. This seasonality makes it difficult to determine if the economy is really healing or just experiencing a Christmas boost. Therefore, even though it’s possible the Fed will taper later this year, I don’t believe they will until at least 2014.

Despite the fact that many U.S. stock markets are reaching record highs, investors need to have a plan in place to protect themselves against a very possible and very nasty collapse. We are a long way from being out of the woods yet. In the interim, with GDP under 2.0%, stock values are continuing with their unwarranted inflation and I think the prospect of a severe correction in equity values just keeps on getting more and more frightening.

So investors need to keep a sharp eye on their assets and protect them against the very real threat of a severe market correction. Keep in mind that at some point, the Fed must take away the punch bowl, the party will end, and the probability of a collapse in not just stock values but other asset classes too is high. Really high.



What does this mean for investments, jobs and your financial future?

If you are an investor, hold your course. If you were happy with what you were doing before the 'vapor taper', you’ll be fairly pleased this week – almost everything you own has gone up in value (for now). Cheap Eurozone stocks still look good, Japan is still doing the business, and if you still have any, you should hang on to gold, specifically as a hedge against the real risk of systemic collapse which hasn't retreated from view.

But I wouldn't expect an easy ride in the coming months. Once the delusional euphoria of ‘QE forever’ wears off, there are going to be a lot of confused investors in the markets. As Eric Green at TD Securities told the FT: “The Fed had the market precisely where it needed to be.” This delay ” “ultimately makes that first step in the tapering process harder to achieve.(My emphasis)

It also puts a lot of pressure on Mark Carney at the Bank of England. On the one hand, Mr Carney will be pleased. The Fed’s 'vapor taper' might take some of the pressure off global interest rates in the short term. On the other hand, the slump in the dollar has pushed sterling higher. Carney won’t be too happy about that.

Anyway, what does this all mean for the outlook for most of us? Not investors with big investment portfolios but people with normal jobs and normal financial commitments. You probably know what I’m going to say.

The impact of this for business and hence jobs is hardly encouraging. The outlook for federal sector employment remains bleak and only confident growth in the private sector can offset this. But whilst share prices continue to inflate, significant GDP growth and business confidence remain elusive. So while growth in earnings remains subdued, employers will remain cautious about increasing workforce overheads.

We are likely to see a continued expansion of all the things employees dread like short term contracts, outsourcing, cut backs on management and support teams, in other words, growth in low paid, short term jobs, but contraction of secure, well paid jobs.

So we can all expect our basic costs of living to keep on rising at a scary rate amidst a really tough job market. And as I've talked about previously, slashing our outgoings, reducing our borrowings and increasing our income level through the acquisition of income generating assets is now more important than ever.

The crazy Fed party will end soon hopefully with a whimper not a bang.