Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession, but perhaps no industry was affected more since the turn of the millennium. About a quarter of a million manufacturing jobs were lost over the course of a decade, the large majority of them prior to 2008. As the recession spread from one industry to another, manufacturers often still let go of the most employees.
The cycle was vicious, and it continued month after month.
How is it possible, then, that less than two years after the economy turned, manufacturing is on the rise again? Manufacturing activity increased again in May, according to the Supply Management’s index, the 10th straight month of growth. And even though that growth has started to slow a bit, growth is still growth. Were the 2008 levels just so low that any growth is significant? Or is the sustained increase in manufacturing a sign for the rest of the economy? Nothing is certain, but all of the indicators do point up, however modest, rather than down.
“Texas was about nine months behind the rest of the country, so we were kind of latecomers to the party, I guess,” says Randy Gregg, assurance partner, BDO USA LLP. “But over the last few months, the recovery appears to have started, although it has been tentative and slow, and there are some mixed signals out there. Many companies appear to be generally optimistic about 2010 and thinking that it will turn at the end of the year and they will be able to get back to business.”Prepare for more change
What was normal two years ago will almost certainly not be normal during the second half of 2010 or even during the first months of 2011. What was normal then, in fact, might never be normal again. Even though it might be a cliché, change really is the new normal in manufacturing.
Among those changes are the new gaps in the supply chains of some larger original equipment manufacturers, the result of smaller companies closing, which might cause delays and problems in receiving supplies in a timely manner. A number of industry experts say the availability of credit will also likely change, what with banks starting to somewhat relax their requirements. But the biggest change might be the addition of manufacturing jobs.
“Manufacturing is now the only business sector that has been adding jobs for five months,” says Emily Stover DeRocco, president, The Manufacturing Institute. “Manufacturers have added 126,000 new jobs.
“But the focus is going to continue to be more on what we call mass customization, as opposed to mass commoditization. This reflects, again, the industry’s response to globalization, which is that U.S. manufacturers, in order to maintain their global leadership, have had to move to a higher quality and a higher value product.”
And that higher quality product will almost certainly lead to more changes in the way manufacturers and so many other companies plan and do business, the ripple effect across industries.
For example, if you have not already reassessed your vision and your plan for your company, that should move to the top of your priority list.
“Control costs,” Gregg says. “Take a hard look at your business process to make sure you’re as efficient and as lean as possible. Work with your tax advisers and make sure you’re taking advantage of all the tax breaks that are available to you. The (Hiring Incentives to Restore Employment) Act gives some breaks for hiring new employees. Those kinds of things have really helped some companies out. Making sure they are taking advantage of everything that is available to them, I think that is important.”Keep the long term in perspective
Two years ago, few manufacturers were prepared for the recession. But you can prepare for the ascension, however slow and modest it might be and whenever it does become more noticeable, by being smart during these coming months and years.
You might think about diversifying your product lines into other markets, so you aren’t as dependent on single-source customers, and, more generally, diversifying your portfolio. You might also research how to best tap in to loans, grants or tax credits that are available from various departments of federal, state and local government. And you will likely want to consider your risks, especially over the long term.
“This is not a time to blink,” Gregg says. “This is a time to really focus on the business and really try to manage as best you can with the best advice you can get.”
Technology and education, as would be expected, can also play a role in increasing your business. Several experts discussed how the advantage of U.S. companies is U.S. technology. Domestic manufacturers continue to be at the forefront when it comes to utilizing technology in their processes. To ensure that the technology is operated correctly and efficiently, workers should be more educated than they were 40, 20, even 10 years ago, and with so many quality workers still unemployed, there is a deep talent pool from which to hire.
Most important, though, is to do everything with the long term and that refers to years and decades, not just months and quarters in mind.Ask questions
As you prepare for 2011, it will be important to keep any number of questions in mind. What those questions are will depend on your industry, your goals and your financial standing at the moment, but there are some questions that all businesses need to be asking right now. And those are: What is happening in your industry? Is it expanding or contracting? Is your company expanding or contracting? Where do you see your company in 2015? In 2020? Is your company in the right market? Is it in the right position in the market? What are the strengths and expertise that your company has that could be adapted to another market or product line? Where can you turn to think through your situation? Will your company be able to receive a large enough line of credit during the next year? Will you be able to fund your growth? How sustainable are the current demands? And, the great unknown, how will global events affect your company?
“Because of raw material increases, I know a lot of companies are trying to spend more resources to try to find the best deal out there, to get good pricing, and then when they do find it, trying to buy in bulk to try and get quantity discounts and so forth,” Gregg says. “And that is helping their costs actually going forward and I think that’s going to pay dividends in the future.”
With all of that in mind, you will also need to think about innovation as much as ever. How will you move ideas from the collective mind of your company to the drawing board to the marketplace? Live in the present but remain focused on the future.
“Eyes on the future,” DeRocco says. “But remember the volatility of this market.”
Corporate commitment to diversity and inclusion enables companies to better serve the needs of customers, their employees and the community. Not only is it the right thing to do, but it also is the smart thing to do from a business standpoint.
Embracing diversity in your work force, through your supplier base and within your community creates a competitive advantage by broadening your perspective as well as your business opportunities.
Smart Business spoke to Leslie Sabbath of Comerica Bank about why companies should make a commitment to diversity a priority in today’s economy.
How can a commitment to diversity increase my company’s bottom line?
As a key focus of an organization and a part of the corporate culture, diversity and inclusion practices can add to a company’s bottom-line in many ways, including:
- Employee recruitment, engagement and retention
- Enhanced solutions by bringing diverse and innovative ideas to the decision-making process
- Increased market share and customer satisfaction
We live in a highly diverse nation and world. It is important that companies recognize that to thrive, they must utilize and embrace diversity in their corporate culture.
By recruiting a work force of diverse talents, your employees mirror the communities you serve and you are better able to meet the needs of those communities.
Learning from the different points of view and perspectives of employees allows companies to fully understand the wide-ranging needs of customers.
Are there benefits to having a diverse supplier base, as well?
Yes, there are many benefits of supplier diversity, which should be incorporated into a company’s regular planning.
Generally, the term ‘supplier diversity’ refers to corporate business programs and initiatives designed to increase the utilization and support of businesses that fall within certain classifications deemed as underutilized or underrepresented. Working with minority- and women-owned businesses encourages the establishment and growth of these companies, which will lead to a stronger economy.
By supporting, mentoring and using diverse suppliers, you’re not only helping them succeed and your company prosper, you’re also bringing new ideas and resources to the table.
How can a company reach out to a diverse public in a meaningful way?
Try forming market segmentation initiative teams, such as Hispanic, African-American, Asian/Pacific Islander and South Asian which is what we have done quite successfully. Be sure to include groups of your company’s colleagues who are committed to joining one another with the primary purpose of reaching out to and building sustainable relationships in this diverse Dallas market.
It’s really crucial to a company’s survival to understand the needs of diverse markets and reach out to them in a meaningful way through sponsorship and involvement with diverse professional organizations, chambers and community organizations, support of community nonprofits and the development of relationships with centers of influence, community leaders and referral sources.
How can a company ingrain diversity into its business practices?
Companies can build diversity into their business practices by incorporating it into their value system and strategic plans. Ideally, diversity should be viewed as an important pillar of an organization’s foundation. Diversity scorecards can be used to help measure company progress in meeting diversity goals.
Companies also can require each employee to complete a diversity education course, for example, which can be Web-based, in-person or a combination of both. These courses focus on building an understanding of diversity and inclusion, and helping employees develop skills that are required in a multicultural environment. They encourage all employees to embrace and celebrate the differences among diverse employees and to create an atmosphere of inclusion. Senior-level executives and others also can be required to include diversity goals and objectives as part of their performance plans.
How can I tell if my company truly embraces diversity?
An obvious way is in the improvement in the hiring, retention and development of diverse colleagues. You also can tell if your company truly embraces diversity if it:
- Effectively utilizes and values similarities and differences in people to create a broad, richer work environment that encourages creative thinking and solutions
- Recognizes and leverages the benefits realized from a broad range of ideas, viewpoints and cultures working together to produce superior products and services for a diverse marketplace
- Embraces the inclusion of all talented and qualified individuals, regardless of differences in beliefs, experiences, backgrounds or physical characteristics
- Treats all colleagues, customers and vendors fairly and with dignity and respect
How will I know if my company is making a difference with its diversity program?
At Comerica, diversity is a core value and a key business driver. As a result, our bank has been nationally recognized for its diversity focus and commitment. Recognition is not the reason to have a diversity program in place, but it does serve to remind employees, customers and others with an interest in your company that diversity is a priority.
Leslie Sabbath is senior vice president for employee relations at Comerica Bank in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Inc. (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/FortWorth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.
Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands. Imagine an office where employees snack on fruits and nuts rather than candy bars, drink water instead of another can of soda, and have managed to kick that pack-a-day habit.
Imagine an office where health and wellness are a priority.
Is this anything like your office? Perhaps it will be during the months and years to come.
There is little doubt that health and wellness are hot topics. Just turn on the television and watch reality shows about weight loss, or pick up a magazine and read the articles on wellness published recently in Time and The New York Times Sunday Magazine. Or turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.
Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise, and our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.
“You really need to think about your overall strategy and culture,” says Michael Nadeau, president and chief executive officer, Viverae Inc. “If somebody is going to improve their personal health, they need to change their lifestyle. If a business is going to change their health, they need to change and improve their culture and incorporate health and wellness management.”
If you don’t have a program at your business, why should you bother to install one now? If you do have a program, why should you aim to improve it as we continue to move through 2010? Well, plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. And there is an impressive return on the investment, especially after a year or two.
But you have to plan and install the program first.Take the first step
Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are important and relevant questions. If the answer to any is yes, you’ll want to consider a wellness program.
The question you have to ask yourself, though, is why do you want to install a program?
There are no wrong answers, but if there is no why, the program will flounder.
“You need to determine what your budget is per person and whether you want to do executive wellness, as well,” says Dr. Steven Schnur, CEO, EliteHealth.MD LLC. “Then interview several companies and see what fits in that budget.”
And if you and your executives don’t support the program from its first breath, neither will your employees. So take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.
“Screening usually involves biometric testing, which is blood pressure and body fat analysis, screening blood work,” Schnur says. “This is what I call an M.D. review, which is where someone actually reviews the screened blood work and the biometric testing.”
HRAs, which are often free online or cost between $5 and $25 per employee if performed in person, and biometric screenings, which cost between $50 and $150 per employee, highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.Consider your employees
Because of the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your wellness program remains in compliance.
“Running these programs is difficult,” Nadeau says. “There’s a lot of work that goes into coordinating it and making it all happen. And it’s just as easy to coordinate a program for 1,000 employees as it is for 50 employees. That’s why the spend tends to be a little higher per employee for smaller companies.”
No matter your choice on that matter, your employees do need to feel a sense of inclusion in and perhaps even some sliver of ownership of the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible and allow them to participate.
The key to increased participation is to offer incentives, especially now as we continue to recover from the recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.
“You need to show someone you’re thinking about their health,” Nadeau says. “This is where you need to provide the right information at the right time and at the right frequency, because you need to have specific programs designed for a specific population.”Monitor your results
The fruits of an effective wellness program will take time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as the culture changes.
Over time, you can measure the collective pounds lost and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.
The program might also pay for itself during that first year thanks to employees being able to work more hours and to a possible decrease in health care costs but you’ll likely have to wait until at least the second year to see any real positive return.
“Usually, you have a 60 percent return on investment in the first two years,” Schnur says. “You probably reach around 100 percent in years three or four.”
When that change starts to filter in, you’ll likely see the average wellness program will be worth about $3 for every $1 you invest. Some experts say you can expect more than that $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.
“At the end of the day, our health care costs are trending up 7, 8, 15, perhaps even 20 percent per year for smaller companies,” Nadeau says. “The question I always pose is, ‘What are you doing about it?’ If your rent went up 10 percent per year, you’d move. And around 70 percent of all that money is lifestyle related; it’s preventable.
“When you put it back in those financial terms, doing nothing is not working. Health care rates will continue to go up if we do nothing.”
Millions of Americans have their identities stolen each year. That is why it is important to take extra steps to protect your personal information. As the nation recovers from the most severe economic crisis since the Great Depression, it is crucial to stay on top of your financial health.
In recent years, identity theft has risen to be one of the most popular crimes committed against the average consumer in the United States. The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year.
Smart Business spoke to Denise Owens of Comerica Bank about how to avoid becoming a victim of identity theft.
So, what exactly is this crime that is gaining so much traction?
Identity theft is a type of fraud in which a scammer or thief obtains your Social Security number or other sensitive personal information and uses it to open accounts or buy goods and services without your knowledge. Often, victims of identity theft don’t realize that their personal information has been stolen until they are contacted by a collection agency for a debt of which they are unaware, and, by then, there could be several debts in their name listed on their credit bureau report.
How do fraudsters obtain personal information about someone?
Thieves can use a variety of methods to obtain your personal information, ranging from rummaging through your trash to an online scam called phishing that seeks to steal credit card numbers, account information, Social Security numbers, passwords and other sensitive information. Phishing uses fake e-mails, fraudulent Internet addresses, imposter Web sites and ‘pop-ups’ to impersonate your financial institution and trick customers into disclosing their personal data.
What can people do to protect themselves?
Fortunately, there are several simple steps you can take to prevent identity theft:
Protect your Social Security number. Never carry your Social Security card with you. Memorize the number and store the actual card along with any other important documents in a secure place, such as a personal safe or safe deposit box. Additionally, never give your Social Security number out over the phone or to someone that you do not know. Banks will never ask for this information via phone or Internet, so don’t be fooled by a solicitor claiming to be from your financial institution. When in doubt, hang up and call your bank immediately to report such a query.
Reconcile your financial statements. When you receive your financial statements in the mail, be sure to reconcile them immediately and report any discrepancies to the company.
Check your mail daily. Each day, we are inundated with preapproved credit card applications, banking statements, credit card statements, etc., through the mail. All these highly sensitive documents are like gold to a would-be scammer. If you do not get a financial statement that you are expecting, contact the issuer to check that your address has not been changed without your knowledge. You should sign up for electronic statements when possible.
Shred all financial documents. You should shred all financial documents bank statements, tax returns, etc. that you don’t need. Don’t throw them in the trash. In addition, shred any documents that contain personal information, such as name, address, date of birth, when they are no longer needed. A household cross cut shredder can be an affordable and effective tool to protect your identity.
Be on guard when using the Internet. The FTC cautions that, while the Internet can give you access to information, entertainment, financial offers and countless other services, it can also leave you vulnerable to online scammers, identity thieves and more. For practical tips to help you be on guard against Internet fraud, secure your computer and protect your personal information, visit www.OnGuardOnline.gov.
Select intricate passwords. Another good point from the FTC: Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your Social Security number or your phone number, a series of consecutive numbers, or a single word that would appear in a dictionary. Combinations of letters, numbers and special characters make the strongest passwords.
Store information in secure locations. Keep your personal information in a secure place at home, especially if you have roommates, employ outside help, or are having work done in your house. Share your personal information only with those family members who have a legitimate need for it. Keep your purse or wallet in a safe place at work; do the same with copies of administrative forms that have your sensitive personal information.
What else should someone consider?
Be cautious about mystery inheritance letters and offers to earn money by working from home. Usually you are aware if money is coming your way. Many of these schemes promise a large monetary gain for little work or effort. Know what the deal is and with whom you are dealing if you agree to participate. As the old adage says, ‘If it sounds too good to be true, then it probably is.’
Denise Owens is vice president, Fraud Services for Comerica Bank in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Incorporated (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/Fort Worth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.
Maintaining a good credit score is one of the single most important things you can do to ensure your financial health. Especially during tough economic times, it can be easy to let your credit card spending get out of hand. Dangerous spending habits will cost you extra money in interest fees and can have long-term consequences that can ruin your chances of purchasing your next car or home.
If you have credit troubles, an important first step is working with a banking professional who can help you get back on track. Rule No. 1 is to never be afraid to ask for help.
Smart Business spoke to Jerrie Cage of Comerica Bank about how to evaluate your credit report and maintain a strong score.
Where should someone begin when evaluating his or her credit?
Examine your revolving lines of credit. For those who don’t know, a revolving line of credit encompasses all items bought without cash that can be paid back in a few months. Mortgages and cars have terms and requirements and are not considered to be revolving. Most credit cards, however, are and it is a good idea to keep these in check. Take an inventory of the various credit cards you may carry, including charge cards for department stores, and eliminate ones you can do without.
By reducing your access to multiple lines of credit, you can not only track and control your spending habits better but also manage your debt. You should really only need one or two primary charge cards, and having fewer will force you think twice before you swipe the plastic on your next purchase.
How can you stay on top of your credit status?
People should know their current credit score and track this score from month to month. For many people, their credit score ends up being quite a surprise because they never examined it in detail before.
It is possible to obtain free credit reports from sites like mycreditreport.com, but this is often only offered once a year.
Regardless, taking advantage of free credit report sites is a great practice and can also answer important questions. For example, if you notice your credit score getting worse from month to month, chances are you’re doing something wrong or you simply have too much debt.
Pay attention to credit report red flags. Always check carefully for unfamiliar items on your credit report. For example, if you see a major furniture purchase and know it’s not yours, chances are you may be the victim of fraud or identity theft. In addition, you should check any new accounts to make sure that you were responsible for setting them up.
How can someone eliminate debt altogether?
While it is crucial to have good credit, it is even better to simply be debt free. But to accomplish this, you must have a plan and stick to it.
Create a budget. If you are trying to climb out of mounting credit card debt, you first need to have a good understanding of where your money is going and why. Create a budget by tracking your income, knowing your fixed expenses (rent, mortgage, car payments and utility bills) and, most importantly, determining your luxury spending habits, such as shopping, dining out or other frivolous spending. Be sure to start paying off your outstanding debts, such as credit cards balances, before you treat yourself to luxury items.
Pay off one card at a time. The wisest way to get out of credit card debt is to start paying off your cards with the smallest debt first. Of course, you don’t want additional charges on the larger sums, so it is essential to meet the minimums. However, putting all your larger sums toward one card means that it will be eliminated faster, and you will therefore feel like you are working toward your goal. Eventually, the higher cards will decrease, too.
Don’t get further into debt. Sometimes, it is wise to borrow money, especially when purchasing a new home or car. Don’t buy what you really can’t afford, unless you want to run into further trouble. It may seem like a great idea to buy that new couch interest free for six months, but when paired with that new television and stereo, in six months’ time, you could be in financial trouble. When trying to reduce your debt, the rule of thumb is if you can’t pay a purchase off tomorrow, don’t buy it.
What else would you recommend to someone struggling with poor credit?
Repairing your credit takes time. The process of fixing years of bad financial habits does not happen overnight. It takes discipline, hard work and patience. But if you’re taking the right steps, like budgeting, paying off debts and curbing your frivolous spending, you’ll slowly start to see your credit scores climb. And this should evoke a sense of accomplishment as you work toward getting your financial health back.
Jerrie Cage manages Comerica Bank’s Forest-Inwood banking center in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Incorporated (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/Fort Worth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.
Lynn Lewis-Bjostad is a certified meeting professional with more than 20 years of experience in the industry. She has owned and operated Premier Meeting & Event Management for almost a decade and is a member of the DFW Independent Meeting Planners. She has previously served on the board of directors for Meeting Planners International DFW.
Q. How can a business save money when it comes to working with an event management firm?
Creativity. Just being creative with the budget helps, and finding different ways to do things and different locations to hold them. Designing the program differently and providing cost-saving options also helps. We did a government program last year where they wanted to lower the cost, so we provided a list of cost-saving options not necessarily things they wanted to do, but things they could do anything from going green for the program, putting things on screen or a flash drive instead of paper, and not serving bottled water. All those things looked good, but they also saved money.
Q. What are some of the newer services and products an event management firm can provide for a small or medium business?
Online registration is getting hotter and hotter as far as attendees wanting to do complete online registration. It has become so much easier now to create a Web site and you can feature programs with direct link to registration. Again, we’re cutting down on printing costs. It’s been around for a while, but it’s obviously getting hotter. It gives us a better snapshot of our attendees, what they’re doing, what they’re looking at, and we have a much better database to control.
Q. Other than quality events and the ability to remain on budget, what important values and assets can an event management firm provide for a business?
We help create brand marketing for their events. Contractual obligations are huge, just knowing what they’re contracting and what they’re getting themselves into. We also add value because of our buying power. (One client saved 30 percent on their rates for their hotels, though that figure varies.)
Clint McDonnough doesn’t recall ever having an internship himself. In fact, when he joined Ernst & Young LLP then Ernst & Ernst you simply got your four-year degree and started working right after graduation.
But the Dallas office managing partner acknowledges that things are a little different these days at the accounting and financial services firm. Now, students must go through a five-year program, and internships are nearly required to get in with the firm. While things have changed, it’s definitely for the better.
“The process is much different than when I got hired, …” McDonnough says. “Nowadays, probably about 95 percent of the people we hire have had an internship with us and have had the opportunity to see us up close and personal on a day-to-day basis.”
And that means that he and his 1,400 people have also had the chance to see them, so when they go to hire full-time employees, they have a better picture of a candidate than just what’s on a piece of pretty resume paper.
“It’s one of the best things that we’ve come up with,” McDonnough says. “It takes the guesswork out of hiring so when you make a full-time offer, you’ve had experience with the campus activities, the interview process, the in-office interview you’ve had them for eight weeks of full-time employment basically. You’ve had an extended period of time to get to know and work with them, so it really takes the guesswork out of the recruiting process for us, and it takes the guesswork out of that student’s mind of whether this is a good place for (him or her) to work.”
Creating a strong internship program entails getting on campus to build relationships with professors and students, and then offering students a meaningful work experience.Get on campus
If you want to have the best interns, then you have to have solid relationships with local colleges and universities, and to do that, you have to invest both people and time.
“It starts with making certain that you have our folks who spend time on campus getting to know the students as well as making sure that the students have the opportunity to get to know us and what we stand for,” McDonnough says.
When he’s sending people out to campuses, it’s not just simply something he asks an employee to add into the schedule. Instead, because it’s an important role, assign it as a full-time position. In most cases, a partner serves in the role of campus coordinator along with a team of client-serving professionals, and that team is augmented by full-time professional recruiters on staff. All of these team members and recruiters have had experience working with clients throughout their careers at the firm, so they know what it takes to be successful in E&Y’s culture.
Typically, it’s one partner per campus, although if schools are small, a campus leader may have two schools that he or she oversees, and the company often tries to match alumni up with their respective alma maters, so they already have an idea of the school.
“We like to have long-term consistency in our key campus leaders,” he says. “We’d have someone who has spent many years on that campus so they know the campus, and more importantly, they know the professors, so they’d have the rapport with those professors to know what type of person a specific student would be, and then have a dialogue and discussion around, ‘Do you think that person would be successful in the type of culture that we have?’”
Campus leaders should be focused on building relationships with faculty and staff.
“Spending time with them on campus is key,” he says. “Making certain that they have access to our thought leadership that we provide, that they can use in their classrooms or their lectures is also a critical part.”
Acknowledge the importance of the role those professors play.
“I think it’s just being respectful of the role that they play, and it’s a critical role in the development of the key people who will be a key part of our future, …” he says. “When you go on campus, make certain you understand and are being respectful of the role that those professors are playing in the development of those students that will be your future is something that we need to do and still need to do when we reach out to them. Sometimes there’s a view that we take them for granted, and we never, never want to do that.”
Your recruiters also need to know the students. E&Y’s staff first does this through having social hours on campus two to four times during an academic year.
“One thing that we don’t do is we don’t have alcohol on any of our recruiting visits,” McDonnough says. “That’s not part of the social time. We believe that the social time is really business time, where we get to have meaningful interaction with the students, be able to properly evaluate that student’s social skills and interpersonal skills and use that as another piece of information that we utilize in evaluating that student along with their abilities that they’ve demonstrated in their classroom.”
During these socials, recruiters are looking for students who have qualities that could make them successful at the firm.
“It’s the ability to carry on a conversation, eye contact, feeling comfortable in a discussion and willing to participate in a discussion,” McDonnough says. “Those kinds of things that we can identify that are consistent with somebody who could be comfortable in dealing with people. We are a technical business, but no doubt about it, that technical business is done by people, so it’s important that you have the ability to interact with folks both in our company at Ernst & Young and our clients.”
Look at their intelligence and awareness to find the right fit.
“You also get a sense for just the whole general business knowledge,” he says. “Are they able to demonstrate that they have a good knack for what’s happening in the business community, what’s happening in the economy? That kind of discussion is part of a dialogue that our people have with the students during those activities.”
The next step after the socials is on-campus interviews with the standout students, conducted by the recruiting team.
“That interview, in a lot of cases, is a validation of what we had known,” he says. “In a lot of cases, because we know the students so well, it’s us making sure we know what they want to accomplish in both their internship and where they want to go on a full-time basis. That includes, what city are you looking at? What kind of service line are you interested in doing? What kind of industry are you interested in, if you want to focus on an industry? That’s the kind of dialogue that’s happening in the interview process.”
This provides them with another opportunity to see how that student will handle him or herself, only this time in a one-on-one situation.
After campus interviews, the individual campus teams meet, and they’ll come back and meet with the other schools’ teams to compare notes between campuses.
“Then, depending on our hiring needs from an office perspective, we then go back and decide who to make offers to to come into the office,” McDonno ugh says. “By and large, if you get an offer to come into the office, again, given the amount of history we have had with these students, we will offer an internship after their office visit.”
The number of interns varies based on the work needed, but this year, 90 bright-eyed interns started. Going through this entire process helps reduce the possibility of surprises when they actually get working.
“Because of the amount of due diligence that our campus coordinators do, both in the pre-interview process, talking with professors, getting to know these students on campus, we have a really good idea,” he says. “You combine that with how well they’re doing in their studies, we have a really good idea of who we would like to bring in before we even go into the interview process, so we do a lot of homework.”Provide a meaningful experience
A lot of people think of fetching coffee and spending hours standing at the copier when the word internship comes up, but McDonnough cautions that you can’t have this if you want to have a successful internship program.
“What you wouldn’t want to have happen is somebody to come full time and be surprised by the culture, the workload, the work requirements the work,” he says. “You just want to avoid that, so it’s really important that they get a real experience during their internships, and that includes work demands, deadline demands, etc., that would be a normal course when they start with us. It would not be a good use of their time to make coffee and copies. That would be a wasted experience for an intern.”
So if you don’t want to waste your interns’ experience, how do you set up a meaningful one?
“A key of a successful internship program is making sure that they have opportunities to work on clients,” McDonnough says.
To do that, E&Y elects to have its internship program not during its slower summer months when most college students intern but during the first couple of months of the year or the busy season.
Now doing this also goes back to having successful relationships with the college campuses who will work with both students and the firm to make this happen.
“It’s really because of the accommodations with the schools here in Texas,” McDonnough says. “It’s critical that you get the schools that you’re recruiting at to agree to that kind of time frame for the internships.”
If you don’t have interns when you’re busiest, then you run the risk of them not having enough work to do and not learning.
“Yes, it’s a great opportunity to know the firm and to know you, and you get some sense of what it means to go to work every day and what kind of firm you’re going to be working for, but it’s not as true of an experience of what the work life will be like the rest of the year,” he says.
Once interns start, they go through orientation for approximately three days, which is led by either a staff volunteer or someone from the recruiting team. That orientation is followed by more technical training, and just a couple of weeks into an eight-week internship, they’re ready to start in the field.
“Try to get them different experiences with different people,” McDonnough says. “We like for them to work on a couple different engagements in a couple different industry groups. When they move within the engagements, we try to get them to work with different people. It’s important because it gives us a couple different touch points on how they’re doing not just one touch point and secondly, it gives them an opportunity to experience different leadership styles.
“The leadership style we develop is based on the experiences that we all had in working for other people. This is just an opportunity for them to see some different leadership styles and personalities and grow in their personal development.”
Each engagement could involve as few as three people or as many as 15 or 20 people, so the interns have the opportunity to work with many people.
In addition to the engagements, each intern is paired up with a counselor or buddy during his or her time at the firm.
“That’s important so they have another reach-out point of someone that they know and have a chance to dialogue with,” he says.
Lastly, they also have a contact in HR, who is involved in running the overall program. This gives them at least three points of contact internally during their experience, but it also gives you the chance to have several points of evaluation.
“For every engagement they work on, they’ll get feedback from the person that’s above them on their performance and what they can do well and what they can do better,” he says.
Most of the people who intern at E&Y are juniors and will receive a full-time job offer at the end of their eight weeks, contingent on them maintaining their grades through the last two years of their five-year program.
“We’ll do an evaluation before they leave based on the feedback they had on their engagements, but because of the amount of work that we do before we bring somebody in in making sure we believe they’re a good fit, we’re seldom surprised if someone doesn’t live up to the performance standards of the firm.”
This process allows the student to focus on school, knowing he or she has a job upon graduation, and it takes the guesswork out of E&Y’s hiring. It’s also made E&Y a standout employer.
“One of the things that is a good indication of how well we’ve done in the recruiting process … is that we have been now ranked in the top three in Business Week’s list of best U.S. employers for new college graduates,” McDonnough says. “The list came out in September 2009, so it made us feel good, and it validated all the hard work that I have just talked about, about the importance of spending time on campus and finding those opportunities.”
How to reach: Ernst & Young LLP, (214) 969-8000, (214) 979-1700, (817) 335-1900 or www.ey.com
Week after uncomfortable week, Donald Trump leaned across the edge of his famous boardroom table, his hands locked together, his lips curled in a sneer, and stared some poor sucker right out the door. During eight seasons of his reality television show, “The Apprentice,” Trump has mastered the ability to pound out the two words that no employee, not even a contestant eager for fame and fortune, wants to hear.
As has been the case so many times during the last couple of decades, Trump proved to be far ahead of the curve. He mastered the fine art of the fire long prior to the start of our current recession, long prior to millions of workers hearing the same words, more or less, as that unfortunate contestant on the other side of the table. But perhaps Trump and you will not need to utter those words as often this year as you did last year.
The national unemployment rate dropped to 10 percent in November 2009 from 10.2 percent in October, according to the Bureau of Labor Statistics. That figure, however slight, represents enough of a drop to provide some glimmer of hope to human resources and human capital experts across the nation and some hope that the start of a long recovery will soon be under way.
“This is providing an opportunity to step back, re-evaluate and reset the human capital agenda,” says Jan Rose, market business leader for human capital, Mercer LLC. “Everything is up for examination. Many of our clients are reviewing the effectiveness of all their human resources programs and assessing whether the programs are having the effect they want it to have for their investment.”
All of which means that, after a long and frustrating year filled with layoffs, wage freezes, the elimination of bonuses and perks, and the addition of more assignments for employees already under stress, the economy and the human resources industry might start to take a turn for the better at some point this year. Challenges do remain, of course, but there is hope.
Whenever the figures and charts tick upward, the time to move will be as soon as possible. Will you be prepared?Focus on your top employees
The challenges throughout the last year focused on how to maintain the revenue, trim the budget and retain as many employees as possible. Almost every business of every size lost something and, more important, somebody as evidenced by that aforementioned unemployment rate, which has increased during almost every month since April 2008.
You might still need to trim your budget, but you will also need to focus on identifying and retaining your high-performance and high-potential employees. So often, those employees might think the grass is greener on the other side of the proverbial fence. But what about when the grass is brown? What about when there is no grass? Heck, forget the grass, what about when there is no fence? They remain where they are for as long as necessary, as they are doing now because there are so few available positions in the marketplace.
Then they leave.
That is, at least, the consensus among dozens of human resources and human capital experts.
“Everybody recognizes that you need to be careful about expenses in this kind of economy,” says Bruce Barge, market leader and principal, Buck Consultants LLC. “But don’t cut your spending on innovation, don’t cut your spending on the kinds of training that allow people to develop the sort of skills that grow the company, don’t hire people who are just average because that’s about all you think you can afford. People pay attention to that and to the message from leadership.”
The process of retaining those high-performance and high-potential employees has already started, with your top workers likely influenced by how you handled the fallout from the shock of the recession. If you handled layoffs with dignity, communicating why decisions were made and what they meant for the future, that helped so did any revenue investment in those top workers, from compensation and bonuses to training programs and seminars. And if you talked with those top workers and relayed to them where they fit in the vision for your business, that would have been about the best thing you could have done.
“One thing we’re beginning to understand that is really important, perhaps the most important thing, is to have employees feel connected to their sense of purpose in the organization,” Barge says. “There’s more and more research showing that’s the most important motivator. Not that compensation and other more traditional motivators aren’t important, but what really matters, especially for your highest-performing employees, is that sense of purpose. They want to feel like what they do makes a difference.”Develop and share your plan
In addition to identifying and targeting your high-performance and high-potential employees to prepare for a future of healthy economics, you should develop a plan to address possible human resources challenges and plot the path you want your business to follow during the next couple of years.
Chief among your objectives for that plan should be the development of a balance between continued cost reduction and simultaneously positioning for growth. During the last year, many companies have aimed to manage and contain all costs related to human resources and human capital because they have been trying to do little more than survive. Survival is important, but it is also important to not damage the viability of your business in the big picture, well beyond these few years and even beyond this new decade.
Once you develop your plan, share it with your employees, especially your key employees. That advice might sound obvious, but experts say that too many business owners fail to relay information to their managers and their employees. And even in a good environment, employees who only hear about meetings behind closed doors and have no idea what is happening and what is about to happen will often speculate incorrectly, either causing additional stress or inadvertently spreading incorrect information. In short, you can still have those meetings behind closed doors, just be sure to share what is said on the other side of the oak.
“Communication is big, particularly from the senior executives,” says Josh Sorkin, senior vice president of enterprise services, Hudson. “It’s about what they’re doing to invest in not only the people but in the business overall, in making the employee base feel the company is investing in the longer term.”
Communication is a key to developing a successful human resources department, either internally or by bringing in an outside firm. You want your employees aware of what is happening in your business, and you want them to be engaged.
“With all of the changes going on in the economy and all of the uncertainty, it’s important to remain engaged with your employee base, to have them stay focused on the business at hand and not be distracted by news in the marketplace or internal chatter within their own companies,” Sorkin says. “It’s important for them to be focused on the tasks at hand and make sure you keep your business profitable and looking forward.”
Danny Wade says it’s one of the hardest things a leader can do. But it’s also one of the most necessary: Sometimes, you have to show that you’re human.
You might think it decreases your employees’ confidence in your leadership abilities when you step up and tell them that you don’t know something or that you were wrong about an idea or initiative. But the president and chief operating officer of Goodman Networks Inc. — a network solutions company that generated $221 million in 2008 revenue — says it can actually do the opposite. Admitting that you don’t have all of the answers shows your team that you’re willing to admit fault, seek input and continually improve yourself as an executive.
“One of the things is that organizations need to see their leaders willing to accept and acknowledge when a decision they’ve made may have gone in the wrong direction,” Wade says. “It makes you more human and relatable.”
Smart Business spoke with Wade about how you can use self-evaluation, feedback and criticism to better your leadership skills.
Learn from failure. Self-evaluation is one of my strengths on a personal level. I am the youngest of 10 boys, so I had nine older brothers, which tends to put you in a more humble position. And I have just been the type of person who steps back and truly looks at myself and what I’ve done and decisions I’ve made.
I’ve told the organization numerous times that I learn more by my failures than my successes. By analyzing our failures and determining where we went wrong is how we truly improve in our personal lives or our professional lives. So I do a great deal of introspective thinking and putting myself in other people’s shoes, seeing how they perceive things. Those two traits and characteristics make for a better environment in an organization. It shows employees that this is leadership that is truly going to work with them to evolve and get better versus being set in your ways and driving things down the way they always have, not making adjustments along the way.
It’s a balance, because on one hand you want to use the methods and the tools in the past that have made you successful. But the problem is that you can’t bring everything you’ve done in the past into different environments. As you come into a different environment, you have to know how to be able to adjust, how to tweak yourself so you can drive the organization to achieve optimal execution. The success is in how the organization performs, not how we as leaders perform.
Encourage feedback. I tell everyone in my organization to come talk to me about anything you want. Just do it in a professional, nonattacking, nonthreatening manner. If you do that, I’ll listen to anything you have to say.
You can be argumentative with me as long as it’s done tactfully and professionally. You can tell me that you think I’m not moving in the right direction, express why you think it’s wrong. We’ll have a conversation about it, and if you have an influential message and can sway me to some degree, I’ll accept that. If not, we’ll maybe agree to disagree or I’ll sway you.
You have to allow people the opportunity to have their say. If you give people the opportunity to get stuff out in the open, it cuts down on rumors and it cuts down on back-door conversation. It ultimately cuts down on people getting distracted. If the things on your employees’ minds don’t involve how they can be successful and how to better serve the customer, if they’re focusing on how they felt they were treated incorrectly, you’re not getting the best performance out of them. So you have to be willing to let people share things and you have to be willing to listen to some criticism. Sometimes you learn something from the criticism.
Stay close to the ground. Some-times leaders get too far away from where the rubber meets the road in the business, sometimes feedback has to go through so many layers that it can’t reach you. So it’s critical to get that firsthand feedback from your people that are down the ladder, doing the tactical jobs. You really can learn a lot from them.
Keeping feedback channels open has been a big challenge. There is no one model that I have been able to uncover that says, ‘This is what you do.’ It’s a matter of making sure you keep yourself tied to what is going on in the organization. You have to have very consistent and formal communication with regard to what is happening inside your business and in your distributed markets.
We try to spend a lot of time and focus on how we get that information up to the executive level, so that as executives, we really understand what is happening.
Be willing to adjust. You make adjustments by constantly looking at how things are performing and executing in the business. If you see something not making progress or trending in the right direction, you’re evaluating what the root cause is. If it’s something we can control or something we initiated, we go back and adjust.
Maybe you picked the wrong person for a role, someone who is not following through, you have coached them and worked with them, and you just need to accept that they are the wrong person in the wrong role. If there are tools and systems that got implemented incorrectly, you need the commitment of resources to correct those. The tweaking is that you’re constantly looking at whether you have the right people in the right roles — are they executing and trending correctly? Do you have the right environment for them to be successful? If not, you make the appropriate changes.
How to reach: Goodman Networks Inc., (972) 406-9692 or www.goodmannetworks.com
Ugo Ginatta is in the gelato and coffee business. But he’s also in the idea business.
The co-founder, chairman and CEO of Paciugo Franchising LP knows that the best possible products won’t reach his customers if the best possible ideas aren’t placed on the table and considered in the company’s management meetings.
With that in mind, Ginatta has focused on becoming a kind of peer leader who oversees operations for the gelato store franchisor — which generated $10.4 million in 2008 revenue — while still giving both corporate employees and franchisees varying degrees of latitude to come up with better ways of marketing and selling their products.
“I like to be informal as a leader and like to be peer to peer when possible,” Ginatta says. “I have a completely open door because I am here for long hours. I’m normally the first one in the door and almost the last to leave in the evening.”
Smart Business spoke with Ginatta about how you can create a collaborative, idea-driven culture in your business.
Build a wide-angle view. If you want to lead your company effectively, always remind and completely demonstrate to your colleagues that what you are arguing for is not your point of view, not your pet project, but what you believe is good for the company. When we argue, we all tell each other that this is not arguing for the sake of arguing. It is because we believe in what is best for the growth of the company. Everybody has a stake when you have a small company like we do. Everybody is rooting for the company to grow and not only give us financial satisfaction but professional satisfaction, as well.
You need to continue to create that wide-angle view among your employees. In our meetings, we all sit there and talk. We know each other, and our comments are driven by keeping focused on what is good for the project or the company. We really try not to have groups or subgroups or let somebody insist on something without hearing everyone else out. Everybody needs to have the mindset that they’re going to do their best to understand our customers and our franchisees and come up with recommendations that is best for them and best for our products.
Involve people from the start. Understand that everybody wants to contribute. We keep saying to each other that we’re all ready to unplug the restroom toilet or sell the company or do anything in between. In other words, we all wear multiple hats according to our capabilities. You need to find people and train people who have a phenomenal ability to jump from task to task. If we have a potential franchisee to see how we make our gelato, anybody here can take them on the tour, whether it’s someone in accounting, shipping or wherever. The more you can build that all-around knowledge with all your people in all areas of the company, the better off you’ll be.
People we hire are sent to the first available franchisee training session. Early employees, they all came from stores. They started as store employees, then store managers and then they moved into corporate. So they develop an extremely clear idea of where the income comes from. The employees who came along later on did not go through the stores. Those are the ones who need to go through a training course to understand where our income comes from.
When you have developed a sufficient number of employees that are so well attuned to the corporate objective, they tend to pull in friends and acquaintances that have the same characteristics. If you end up mishiring someone into that kind of environment, they probably won’t last that long because they have a different philosophy. They don’t care about the product or the company, so they’re not happy and they need to look for a different job. You need to be kind of homogeneous in your hiring, like in a rowboat, everybody is rowing at the same tempo.
Know when to take a backseat. You tend to listen more closely to colleagues that have specific knowledge or experience on the given topic being discussed. I tend to keep myself very much restrained in the marketing meetings. We recently had a marketing meeting about how to relate things to customers when they walk into our stores for the first time — why is it a healthier option than ice cream, why we make it by hand and so forth. Those points need to be crafted very creatively and in as few words as possible because people don’t want to read pages and pages.
During meetings like that, I tend to keep myself more in the role of a member of the general public. I want to let the people who have the expertise run the meeting, even though I do have some background in marketing. It goes back to the idea that you want the most specialized and trained people on your team to run the show in each given situation. You don’t want to step over or around people just because you run the company.
In all situations, you have to take a look at ideas from everyone very seriously and let the people on your leadership team debate it. The proponents of the idea try to lay down the case as to why we should try something, and the idea’s opponents lay down the case as to why this might not be the best fit right now. But in the end, you want everybody in those meetings to leave with the idea that their idea was seriously considered, that no one was slighted, that both sides had a chance to give their story and the idea was thoroughly debated.
In our case, we don’t deal with a lot of weird ideas to begin with, but we do get some different types of ideas. Someone might come to management with an idea on how to enhance the grand opening of a store, drum up some publicity, and it might be something strange or a little off the wall, and we would certainly look at that because it’s a unique marketing chance for a new store that is looking to attract attention.
How to reach: Paciugo Franchising LP, (214) 654-9501 or www.paciugo.com