Monday, February 27, 2012

Job Seekers and Employers Losing the Battle - Square-Pegged Workers in a Round-Holed Workplace

Job seekers, I've got news for you: your skills are outdated, your experience doesn't apply and you don't fit the company culture...welcome to the current state-of-affairs in job search.

Don't worry Employers, I've got news for you too: your standards are too high, the time and expense you spend in recruiting is too great and you are looking for talent that doesn't exist...welcome to the current state-of-affairs in talent acquisition.

Don't believe me? Look at this information from a BusinessWeek article. FACT: We've got 13M+ people out of work and 3M+ open jobs - and climbing. Why? Because our talent doesn't match the job openings:

"...it's evidence of an emerging structural shift in the U.S. economy that has created serious mismatches between workers and employers. People thrown out of shrinking sectors such as construction, finance, and retail lack the skills and training for openings in growing fields including education, accounting, health care, and government."

But wait, there's more:

"As bad as it is now, the mismatch will create bigger problems when the economy begins to expand again. First, the unemployment rate is likely to remain distressingly high because many people who want jobs will lack the appropriate qualifications. Second inflation could pick up sooner than expected if employers are forced into bidding wars to recruit the few people who are qualified for the work..."

The article goes on to explain a new index to measure the challenges in the labor market. Referred to as the 'Jobs Misery Index' (I'm not kidding!), it is the sum of the unemployment rate and the jobs openings rate. Why should you care? Well, historically, this number has hung at 8%. But last spring, it started a steep ascent and is now over 10% and some suggest it could stay there, even when the economy starts to recover. One potential reason for it to stay high is the fact that many Americans won't take jobs they feel are beneath them. Another is the inability (or desire) for talent to relocate i.e. job seekers with homes they can't (or won't) sell keep them stuck in a certain place. Yet, while the pride of workers and the immobility of talent hurts job placement rates for sure, the overwhelming factor remains that we've got a large pool of square-pegged job seekers who can't fit into a round-holed workplace. Here's an example:

Graduation season is approaching and soon millions of diploma-holding job seekers will start looking for work. Yet, without any practical work experience (a 2007 survey indicates that less than 30% of high school and college students work while in school, and those that do are rarely employed in professional settings), these job seekers will find it tough to get hired into corporate America. The 'Catch 222 of needing experience to get experience will leave many of these new grads in a professional stall pattern. And, when the economy rebounds, if companies aren't willing to train them, the road to a satisfying career could be a long one.

Where does this leave us?

Well, I agree with the article's reality check. Two things will need to occur:

1) Job seekers are going to need to take lesser-paying jobs as part of a 'course correction' for their career paths that will eventually lead to better pay and longer-term employability.

2) Companies are going to need to expand and improve their on-the-job training and succession planning so they can hire talent which are a 50% fit and develop them instead holding out for the 90% fit that will never knock on their door.

Now, I know what you are thinking. Job seekers and employers reading this are both saying, "Why me?" The answer: Because to get what you really want, you've got to put some skin in the game. It's not sacrifice, it's investment in a better future. As the article closing argument states:

"A mismatch of work and workers is never a good thing. But smart policy - combined with realism on the part of the employers and job seekers - can minimize the disruption."

Change is the Theme in a Roiling Cellular Industry

Now comes the hard part. Or, at least, the unwieldy, contentious, cumbersome and frustrating part.

In November, Verizon Wireless said that it will open its network to devices other than those it directly subsidizes. The story is well told at BusinessWeek: The company is facing a dwindling number of potential new subscribers and is being pushed by companies itching to create alternate paths to deliver their content to subscribers. This led it - and other carriers - to adopt the more open model that is popular in Europe and Asia.

The pronouncement became only somewhat less vague this week as Verizon Wireless held a meeting in New York City to outline its plans to vendors. The piece says another meeting will be held with developers and details are scarce with, for instance, no details on pricing or developer specs.

A recent post at the Industry Standard, which reports on the same conclave, reports that Verizon Wireless sounded defensive about the specs and the certification process. The writer goes through the recent history which, if nothing else, is entertaining: The unveiling of the iPhone last year was followed by rumors of a "Google phone," which turned out to be the more ambitious Android platform. This, in turn, was followed by open network announcements by Verizon Wireless and other carriers and a run of price reductions. The auction got under way in January. Throw in the LiMo open source platform - which the writer doesn't mention - and you have ample reason to follow his caution to be careful as the industry evolves rapidly and companies perhaps over promise.

This wider landscape clearly is encouraging new entrants. It's not a shock, for instance, to see Dell getting ready to take the smartphone plunge. It has been in the mobile game before - with the Axim PDA - and makes "cellularized" laptops. The company also needs to keep pace with rivals such as Apple, Hewlett-Packard and Toshiba, according to Network World. The piece reports on a Digitimes story that says Dell is working on a Windows Mobile device. Surprise or not, it is an indication of the creativity and marketing prowess that will join an already sophisticated sector. Clearly, the cellular industry is the big leagues.

The change in Verizon's access policies, as BusinessWeek points out, is deeply linked to the 700 MHz auction. That auction is over, though the winners have not yet been revealed. News.com reports that the various blocks of spectrum will be treated differently. The fate of the D block - which includes spectrum to be set aside for nationwide emergency services - is up in the air (no pun intended) because it didn't garner enough interest. Bidding was more robust for the other blocks (C, A, B and E) and the reserve prices were met. AT&T was mentioned as a particularly active participant.

This Capitol Valley post does a couple of things. It gives a good explanation of open access in plain English. More importantly - the concept of open access isn't terribly complex, so the explanation is nice but not vital - is the point that open access won't be too big a deal in the U.S. because carrier largesse in terms of phone subsidies is large enough to make all but the most ardent simply take the phone and the much lower monthly charge. That certainly is the case today. We must see, however, whether market forces and competition close the differential enough to make open access a bigger issue down the road.

It's a great time to be in - or reporting on - the cellular industry. The sector is evolving rapidly on several overlapping fronts. As is common in highly competitive industries, the winners will be the end users.

Sophisticated Hackers Get Personal

Humans, as a species, have a very trusting nature. We know that danger lurks in shadowy corners and occasionally marches out in broad sunshine. We just don't think that it's in every corner and we're confident that measures are in place that will protect us from the worst of the worst. Even when presented with a mountain of evidence that proves a particular course of action is unwise, we tend to think that we'll be alright. How else do you explain the alarming number of people who persist in advertising their personal details at every online opportunity presented to them?

The Internet is an indisputably convenient tool that enables us to significantly simplify our lives. We can bank online; do all of our grocery shopping, chat with friends, meet new people, play social games, and even date. There is very little need for us to leave the safety of our homes. All we need to do is trust the safety of all the applications we use.

But, no matter how secure sites claim to be there is always the danger of information being lost, stolen or misappropriated in some way. Hacking is no different from any other field of occupation in that it constantly develops and evolves. Increasingly sophisticated techniques allow hackers to fly in and out of sites undetected, wrecking havoc as they go.

Social networking sites, such as Facebook and MySpace, are like gold mines to the socially ill-adjusted. People don't give a thought to including all manner of personal details on these sites. Why wouldn't they? They're among friends, and the sites are assuredly secure.

This would be good news, except that an increasing number of pages are being hi-jacked and used for malicious purposes. In November last year, News Corp's pages on MySpace were hi-jacked so that when anyone clicked on them they were redirected to a site in China. The site aimed to lure users into downloading malicious software that would take control of their PCs.

Hackers copy friend-lists from social networks and send mass emails under friendly disguises. We all know not to open attachments or emails from people we don't know, but why would we suspect our friends of malicious intent? We click open and descend into cyber-hell.

A new strategy used by hacking masterminds involves placing help-wanted ads in underground channels and hiring professional writers to pen enticing emails and ads, completely devoid of suspicious content. The innocuous nature and well-written content lulls users into a false sense of security. We forget all we've learnt about saying no to strangers and walk blindly into the dragon's lair.

Hackers are also extending their scope of interest, turning their attention to "smartphones". Phones like Apple's iPhone can run entire operating systems, support email applications and are capable of storing every aspect of your life. Many people are helpless without their smartphones because they keep all their information on them. They're a hacker's paradise. It's never been easier for them to steal your identity or hack into your bank account.

Cyber criminals use viruses and worms to disrupt and weaken corporate databases so that they can go in and steal ideas, designs and blueprints for prototypes. Intellectual property fetches magnificent prices on the cyber blackmarket.

We all need to get our heads out of the sand and face up to the fact that with incredible convenience comes incredible danger. For our financial, psychological and physical safety, we need to wise up and rethink what information we're willing to make public. We also need to consider the adage that warns against putting all of our eggs in one basket. We can't have become so dependent on technology that we can't make a trip to the supermarket when we run out of toilet paper rather than click "add to basket".

Why Do You Want To Blog?

Try searching in Google for the key words 'blogging for beginners' today and it will show you at least 2,650,000 links relating to this subject. Put in the key words 'why blog' and it will show you more than 315,000,000 hits. It's not exactly a bad thing, but sometimes it paralyzes the searcher with the sheer number of posts and ideas about blogging. These links will tell you how easy it is to have your own blog; how getting your blog address is easy as pie, how you can just pick it up from any one of those blogging sites, scribble a few words, click publish and your blog will be up and running in minutes. Some of these links will even show you how you can make money off your blog and then cite a few bloggers who have made it big.

However, before you get carried away and start having delusions of internet grandeur, pause for a moment and try to answer this question; Why do you want to blog? (What is your goal? What is your motivation?)

This is a question that is just begging to be answered. Sure, you can blog for blogging's sake if you're just another bored person who doesn't have any better thing to do, who's heard about blogging, who woke up on the wrong side of the bed one morning, and then declared to himself that it's a good day to create a blog. If this kind of impetuousness works for you, then go ahead, be my guest, and more power to you.

But if you are a person who values your time, who wants to have your own piece of lasting internet real estate, this question can spell the difference between having a fulfilling (and hopefully lucrative) online existence, and wasting a lot of time. If you don't have a clear answer to this question and you just blog for kicks(and as I said, you are certainly free to do so), then your blog is eventually destined to join the unnamed tombs of blogs that have fallen into the clutches of the internet's blog cemeteries. And there, laid to waste for all eternity, goes those innumerable hours spent blogging in front of your computer.

Consider this: In April 2007, Technorati's CEO, David Silfry reported that his company as of March 2007 has tracked 70 million blogs(note1) floating around the internet. When quizzed further by Businessweek about this number, it turned out that only 21% of all tracked weblogs are active(note2). Knowing yourself and having a clear idea of what you want has always been the foundation of all successful and lasting endeavors. In the same way, having a good understanding of why you want to blog ensures that you increase your chances of staying on the active side of Technorati's statistic.

Live Reported From the Stock Exchange: GOOG (+23%) - YHOO (-30%)

The game continues ...

Google

At the moment (25th of October) Google’s stock is valued 486.6 and Yahoo 24.5 dollar. In December (2005) the Google / Yahoo share price ratio was about 10, now the ratio increased to 20.
Google’s growth is leveraged by two factors: autonomous growth and growth through takeovers. For the autonomous part, Google needs a continuous increase in human resources. The amount of lawyers alone has risen from one to hundred already.

...”We will redouble our efforts to identify and hire the most qualified candidates ... we are committed to make Google a natural home for a diverse group of the most talented people in our industry and we will continue to work towards that goal.” (Google's Annual report 2004 investor.google.com/pdf/2004_AnnualReport.pdf - the file is fully protected to copy text)

This strategy is only possible for the autonomous part. For the takeover part, the human resources come as a package deal; then the human resources are part of the firm they takeover. In this case previous competitors are to cooperate in the new organization. Like in the case of the recent acquisition of YouTube.

... YouTube received funding from Sequoia Capital in November 2005 and the service was officially launched in December 2005. Chad Hurley and Steve Chen (two of the three original founders) proceeded to become the first members of the YouTube management team and currently serve as Chief Executive Officer and Chief Technology Officer respectively. (www.youtube.com/about)
When more companies are taken over, integration will become the enabling factor for future growth. Internal competition is a continuous threat. (This is not different for countries that absorb immigrants to facilitate growth)

In the meanwhile we read: “YouTube will stay independent, really! - The video site will keep its identity after its $1.65 billion sale to Google is complete, its CEO insists, but 'a lot [needs] to be figured out.' “ ([http://money.cnn.com/2006/10/13/news/companies/] pluggedin_google.youtube.fortune/index.htm)
And:

“How Google's Garden Grows. Its stock rally is being fueled by increasing optimism that Google will finally succeed in branching beyond search-related ads ... also successfully expand into other, more lucrative markets such as e-commerce ...“

When to Pray for Inflation, Currency Devaluation and Global Fear

Why would the Fed (the Federal Reserve Bank of America) want higher inflation?

Think about it. It's so they can make more money.

This is how I see it:

If inflation goes out of their target range on the upside, they use monetary policy to increase the interest rates to bring the inflation back into target range. Debt costs increase and this supposedly forces people to spend less to avoid the increased cost of the debt. Which, in turn forces consumer prices down to encourage more spending - i.e. lower inflation. But, on the flip side, where does the Reserve Bank (South Africa and the USA) make their money? Interest. If they are targeting the inflation rate by increasing interest rates, it has a very simple effect of MAKING THEM MORE MONEY.

What does this mean though? Let's break it down to a very simple calculation. If the South African inflation rate is sitting at around 4.1% and the American inflation rate is sitting at around 2.7%, what does this mean for you if you have money (cash capital) sitting in the bank? If it's sitting in S.A., it's losing value faster than if it were sitting in the USA. (These rates were at the time of writing this article).

But this is a pretty minuscule difference and will only really be felt by the super-rich, so it doesn't warrant any action, especially if we add currency fluctuations and interest earnings into the mix.

So, let's look at the currency quickly. The US Dollar has taken a beating across the board over the last year. Why? Was it on purpose? I think so, but I am no economist. I just try look at all the data with an open mind to see what specific incentives might be driving devaluing of the USD. And my conclusion of many hours of research is this - The U.S.A. is purposefully trying to inflate it's way out of the incredible debt it has. There are a host of reasons for this, but I'll go into that in another article some other time, as there are far too many to list here. What I will mention though, is that the new debt ceiling allows the US government to borrow more money (up to nearly $17 trillion) and they are already talking about QE3 (a third round of quantitative easing - basically printing more money later in 2011). At the same time, the more the currency devalues, the higher the inflation, the more the Federal Reserve Bank can use inflation targeting as an excuse to raise interest rates.

So who wins with this scenario? The U.S.A. inflates away large chunks of it's incredible debt. The Fed can use inflation as an excuse to raise the interest rates so it can effectively make more money. And the average consumer (namely us) is stuck in the middle with no control whatsoever over any of this.

How does this affect South Africa? Well, keep in mind that the USD plays an incredibly important part in the international financial system. It is the reserve currency used as the base measurement for pretty much all international trade. When the US dollar devalues against the Rand, it doesn't necessarily mean that the Rand has become stronger (it just means the USD has become weaker). But it does mean we sit facing very difficult problems due to our heavy reliance on exports for a large portion of our GDP. In fact, haven't you noticed a few articles recently about the S.A. government taking specific measures to devalue the Rand? If you haven't, take a look at these articles and do a bit of research for yourself:

Protecting Us From Opportunity

Securities laws are supposed to protect us from harm, but the rules that govern privately placed investments can end up shielding potential investors, not from fraud or theft, but from opportunity.

Federal laws were written after the Crash of 1929 to protect investors, particularly individuals with small portfolios, who got caught up in the mania of the Roaring Twenties and lost everything, often on investments they did not fully understand. The goal was to force companies to provide thorough and accurate data so that investors could make informed decisions. Not necessarily successful ones; the law recognized that investments will always have risk and many are not going to work out. The idea was that investors are entitled to know, in advance, exactly what they are getting into.

Today, however, this perfectly reasonable principle is producing patently unreasonable consequences. Because of U.S. securities regulations, Americans will be the only ones not allowed to invest in Facebook, an American company(1); a hedge fund is in legal trouble in Massachusetts for creating a website explaining its investment philosophy(2); and financial advisors who direct very large portfolios for clients may be unable to participate in similar investments themselves, even if clients would prefer that the advisor eat what he cooks.

The reason Americans will not be able to invest in Facebook is, paradoxically, because the public learned too much about the deal. Regulators consider investments in closely-held companies, such as Facebook, to be riskier because such companies are under less scrutiny from the Securities and Exchange Commission. Except for the smallest transactions, offerings can only be made privately to "sophisticated" investors who, based on the size of their investment portfolios, are presumed to have the experience and smarts to size up investments on their own or the cash to hire someone to do it for them.

The Facebook offering was nominally private, but the deal gained a great deal of attention in the general media, reaching members of the public who ordinarily would not be privy to such eyes-only information. Goldman Sachs, worried that regulators might decide the media attention constituted an offering to non-sophisticated investors, preemptively limited the offering to non-Americans. The company said in a statement, "Goldman Sachs concluded that the level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law."

Goldman Sachs was not being unreasonable in thinking that the publicity might cause regulatory problems. In 2007, the Commonwealth of Massachusetts sanctioned a hedge fund for giving information about itself on a publicly accessible website, claiming that the website constituted an illegal public offering. The hedge fund, Bulldog Investors, did not make any untruthful claims, nor did it directly encourage viewers of the website to invest. It simply gave a transparent account of its strategy and track record.

Nevertheless, the state argued that "even though not couched in terms of a direct offer," information on a website still might "condition the public mind or arouse public interest in the particular securities." In other words, information must be kept away from the masses, who might not be intelligent enough to handle it without becoming "aroused" and making rash investments. Bulldog fought back and legal action is ongoing.

Of course, no matter how much small-time investors' interests were piqued by the media coverage of the Facebook deal or by Bulldog's website, they still wouldn't have been able to take any real action regarding those opportunities. In addition to restricting the flow of information to those not considered "sophisticated" enough to make complex investments, securities regulations also outright prohibit most people from taking part in these deals.

The Facebook shares would have been offered only to "qualified purchasers," and, no matter who read its website, Bulldog was permitted to enroll only "accredited investors." Both of those words, "qualified" and "accredited," mean wealthy. To be a "qualified purchaser" an individual must have an investment portfolio of at least $5 million. The standard is lower for "accredited investors." A person might be considered adequately sophisticated to make an investment one day, and then, due to an overall drop in the stock market, lose that mark of sophistication the next day. Financial advisors who use their expertise to evaluate investments for wealthy clients are prohibited from using that same expertise in managing their own portfolios.

There is a fine line between preventing con artists from taking advantage of ordinary investors and blocking individuals from making their own decisions about what risks to take. The line is currently drawn in the wrong place. Moving it back to where it belongs will require two major adjustments to the Depression-era laws.

First, information that is accurate and not misleading should never be illegal, no matter how widely it is disseminated. The current suppression of information creates an unfair advantage for certain investors. People who have no idea what kinds of deals and terms are being offered to the most sophisticated investors are likely to accept much less favorable terms themselves. We see a lot of deals offered to moderately wealthy investors that bigger players would never touch.

Second, the criteria for becoming a "qualified purchaser" or "accredited investor" should be based on the size of an investor's portfolio in relation to the potential investment, rather than simple net worth. A qualified purchaser might be defined as someone for whom the investment would not represent more than, say, 3 percent of a portfolio. An accredited investor might be someone for whom the investment would not exceed perhaps 5 or 10 percent. The total exposure in a small portfolio to nonpublic investments could be limited to something like 10 or 20 percent.

Usually, a private company can include up to 100 accredited investors or 500 qualified purchasers. Because of this limit on the number of investors, all but the smallest deals are likely to have steep enough minimum investments that these percentage-based limits would keep out most mom-and-pop participants. But the percentage limits would still permit small investors to at least participate, in a modest way, in some of the same types of opportunities that bigger players get.

Securities laws were intended to guarantee investors fair treatment, which is an achievable goal. While it might be "fair" in some people's minds to prohibit all Americans, including the wealthiest, from participating (wisely or otherwise) in Facebook's forthcoming offering, it certainly misses the point. The securities laws have drifted off target. It's time to get them pointed in the right direction again.

Sources: