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I've got to get something off my chest. 

So here's the thing.  I'm going to do my darned hardest to scrub any USA politics from this and keep this zeroed in on recruiting.  You people are bright and will get it.  But please, even when you solve the equation, don't try rallying political debate below.  I won't play.

Last night while walking the cockapoo, I was listening to the radio and a 50 year old man called the program to explain that his company insurance in Florida was increasing his monthly health care amount from $260 to $790, an annual out-of-pocket-and-paycheck amount equal to $6,000.  This happens next August.  He can't afford it and he dropping healthcare all-together.  He won't have healthcare insurance after August, 2014, because the government cost for the lowest level plan was over $800 per month.  He can't afford it.

Those who made it (reading this) to this point, I encourage you to take this text, cut/paste it, and put a meeting notice on your computer's calendar to pop up February 1, 2015.  Why?  Because we'll see if what I'm writing below will come true.

I am preparing my office for 2014.  We operate in the automotive industry and we're a third-party boutique agency.  Right now and for the past 24 months or so, this industry has been ripe with job orders (JO's) and the candidates have been scarce.  Not an industry for the weak of heart.  You spin around in circles working 5, 6, or 7 JO's that go nowhere for weeks.  Pretty painful. 

Here's my observations about what's to come.  Indulge me while I turn some crazy ideas into a blog-post.

AS A HEADHUNTER, when I'm out there sourcing, I bump into different varieties of people and here's the basic breakdown (I'm going to use Greek letters to temporarily label them for ease of writing):

The "Alphas":   These are poor people.  They pay no taxes.  They are unemployed.  They are often mentally or physically handicapped and rely on government programs and charity.  They are the unfortunate of our society.

The "Betas":  These are people who are capable of work but don't for a variety of reasons.  The result is that they often (but not always) utilize government programs for sustenance and existence.

The "Gammas":  These folks are non-conformists.  They may work.  They may pay some taxes.  They don't "believe" they are part of the structured society.  They may pay some taxes to keep the government out of their lives and they are often in the skilled trades, blue-collar workers, or white collar workers.  From a recruiting standpoint, it's very difficult to place these people.

The "Deltas":  THESE ARE OUR CANDIDATES!  They are contractors, blue-collar, white-collar, and salaried employees.  For Deltas, work is part of life.  Period.

There are roughly 1500 politicians in the USA who have made a grave miscalculation.  Everyone from sea to shining sea has been force-fed years of platitudes on how to fix the Alphas, Betas, and Gammas.  In fact, these debates have raged since the biblical days.  

My fellow recruiters, whether corporate, HR, or agency, think about it.  Think of that recent job offer that went out to a candidate who waffled over a thousand or two or four thousand dollars in annual income.  I make no light of this.  Salaries and hourly pay in job offers is serious business.  It's often make or break for the candidate signing up.  As recruiters, we often hold are breath during this decision-making process and each of you has your own tactic for dealing with that.

Next year in the USA, a HUGE PERCENTAGE of Deltas are going to see their disposable income DECREASE by $1,000 to $20,000, depending on their situation.  This is all due to healthcare prices changing.

This train has left the station folks.  And I'm incredibly sorry to sound cliché and here's my prediction:  THE WAKING OF THE DELTAS IS THE AWAKING OF THE SLEEPING MONSTER. 

What will be the natural rebellion of an engineer who, at a salary of $90,000 that translates to disposable income of roughly $60,000?  What happens when the $60,000 turns into, for example, $50,000?  So Bob gets a monthly paycheck of, after tax, $5,000.  This changes overnight to $4,160.  Bob is DOWN $840 per month to live on. 

Bob, and his fellow Deltas, are going to grab their telephones and START CALLING US. 

Prediction 1:  Mark my words!  Our phone's and e-mail are going to blow up.  How are you to handle that as a recruiter?

These people, the Deltas, are going to be DESPERATELY ready to change jobs to find a higher salary.  This will lead to vacancies at companies.  Some of those vacancies may be secretly welcome with no replacement.  However, HR teams are going to be grappling to fill key positions.  Leading to....

Prediction 2:  A market adjustment in salaries.  What's it going to take to counteroffer to retain good employees?  Answer:  More money.  Divide it up however you want.  The company is either going to pay for the healthcare (if that's even legal...I don't know) to offset the increased cost.  However, this can't happen in a vacuum...or in other words...just for an individual employee.  It would probably have to happen, to some degree, company-wide.   But I think that's not possible because of the meteoric affect to the bottom line (profit).  So the safe way to retain the employee is by bumping their salary.

Prediction 3:  Recruiters will be force to utilize their time wisely or perish.  We will not be able to field this massive quantity of calls from desperate candidates.  Recruiters who try to console "un-placable" candidates will burn up precious production time.  Hence, they will fail.  How do we handle the volume while maintaining integrity?  I don't have an answer.  (But I have ideas that we're working on now.)

Prediction 4:  Salary will be King.  As recruiters, we often deal with many factors in a candidate changing jobs including relocation, benefits, commute, and other tangible elements.  My prediction is that in late 2014 and into 2015, candidates will take themselves into survival mode and be primarily and possibly exclusively "salary driven". 

Pre-closing candidates by nailing down specific salary targets is a skill that every recruiter must need to master.  Even if this is a standard practice that you do now, we know there is that critical "wiggle-room" factor that we have to exceed in order to keep the candidate from waffling.  For employed candidates changing jobs, I believe, for the most part, lateral pay moves will disappear until after 2015. 

In closing, if I'm right and our Deltas incur a massive hit in monthly after-tax expendable income, how passive will the Deltas lead their revolt?  In the automotive industry, the monthly average cost of healthcare from our salaried, white-collar employees is right around $100 now.  Again, that's monthly.  So the annual cost is $1,200.  Chump change, I would argue.  IF this increased suddenly from $1,200 to $5,000, $10,000, or even $15,000, we are looking at the proverbial tidal wave white-collar mutiny. 

How can I be wrong?  Does anyone out there think that healthcare costs will maintain their present costs.  And certainly there's no way costs will lower, at least in the automotive industry.  I'll probably be flogged by the naysayers that my fantasies are rooted in exaggeration.  Umm.  I don't think so.  Even one of the recruiters in my office has seen his spouse's healthcare go from $300 per month to over $900 per month starting 1/1/14!!!  

The bottom line is that I'm predicting big changes and I'm looking into things around our office that may need a severe makeover.  Everything is being evaluated.  We are under serious review of our phone system, voicemail system, e-mail storage, databases and ATS, our scripts, and even our office security.

Please don't call me "Chicken Little" until February, 2015.

- Steve

Views: 256

Tags: Agency Recruiting

Comment by Matt Charney on December 5, 2013 at 11:47am

I don't agree with many of your points, but I like that in a post. Nice job stirring the pot and providing a personal perspective with some good argumentation - appreciate content that isn't just some numbered list or thinly veiled sales messaging. Thanks for sharing this, Stephen.

Comment by Derdiver on December 5, 2013 at 1:07pm

I just did a post here http://www.recruitingblogs.com/profiles/blogs/winter-i-coming and on a website in the cleared industry about this very thing. However, I disagree salaries are going to go up.  The trend has not been there in the DC Metro area and this area is one of the areas to really not be hard hit. Until now. Salaries have gone down across the board by 3%. That is an official number. Not much to some but a dramatic change in this area. The mid to senior people are seeing no advancement and if they want to leave it could be for less money.  A person wrote this in my comment section and it was meanigful to me 

"As a GS-2210-14 (INFOSEC) with clearance I’ve noticed a general freeze across the job landscape. Agencies seem to be in lock down or hiring freezes and the over all job market for people like myself in the INFOSEC space seems to be cold and dark. Winter has set in and I would say that has been here for some time. Competition for jobs is much harder with folks who have much higher quals going for lower jobs and pushing people like me out.

I was under the (false) belief that being in INFOSEC and have a high level clearance would almost guarantee my ability to move around the federal space. Yet the landscape is a cold, dark, and frozen as those beyond the great wall. Worst yet the outlook within my agency is equally grim with sequestration gutting information security programs or putting efforts to shore up security being placed on hold due to lack of funds.

Training funds have drawn down to (ZERO) dollars and the prospects to any kind of mobility or advancement have vaporized. So the question I ask is how do I keep my INFOSEC career in the federal government (as a FTE) on track when all tracks seem to lead no where? Great article that you’ve written here but I really want to know how do I survive this long winter??? I got into INFOSEC because I liked the challenges and I thought it was a secure position but recent events have proven that theory wrong."

I would like to have a rosier view of the coming years but I am not sure if that is going to happen. 

Comment by Recruiting Animal on December 5, 2013 at 1:47pm

So, Matt Charney says Steve is wrong about a windfall for recruiters due to Obamacare.

Comment by Matt Charney on December 5, 2013 at 2:13pm

I hate it when people call it "Obamacare." No one refers to Iraq as "Bushwar." But I do think that it's not so much a boon to recruiters as it is lawyers and HR generalists who care about compliance above all else - we just need something like SOX & IFRS in the accounting industry to create a ton of jobs out of nowhere for no real reason. Suggestions, Michael? Canadians are good at creating unnecessary rules like bilingualism and high sticking and punting on 3rd down.

Comment by Stephen Nehez, Jr. on December 5, 2013 at 2:19pm

But Obama just referred to it as "Obamacare" yesterday in a speech? 

Again folks, please cut out the politics.  Assume the law is moving forward.  Read the evidence in articles all over the internet related to the COSTS...not the politics of the situation. 

I cited one of many (and that over 10) cases where people one degree from me who are Deltas are seeing their monthly payment increase by three to four times.  It's real!  It's happening!  Don't cloud it up with personal opinions over politics. 

Comment by Matt Charney on December 5, 2013 at 2:26pm

Stephen - well said. I agree - "it's happening, don't cloud it up with personal opinions" is a pretty good benchmark for most content related to trends in the recruiting & HR space ("Did you know people have internet on their cell phones now and use them to look at jobs? Crazy!"). Thanks again for contributing.

Comment by Keith D. Halperin on December 5, 2013 at 4:53pm

While job churn is good for our business, I keep hearing about how everyone is fed up and going to quit soon, and all of us recruiters will be "ridin' piggyback on a rainbow".

Where will these unhappy folks (who largely aren't part of the Fab 5%) GO? We aren't seeing  the creation of large numbers of well-paying, well-benefitted FT jobs for folks to go into,.similar to what Derdriver said. If someone leaves one well-paid, well-benefitted job, there's a reasonable chance that it will be filled at a lower cost, and the person will have to get a job that's much less compensated. That's a phenomenon known as "the hollowing out of the American Middle Class."

Re: Healtcare cost containment: Of COURSE THERE ISN'T ANY. It was kept out of the whole deal in at least of a couple points

1) When the Single Payer Option was taken off the table,

2) When the Feds were prohibited from cost containment efforts like allowing group-buying from pharma companies to lower costs.

Finally, Stephen: you bring up an issue which is intrinsically highly-political and you say: " Keep politics out of it!" How does that work?

Cheers,

Keith

Comment by Stephen Nehez, Jr. on December 5, 2013 at 7:28pm
Guys. I was a jerk with my last post and apologize. - steve :)
Comment by Daren J. Mongello on December 9, 2013 at 1:00pm

Respectfully....I don't see it as you do. One of the key components of the ACA is the "80/20" rule. Should an insurance provider fail to spend at least 80% of revenues on patient care....the difference is to be refunded back to the clients. Will insurance premiums go up for some? Yes...but so will salaries. And policies in many states will flatten or decrease. Anyone YOU want to recruit, your clients (or their competitors) will find a way to keep. 

In the end.....a 50 year old (and presumably a home owner with assets) is going to have to think if going without health insurance at his age is his smartest play. 

A better question is this: they couldn't come up with a better portmanteau than "cock-a-poo"? :)

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