toy company jobs

Japanese Supply Chain and Oil Price Shocks Temporarily Slow Recovery

The May unemployment rate ticked up to 9.1% from 9% in April. Incongruously U6, Toyjobs’ favorite employment statistic (which includes part timers and consultants who would prefer full time work) dropped by a tenth of a percent to 15.8. These numbers are just snapshots in time and it’s better to view their trends over a number of months. Should there be a trend toward slower employment growth, I think it will be reversing at about the same time it becomes readily apparent.

First, we should note that government statistics are notoriously inaccurate and will be revised several times before finalized. We also saw an oil price spike which has now begun to abate. Let’s not forget enough seriously crazy weather (tornadoes in Massachusetts?) to make an “endtimer” sound almost rational. Next time you’re at the supermarket remember to stock up on locust repellent.

I think that a good portion of the May numbers can be explained by supply disruptions after the Japanese triple disaster (3/11) especially in the area of auto components. No parts has meant less hours, no hiring, furloughs and layoffs in the huge US auto manufacturing sector which had previously been growing. In April, US economic growth was 0% but if you back out auto manufacturing the number would have been .4% which annualizes to a strong 4.8% (anything over 3% is pretty good). Now we can’t just extrapolate forward like that with any degree of accuracy but ex-autos the US economy was growing at a healthy 4-5%.

It will take Japanese suppliers several months to get up and running at full tilt and unfortunately the period of reduced supply will coincide with the usual summer hiring slow down. In July and August as people work shorter weeks (how much work really gets done on summer Fridays?), take long weekends and extended vacations it becomes difficult to get job candidates interviewed by all the necessary people or even get everyone together in a room to make a decision.

Additional drags on the economy this summer will be the end of QE2 (basically the government buying scads of bonds in order to keep interest rates artificially low) and the end of the Obama stimulus plan (roadwork everywhere).

As a seasonal/cyclical business the toy industry is naturally just a little out of sync. In most of the economy, companies get new budgets in January leading to a jump in hiring. The toy industry is up to its eyeballs in trade shows until March so much of that employment pop waits until then. Toy industry hiring has markedly improved this year but in just the last three or four weeks I have seen an even stronger acceleration in search starts. For small and mid-sized toy companies it’s often not until mid-May that retailers move from “happy talk” and planogramming to actually locking in orders. As toy companies gain clarity in their business outlook they feel more comfortable adding staff that they already knew they needed but were holding off on.

Increased search starts in late May/early June. Should lead to increased hiring in late June and early July. Typically there is a weak patch in search starts during July and in the first half of August. Late in August toy companies seem to suddenly wake up to the fact that the new sales season will begin in October (really before that if you want to get appointments scheduled for the Fall Toy Preview). If they want to make changes to their sales team before that they have to move fast. The reality is that they’re already late to the chase and probably should have started these searches in late July/early August. This next spurt in the toy industry hiring coincides with what should be an improvement in economic and employment numbers for the economy at large as people return from summer vacations and the Japanese supply situation improves.

That’s the plan anyway. Absent tea leaves and chicken entrails it’s all I can offer for now. That forecast will surely change with new information and heightened brainpower the latter of which seems unlikely during the summer months. September certainly feels a long way off for autoworkers and the unemployed but this soft patch should be over quickly so keep on keepin’ on.

Muddling through,

Tom Keoughan

By | June 8th, 2011|ToyJobs Blog|Comments Off on Japanese Supply Chain and Oil Price Shocks Temporarily Slow Recovery

From the Yuan Wars to Toy Company Jobs

As November’s very heated election approaches in a continuing climate of economic malaise, desperate politicians are pointing the finger of blame anywhere and everywhere but at themselves.  The nation is rightly disgusted with its banksters but is growing immune to the long and continuous public bludgeonings of their ilk.  In search of another scapegoat the thundering congressional herd lurches eastward – “Blame the Chinese! – after all they don’t vote in our elections.”

Chinese workers have been striking (or just not showing up) and demanding higher wages.  Frankly, good for them – they were being paid a pittance and many had pretty lousy living conditions.  I’m all for an increase in the purchasing power of Chinese factory workers.  That said, a dramatic upward currency revision, as many in Washington are calling for, could have all sorts of unintended consequences.

China is NOT sucking up as many U.S. jobs as is touted by the pandering vote grubbers.  Low end (toys, sneakers, small appliances, et al.)  manufacturing left our shores long ago and is not coming back.  You can’t make these goods in the U.S. and still meet “the Wal-Mart price”.  Even in these dire economic times no one will accept a wage low enough to make widespread U.S. consumer goods production feasible.  Well, except maybe in Detroit.  “What about cars?” you ask.  “Building cars isn’t low end manufacturing.”  Yes, they are building cars in China but they are not shipping them here.  Those cars are for Asian consumption.  By the way, part of “they” is “us”.  U.S. auto manufacturers are building cars in China for Asian consumption as well.

If the U.S. political class is able to harangue China into a significant upward revision of their currency, it will cost U.S. jobs.  American companies who have their products manufactured in China will have higher costs, and because it is very difficult to budge retailer’s price points, will therefore have smaller margins.  An environment of diminishing margins is not likely to spur additional hiring.  Companies will not be looking for additional sales marketing or product development staff.  This is especially true of smaller private companies where owners tend to view the cost of each additional employee as coming straight off the bottom line – which translates to straight out of their pockets.  A rising yuan doesn’t support these small businesses which are supposed to be the engines of American job growth.

In taking a country from the 12th century to the 22nd in the span of a mere fifty years, China’s leaders have to deal with far bigger problems than the U.S. Congress.  They are going to move slowly and do what they think is right for them – whether what they think is right, actually is right or not.  Them, of course, being the Communist Party, which is committed to maintaining power whether the country is communist or not.  What we will likely see is a few small gestures such as the past two weeks 1% rise in the yuan in an attempt to mollify the situation until after the U.S. elections (now only six weeks away) when everyone’s attention will be focused elsewhere.

One of the factors that is really holding up job growth in the U.S. is uncertainty.  Business owners like predictability.  They determine what profit margin they want in order to make an enterprise worthwhile.  Then they try to project sales (always tricky) and try to set costs at a level that will give them that margin or better.  Costs are supposed to be the easy side of the equation to figure out.  Unfortunately, we are currently in a situation where no one knows what health care costs will be or what climate change legislation costs will be.  No one even knows what the tax rate will be.  The tide may turn either for or against the business community but once we know what the rules are we can decide what to do about them.  Until we know the costs we can’t even do the calculations, therefore many things are being put on hold . . . like hiring.

In the current economic climate it’s time to scrap blindly chanting ideology and focus on the pragmatic.  Just so you know where this is coming from – I consider myself socially liberal and fiscally conservative but most of all a pragmatist.  “People can believe in whatever they want, I want to do what works.”  I know, I just painted a huge target on my back and expect to be pelted from all sides by Nerf missiles when I arrive in Dallas for the Fall Toy Preview.  In any case, what seems to be pragmatic in that it would help the economy and can also actually be passed and signed into law is to extend all Bush tax cuts for a period of two years and then review them two years on.  This is not the time for a 700 billion tax increase.  I think it’s likely that is what will happen.  Obama doesn’t have the votes to do what he wants and everybody realizes it will be disastrous if taxes increase for everyone at the end of 2010.

Upcoming tax certainty isn’t the only positive as the economy continues to slowly (very slowly) improve.  There are other “reasons to be cheerful”.  Despite the hot summer doldrums, retail sales for July and August slowly but steadily increased, coming in ahead of expectations.  August saw an acceleration in manufacturing in both the U.S. and China.  Growth was slow but again it was positive.  However, we should temper our enthusiasm on this particular metric.  It is completely natural for production to ramp up in July and August as seasonal goods are manufactured for late August/September pre-holiday delivery to retailers.  While sell in is good, the ultimate question is sell through.

Average hourly earnings – which decide how much money people have available to spend – were up by 0.3 percent.  There was also a rise in temporary employment which is often a prelude to the creation of permanent jobs.  A better than expected 67,000 private sector jobs were added in August and there were upward revisions to data for the previous two months.  True, the government shed 114,000 temporary Census workers but that was expected.

The September stock market has been strong and most economists are de-emphasizing the chance of a double dip recession.  Warren Buffett last week stated:  “I am a huge bull on this country.  We will not have a double-dip recession.  I see our businesses coming back almost all across the board.”  After all the gloom and doom of the summer it seems that we find ourselves in a situation where the economy is not collapsing but rather heading in the right direction though at too slow a pace to drive unemployment down.

The toy industry has several things going for it.  Most toy companies have focused this year on producing low cost goods.  While retail sales have been creeping upward, shoppers have been hesitant to purchase big-ticket items like autos, furniture, appliances. In fact, electronics retailers are revamping their aisles to focus on handheld gadgets to try to excite consumers who have grown weary of their traditional big-sellers:  televisions and personal computers.  After all, how many big-screen TV’s do you need?  Handheld devices are still pricey compared to toys.  The toy industry may find itself in the pricing sweet spot for the 2010 holiday season.

The growth of Toys’R’Us pop up stores is also exciting.  Last year Wal-Mart only had to deal with the competitive impact of 90 somewhat hastily assembled Toys’R’Us Express locations.  This year Toys’R’Us is planning 600 express stores with 300 of the locations already up and operating.  More locations, more shelves to fill and more competition for a Wal-Mart whose toy department will be 25% smaller this year, are all positives for toy companies.

As for toy company jobs, the annual late August/September hiring bounce has been somewhat muted for a number of reasons.  Retailers continue to order late in an attempt to shift as much liability as possible onto toy manufacturers.  The trouble is that factories have been relocating inland and north.  It takes longer to get goods to the coast, there has been a shortage of shipping containers and also massive traffic jams on roads leading to the ports.  Later ordering combined with longer lead times is not a recipe for success.  Over my three decades in the business, I have noticed that toy companies feel better about themselves and start hiring once their goods hit the retailer’s loading docks.  Later shipping has caused many companies to delay pulling the trigger on hiring decisions.  Also, all of the uncertainty over government rules, regulations and taxes has been a considerable factor.  Make no mistake about it some companies have begun hiring and we have begun a number of searches, but there are also a lot of companies talking about their staffing needs but dragging their feet rather than getting going.  Like the economy, things are moving in the right direction but slowly, slowly.

Still Muddling Thru,

Tom Keoughan

P.S.  Wow, sorry about the long tirade.  There must have been some “pent up demand”.  I guess the main difference between me and the Washington gasbags is that I have not yet learned how to talk in bullet points.  See y’all in Dallas.

By | September 22nd, 2010|ToyJobs Blog|Comments Off on From the Yuan Wars to Toy Company Jobs

Toy Company Jobs……What Next?

Job growth was anemic in July due to large government job cuts.  There was job growth in the private sector but it was less than expected.  Businesses are waiting for consumers to start spending while consumers are waiting for companies to start hiring.  It reminds me of a junior high school dance – nobody wants to be the first to step out.

There are two things we should keep in mind.  First, all the journalistic doom and gloom keeps people’s eyes glued to the screen/page which helps sell TV, print and internet advertising.  The entertainment/news business has been going through its own protracted slump and they are pumping out the pessimism for all it’s worth.

Secondly, July and August are always slow when it comes to both retail sales and hiring.  People are on vacation, outside, at the pool or hiding in their air conditioned homes instead of skulking around retail outlets.  Companies have different people on vacation at different times and it is very difficult to get much interviewing or hiring done.  Hiring slows even more in the seasonal consumer goods business as companies wait until retailers receive their pre-holiday shipments before they pull the trigger on spending decisions.

Economic indicators have been mixed but the economy is NOT falling off a cliff.  That July employment statistics were weak really isn’t that surprising.  I would expect the August numbers to be unimpressive as well.  It won’t be until we get to the end of September and end of October numbers that we will have a clear vision of which direction the economy is headed.

Most toy companies are telling me that sales into retailers are up (sell through to consumers remains a question mark) but that there continues to be pressure on margins.  Labor costs are up and the yuan and material costs are up marginally.  Factories are trying to raise prices.

Our forecast remains that there will be an increase in toy industry hiring beginning in September and running through the end of the year.  I am a little more concerned than I was that we may need one more year to reach that point in the cycle but I am going to wait for end of September and October economic numbers before succumbing to pessimism.  While things certainly are not good they are already vastly better than last year.

You will likely notice that our Toyjobs postings are currently a little thin.  Partially that is due to a number of searches that we recently completed.  Additionally, we are currently in the gap right before shipments hit the retailers’ warehouses.  I can say that we’ve been having a number of constructive conversations with employers and I expect a fatter list of toy company jobs after Labor Day.  So, steady as she goes.  Keep manning the oars.  Things could go either way from here.  We’ll know in November.

All the best,

Tom Keoughan

P.S.  Toyjobs Executive Monthly will be switching over to a Constant Contact format with our next issue.  If you don’t wish to continue receiving this every six weeks or so this would be a good time to opt out.  Just send us an email with “unsubscribe” in the subject line and we’ll take care of it.

By | August 17th, 2010|ToyJobs Blog|Comments Off on Toy Company Jobs……What Next?

Toy Company Jobs Turnaround Continues

The headline US unemployment rate fell from 9.9% to 9.7% in May. Unfortunately most of the decline was due to the hiring of temporary census workers who will hit the streets again in early autumn. The numbers weren’t good, no matter what the Obama administration may say, but negative reaction was likely exaggerated.

When looking at anything as complex as an economy it’s important to look at multiple data points and many of the relevant numbers showed continued signs of slow improvement. Toyjobs has long been partial to U6 which includes underemployed people who would love to have full time work but can’t land any. In May, U6 dropped from 17.1% to 16.6%. We also saw an uptick in the length of the work week and average hourly earnings. Small business confidence in the US rose in May to a twenty month high. These are all “reasons to be cheerful.” It’s also important to remember that the government statistics are always inaccurate and will be revised two more times before they settle on final numbers.

It’s better to evaluate trends rather than specific points in time. Over the last few months the majority of key economic data points have been improving at a slowly increasing rate. TGBF. Things are Getting Better Faster. If we see two or three consecutive months of many economic metrics declining then it will be time to get worried. We will have the final revisions to the May data by then as well.

Let’s try to keep in mind that the big government unemployment numbers include all types of jobs like construction, as well as factories and warehouses where unemployment is exceedingly severe. Most US toy company employees are white collar workers where the unemployment rate has been bouncing around between 4.7 and 5.0%.

That’s not to say that the toy industry doesn’t have its challenges many of which lie in China. While the revaluation of the yuan seems to have been temporarily postponed due to the Europe’s sovereign debt crisis; a prolonged drought is causing Chinese manufacturing centers to operate in a climate marked by rolling blackouts. There is also a severe shortage of workers which has emboldened those still on the job to engage in strikes (see The China Report). Consequently labor costs have already risen 20-30% and will likely continue to rise. If this keeps up consumer-product manufacturers will likely seek new manufacturing centers. Factories are already springing up in Vietnam, after that?… North Korea?… Greece?… Detroit?

Anecdotally, Toyjobs has seen increased new search starts in April and May and the rate of improvement is strengthening. TGBF. Last week I spoke at the Fordyce Forum, an educational conference for senior recruiters. As I talked with the other speakers, all top recruiters in their fields, I heard overwhelmingly that their business had either already turned or was just beginning to turn.

Companies aren’t expanding their staffs from pre-2008 levels but where holes have developed, they are now filling those holes. A year ago they just left them vacant. My ongoing forecast is for a pop in search starts beginning in late August running through September and October. Most toy companies are telling me that they think they are having a good year but that, coming out of The Great Recession, they will remain cautious until they are sure. In late August and early September as goods are shipped and reorders begin the toy industry will be much more comfortable as the perceived improvement in the business becomes tangible. Until then order revisions from retailers are still a concern.

A troubling trend I have noticed is that an increasing number of people, on both the client and candidate side appear to be suffering from misplaced anger. Individuals, families and businesses have found themselves in a period of prolonged economic stress. Frustration is understandable as people feel that they have lost control over their lives. There is an increasing number of long term unemployed, people see their businesses under severe financial strain and even the currently employed feel the stress of doing their own work as well as the work of two other people who were laid off. One thing I can say for certain is that there are very few bankers, mortgage brokers, congressmen or (insert your favorite here) working in the toy industry today. In the toy business at least, it’s a pretty safe bet that anyone you are dealing with is not the cause of the current economic climate.

As you can see in the article below, acting out upon misplaced anger can be the start of an ongoing pattern which certainly won’t help anyone personally or professionally. Most of us are mostly keeping it together but for a few it’s important to realize that things are getting increasingly better. Don’t let this period of stress leave a permanent stain on your reputation. People would be well advised to cool it a little.

All the best,

Tom “Cucumber” Keoughan

By | June 14th, 2010|ToyJobs Blog|Comments Off on Toy Company Jobs Turnaround Continues

Revaluing the Renminbi and a Toy Jobs Turnaround Begins

Much of the news chatter over the last month has been about the pressure being put on China to revalue the renminbi. While it can easily be argued that China is manipulating its currency, there will be losers if the yuan begins to rise.

One major loser will be companies selling consumer hard goods in the U.S. (we don’t buy much food from China). If the renminbi rises it will cost more U.S. dollars to produce goods in China. That could mean higher prices for American consumers at a period in time when they can ill afford it.  Another scenario could see Wal-Mart and its retail brethren holding their price points firm thereby squeezing the margins for U.S. consumer hard goods makers. U.S. companies will then try to beat the difference out of Chinese factories that are already operating on razor thin margins. Arguably, this was a major contributing cause for the product quality problems of 2007.

While American politicians are naturally jabbering about jobs during the current period of high unemployment; the reality is that a rise in the yuan won’t help U.S. job growth as much as advertised.  China is the final assembly point for the global economy. If the yuan rises that will increase its purchasing power making it that much “cheaper” to buy natural resources and components from Korea, Malaysia, Australia etc. That will make manufacturing in China even more attractive. On the other hand, thousands of U.S. consumer goods companies may have their margins squeezed making it that much more difficult for them to hire additional employees.

The Obama administration has said that it wants to double U.S. exports over the next five years with a particular emphasis on large developing countries especially China. Since China doesn’t currently have a very large consumer economy that means we’re talking about great big stuff – infrastructure projects that benefit the likes of General Electric, Caterpillar and Bechtel. Certainly global behemoths like these are capable of making larger political donations than ABC Toy Company. Coincidentally(?), they also tend to have large unionized workforces. It’s above my pay grade to say whether we should pressure China to stop manipulating its currency or trade sales and marketing jobs for union jobs. I’m just saying that there will be winners and losers.  That’s the way the world rolls.

Meanwhile, back on the unemployment front; the job market is showing signs of life. Employers added 162,000 jobs in March, but almost one third of the growth came from the government hiring temporary workers for the census (in order to pave the way for the next round of gerrymandering?). While the headline unemployment rate (U3) has remained flat at 9.7% for the last three months; U6 (which includes the underemployed and discouraged workers) has started to creep upward from 16.5% to 16.8% and finally 16.9%. This is mainly a result of people who previously weren’t even bothering to look for work who are now beginning to restart their job searches as they begin to feel that the climate is getting a little bit better.

Indeed, there’s a good chance that we’re at the inflection point for unemployment. Increased demand on top of steep cost cutting (people) during the recession has meant a swift rebound in corporate profits. The level of profits economy-wide remains below the 2006 peak but accelerated sharply late last year. In the third quarter after-tax profits jumped 12.7% from the prior period. It is widely thought that when we get the government data, there will be similar strength in the fourth quarter of 2009 and in the just ended first quarter of 2010.

A recent surge in the hiring of temporary workers, often a precursor to full-time positions, also bodes well. Employment of temps has jumped by 248,000 since October; a 15% gain that is one of the strongest rebounds ever.

UPS, Federal Express and many trucking and rail companies have seen business activity picking up sharply. UPS reported last week that during the first quarter not only had their international business grown rapidly but that US domestic volumes grew for the first time in two years. Transportation activity has started to turn but remains well below previous levels meaning there is significant room for expansion. That seems to indicate that manufacturers and retailers (!) are still far from completing inventory restocking.

In March, the consumer seems to have rejoined the party. Consumers have shed an increasing amount of debt through defaults and government incentives for banks to forgive mortgage principal. Economists now expect consumer spending to grow at an annualized rate of 3% in the first quarter. In March there was a 1.6% surge in retail sales as shoppers turned up in surprising numbers at stores, auto dealers and restaurants.

Anecdotally, just as spring weather suddenly hit us in the second week of March, too the job market seemed to blossom as our phones started ringing off the hooks with companies inquiring about new search starts. All this is very hopeful but we can’t eat hope. Most of the toy company executives I speak with are feeling pretty good about 2010 but they remain cautious. They “think” that they’re going to have a pretty good year but they won’t “know” it until August/September. That is traditionally a time when hiring jumps in the toy industry and I expect a big pickup in activity then. In the meantime, while the climate is certainly not good; things are getting better faster. KGOY? TGBF!

Still cautiously muddling thru but breathing a little easier,

Tom Keoughan

By | April 20th, 2010|ToyJobs Blog|Comments Off on Revaluing the Renminbi and a Toy Jobs Turnaround Begins

It Wouldn’t Be Toy Fair Without Snow

The New York Toy Fair brought both the annual snowfall and a sense of realistic optimism which was far more encouraging than last year’s dour face fest. The mood was upbeat but realistic and mostly devoid of trade show happy talk (We’re doing great! Everything’s fantastic!) although a few other toy industry commentators did suffer from a little “irrational exuberance.”

Traffic was very strong on the three days that I was there. I even saw smiles in the “basement of gloom” as downstairs traffic was much improved over last year. Several toy industry executives commented that the quality of the traffic was quite high and that there were a lot of mass market buyers in attendance. Exhibitors also said that smaller specialty stores were writing a lot of orders.

I’ve lost some weight so that my feet weren’t as sore as usual as I traversed the world’s hardest floors. There were a few clients and prospective clients that I didn’t get to see because they were always busy with customers. I don’t look at that as a bad thing: sell away, grow your businesses, add more employees – I am very happy with that.

There were a sizable number of mass market toy manufacturers not “showing” but still skulking through the aisles and taking meetings in the food court and other clandestine corners. Personally, I miss that room on the 13th floor of the toy building that had all the big leather comfy chairs. It was down the hall from “the mayor of the toy building” Bob Gellman’s showroom. It was great to see Bob at the Javits Center in 2010.

One complaint that I heard from several attendees and would like to echo myself is the demise of the printed Toy Fair directory. This was a very handy and useful tool that sat on or near the desk of many a toy executive, me included. Although billed as part of a “green initiative” this was clearly a cost cutting measure. One booth attendant told me “we tried to move it online but most of the companies didn’t sign up.” I do applaud “the virtual tote bag” program. What could I possibly do with another Homer Simpson key chain? Doh! We should try to differentiate between useful and just plain waste.

Part of the reason for Toy Fair’s optimistic tone was likely due to Wal-Mart’s strong showing for both the fourth quarter and the year. As the world’s largest retailer Wal-Mart’s financial reports are a closely watched barometer of the economy as a whole. For the fourth quarter total sales rose 4.6% with a 22% increase in profit. On an annual basis, Wal-Mart’s total sales rose only 1% (we all need to remember how awful the first seven months of 2009 were) and profits were up 7 percent. While the fact that same store sales (which don’t include the effects at Wal-Mart cannibalizing it’s own stores) for the fourth quarter were down 1.6% may be of interest to Wall Street analysts; as suppliers the toy industry is much more concerned with how much total stuff moved off total shelves. So, not a bad year for the world’s largest retailer in the midst of the worst economic climate since The Great Depression.

In other Wal-Mart news, toy industry executives were initially concerned with the announcement of a global sourcing partnership with Li and Fung. The unit will be called WSG and Wal-Mart has the option to take full control of it in 2016. Initially, that sounded a bit ominous to everyone but it appears that WSG will be focused on non-branded private label merchandizes. Due to Wal-Mart’s shrinking of the toy department, that’s not really what they’re buying for the toy aisle anymore anyway. In the short to mid-term though, I can envision Wal-Mart putting together direct to retail deals between licensors and its WSG unit. This could easily affect things like kids licensed backpacks and stationary and other items not requiring much tooling (or risk) and could possibly be expanded down the road.

As far as toy industry hiring, we are beginning to get some job offers. New search starts are continuing but at a slower pace than the first of the year new budget bump. I continue to see this as a recovery year where hiring will continue to gradually improve especially in the second half. It’s still not good out there but it is much better than last year. We all have to muddle our way through and hopefully by 2011 things will be mostly back to normal.

Muddling through,

Tom Keoughan

By | March 3rd, 2010|ToyJobs Blog|Comments Off on It Wouldn’t Be Toy Fair Without Snow

Toy Industry Hiring Continues at Strong Pace

Toy industry hiring continues at a furious pace.  Here at Toyjobs, 2004 was our second best year out of 23 years and 2005 is likely to eclipse that.  During the 2001-2003 economic slow down, companies cut back more than fat; they cut muscle and bone.  Now that the overall economy has strengthened (although the toy industry has only strengthened marginally), companies just can’t get the work done.  Nobody really wants to hire, but everybody needs an extra pair of hands or two.

Some companies are shooting themselves in the foot in their quest for talent because they have no sense of urgency.  Larger companies with big HR bureaucracies have painfully slow processes, while in smaller companies hiring managers tend to focus on today’s emergency rather focusing on the bigger picture–having the best people on board so that they can avoid having emergencies every day.  While there are plenty of “bodies” out there, the best candidates will not wait around.  They are getting multiple offers and to secure their services, you have got to move fast.

Slow hiring processes and decision making can be made many times worse by a lack of communication.  I think it was “The One Minute Manager” which said “Never call anyone, or especially call anyone back, unless or until you have something to tell them.”  This has been great advice for “keeping your desk clean,” but a disastrous recipe for getting business done.  It’s easy to “keep your desk clean” if you’re not doing anything.  Just as it’s easy to get blindsided by problems if you’ve decided not to communicate with anyone.  Also, rather than building business relationships, you risk destroying them.  In business, people have very long memories.

In the hiring process, if you are not communicating with a candidate one of two things (or two of two things) are likely to happen.  First, the candidate may reasonably believe that you’re not interested in them and focus on other opportunities.  Second, they may decide that he/she doesn’t want to work for a company where people don’t communicate.  In either case, you have probably lost him both now and if you ever decide to pursue him in the future.  He is also not likely to give your company a great review should a colleague, who may be considering going to work for your company, happen to discuss it with him.

I often wonder, if hiring managers have any idea how many top candidates they lose because either their process or decision making takes too long or they fail to communicate.  The good news is that all three of these problems are pretty easy to fix–“Just do it.”  In the medium and long run you’ll make your own life alot easier. 

 

All the best,

Tom Keoughan

By | October 4th, 2005|ToyJobs Blog|Comments Off on Toy Industry Hiring Continues at Strong Pace