Hiring Practices

[mpallamary]

This issue came up today in a conversation with a business associate. It's probably a good time to recirculate it.

Onward and upward.

[DWoolley]

People hiring in today's market are the bravest of souls or on a fool's errand. I cannot be sure.

I am going out a on limb to prognosticate on today's labor market- a heaping serving of crow is, hopefully, my reward. We are currently in a gnarly recession. Due to the money floating around the shoe hasn't dropped, yet. The land surveying industry is going to take a solid liver punch late this year or early next year. Anyone checked Toll Brothers, Lennar, D.R. Horton stock recently? All down over 40% YTD (Yes, the last six months). The necessity of rising interest rates will serve as the backdraft to the economic inferno.

There has been a hiring fervor in the land surveying community as a result of firms willing to put a warm body - any warm body - on a billable project. These same firms are desperately hiring some mediocre folks at 1.5x the market rate for the skillset. In the private sector, scarcity of qualified staff has created blind optimism as to qualifications. There is a greed factor in play, private employers are willing to overpay new employees because they can pass the 1.5x wages onto clients and in theory, maintain overly demanding deadlines. Think about this, if you are DR Horton, Toll Brothers et al and their projects are at various stages of completion it makes sense to finish the current projects and rush shutdown with accelerated schedules - budgets are meaningless now - to dodge any future interest rate hikes and begin their employee layoff process in earnest. I have seen this movie in '81, '91 and 2008.

Home building is not the only market, Dave, right? Check Amazon, Target, Walmart stocks. Decimated. Retail space was already dead. Amazon is dumping projects and warehouse space in Southern California. The grace is that we can only die once.

Sure, but we have infrastructure, right? Yes, there is an infrastructure bill and we should thank Dog for it. The land surveying folks in the public agencies are in a good position (well done) to wait out the delays in the release of funding (2024-2029) for the work to start and more certainly, will have job security in the interim. The companies that fervently hired employees, especially the employees that demanded 1.5x market rate and/or telework from Texas or Idaho, it will be a bloodbath with unemployment lines, a modern day trail of tears, and then, breadlines.

Writing personally, currently I could hire three people and provide job security to those folks. However, I will not hire these work from Texas at 1.5x rate folks - Elon can have them. If I was a multistate multidiscipline firm with projects throughout the country I may see it differently. Hiring people in this uncertain market is not for me unless the person is a land surveying rockstar with hand to hand combat skills or a promising rockstar that I believe will work tirelessly to get licensed and will be a benefit the profession.

I sincerely hope I am wrong. I would welcome the ribbing for it.

It is not all doom and gloom. If you are in the market for large items i.e. refrigerators, couches, washer and dryer, anything that takes space, wait until this fall and you will see some great deals. Google "bullwhip effect". There are container ships from here to China full of their former backorders and the market has dried up. Check the stocks of Home Depot and Lowes, mom and pop projects are done. I am planning on bullwhipping myself into some appliance and furniture upgrades this fall. There won't be a line and there is sure to be plenty of inventory.

DWoolley

[mpallamary]

That was a good follow up. Speaking for myself, I anticipate getting busier. When the market turns down, people start fighting and that leads to the need for skilled land surveying expertise and a lot of lawsuits. What this means is all during the up times, folks should have been preparing for the down times as that is a different world.

Indeed, there are so many opportunities for the profession if we want to pursue them. Single market business models, like homebuilding or infrastructure support are always the worst. If you haven't done it already, diversify.

Diversify.

Diversify.

Thanks Dave, You are 100% correct.

[CBarrett]

Well I was having a pretty good day till I read this :p

So, what are current hiring practices concerns?
By the way I need a Survey Analyst type.

[DWoolley]

...
So, what are current hiring practices concerns?
By the way I need a Survey Analyst type. [join the crowd and pull the advertisements - see below, DW]

I begin with the fact that I only know a few things about a few things. My experience and knowledge are practically limited to land surveying, labor law, certain types of fraud and pouring epoxy countertops. Take the yarn I am about to spin in this context.

There has been a hiring fervor in most every industry. This hiring fervor in the land surveying industry has created what Alan Greenspan called “irrational exuberance” during the dot com bubble of the late 1990s. Private industry employers have lost their collective minds – to establish the atmosphere for a fraud a shyster will create a perception of urgency and scarcity (“you have to act now. I only have one left at this price”) to get folks to act against their own wellbeing. The hiring market has created the perception of urgency and scarcity and is currently operating against their own wellbeing – employers are being exploited and bamboozled. For what it worth, many firms with vacancies have begun quietly removing their advertisements for employees because they simply do not want to deal with the people in the market any longer. I have spoken to five such firms in the last two weeks.

There is plenty of good reads on the Great Resignation. According to a recent study by WorkJam, millennials make up 63% of the folks quitting their jobs. These are folks ranging in age from 25 to 40. The other quitters, 32% according to the study, are Gen Z (ages 10 to 25). For those lacking math skills, ninety-five percent of the quitters are under the age of 40. GenX only makes up 4% of the quitters. According to the TikTok videos, these quitters seldom give notice, and oftentimes flipped the employers the bird, literally or figuratively, on their way out the door. I would be willing to bet most of them have never heard of Johnny Paycheck’s ode to quitting a job, but it is anthem appropriate. I am intrigued by the folks that quit work to walk the earth like Caine ala Kung Fu.

Here’s the ever-cruel rub, Larry Summers (he is bo-na-fide) recently spoke in London on the America’s way out of our, yet to be realized, problems. Summers says we have three choices:

1. Unemployment at 6% for 5 years;
2. Unemployment at 7.5% for 2.5 years; or
3. Unemployment at 10% for 1 year.

Summers doesn't see any soft landings. For context, the Great Recession yielded 9% unemployment and we did not have $7 gas and 15% (and rising) increases in commodities i.e. food and other necessities. Just 39% of Americans can afford a $1,000 unexpected expense. Yep, this time around is going to smart.

Those that demanded telework in order for employers to get some of their awesomeness have made it easier on the employer to make employee cuts. Nobody really knows these newer hires outside of an occasional Teams meeting (they were hired post pandemic). The last hired is usually the first fired.

These ‘walk the earth like Caine’ folks will have plenty of time for life outside of work activities - maybe scribble out their memoirs for the benefit of all mankind. I figure, if they have water, they will live about 3 weeks on the street. Hopefully they can write quickly.

Best of luck to each and every Caine in every industry, in every state, god speed.

DWoolley

PS the "bullwhip effect" made the news this week. Sales in the fall.

[CBarrett]

Ok, so you're talking about current economic conditions in general. Yes, job hopping is turning into multi level marketing dynamic. Someone will be left holding an empty sack before too long.