Market Place - Looking at 5 Digits, Again, for the Dow - NYTimes.com

Market Place - Looking at 5 Digits, Again, for the Dow - NYTimes.com

The Dow, which closed up 124.17 points, at 9,789.36, on Monday, is within reach of 10,000. Who would have thought?

At the depths of Wall Street's crisis, when traders were despairing and shares of Citigroup were trading for just over a dollar, Dow 5,000 seemed a likelier prospect than this.

But now, one of the most-watched measures of the financial world is on the cusp of jumping back to five-digit territory.

That does not mean the economy's problems are over, or that 401(k)'s are going to be made whole anytime soon. In fact, this milestone could even stall the rally if enough investors use it as an opportunity to cash in their gains, analysts say.

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Frustrated? Its not you, believe me!

Don't let it get you down! It's not you. It's the economy.

Remember, that what's happening in commerce and the world of employment in general, is a reflection of the overall slow economy and the safe measures being taken to reduce economic exposure and commercial risk. It's not a criticism or a commentary on you and your specific qualifications. You cannot stop the world going around each day, even if sometimes we get a bit dizzy from it. Don't take it personally.

Lots of highly qualified people are available on the job market and aren't getting responses to their résumés or callbacks for interviews, let alone job offers. It's not because you lack experience, good sense and credentials. It's not because you're doing something intrinsically wrong. It's the economy, so beating yourself up over the lack of progress you're making in your job search, is not going to help. In fact it will erode your confidence further.

Revitalize, don't reinvent. Job seekers may not need to "reinvent" themselves for today's job market. They may only need to "repackage" themself. A much more agreeable and achievable task.

Forget about the instant makeovers. These are for people who have something to hide. Companies need the experience and accomplishments you have earned over time. Leverage what you already have and focus on it, instead of what you fear you may lack.

This will go a long way toward helping you feel more confident about your experience, rather than makimg you feel old, tired and out-of-touch. (passed it and passed over)

Beware of getting suckered in by personality tuners and career coaches. When times get tough, the tough can be assailed by hype. There are good consultants out there that can offer to revise your résumé', put you in touch with the 'hidden job market' or coach you to become a newer, more marketable you but be cautious and keep your wallet closed.

Not all career coaches as snake-oil salesmen. They provide a worthwhile service, especially to people who have not been in the market for some time and need help with their communication and marketing skills. Good consultants' customers will vouch for them.

There is an old adage that says; Seduction trumps selling. The tight job market has made some job seekers overly aggressive. They think they need to hunt down and beat prospective employers over the head with their qualifications, and can resort to telling hiring managers that they are the "perfect candidate" rather than letting their experience speak for itself.

In business as in love, infatuation rarely develops into a long lasting relationship from being pushy or gushing out a soft schmoo routine. By all means explain and align, but resist the urge to exclaim and alarm. Let people reach their own conclusions about whether you are a potential world class employee or not, they will whether you like it or not.

Yes, by all means be different from the crowd. Stand out at the selection process but remember there is a narrow line between; very attentive and stalking, great enthusiasm and desperation, highly confidence and arrogance. As with meeting new friends and potential mates, do not be afraid to show some aspect of your vulnerable side and I don't mean walk with a limp.

Another big dilemma the job seeker faces is whether to take a lesser job that's a temporary fix, a stopgap. Some wil urge you to choose your next job wisely and not take stop-gap measures. In the real world, life and bills go on. People need to pay their mortgages and feed their families. I will cover some of this discussion in my next blog.

Laid-off! Oh No! What now?

Crystal Balls

The USA reported that 2.6 million jobs were lost in 2008, with 524,000 axed in December alone. Unfortunately, the situation isn't expected to be any better in Europe in 2009. People who invested years of hard work, loyalty and dedication have been shown the (back) door. Now they find themselves out in the street, left wondering what their futures hold.

Discard Pride and take Courage
The newly unemployed can't afford to miss a beat. Yes, the economy has deteriorated. Yes, more layoffs are coming. Yes, it's harder to find a job now than it was a year ago but while some will react badly, smart job seekers will get tough and get going. They'll brush up their résumés, hit the job boards, work their social networks and polish their interview skills . Remain calm, collected and focused on finding the next opportunity.

Resting for the Hunt

Finding a new Job is Your Full-Time Job
You might not be fully employed, but you do have a job. Your job is to find a new position. Remember, you have been released from you current commitments, you have not been granted permission to take time off and lick your wounds.

Some people may feel they have enough savings to live off for a month or two, before they throw themselves back in the market. Sadly, if you let yourself slip into the "let's call it a break" mentality, you seriously risk losing your edge and when you do decide to actively pursue a job, it'll be that much harder to get back into the working harness and the pace of things.

Job hunting race
Secondly all your colleagues are now running ahead of you in the job hunting race. You may even find that you have competition from some of your old colleagues, the ones that are not being laid-off. These are the 'jump before you're pushed' brigade. The ones that have seen some scarey writing on the wall near to them and this has provoked them into finding a more secure company to work for.

If you start to pursue a new position immediately, you'll be much more fit and prepared to seek out and find the right opportunity. You will still be hot from the fight. Your readiness will show in your interview attitude, from the way you present your résumé, to the way you conduct yourself while under scrutiny and in your ability to negotiate, confidently.

Slainte!

Keep Your Spirits Up
This is not a license to drink more whiskey, not that I want to discourage you. Being laid off in today's economy can send any level-headed person into a panic. That's why it's important to keep your priorities in check, preferably a reality check. Keeping your spirits high keeps you motivated to get back out there with the level of enthusiasm you need. Did you ever walk over hot coals? as part of a team-building course. Well, if you did then remember the state of mind you assumed at that time, face forward, focus and take that first step.

Step up out of the trench
Professionally speaking, your layoff could be a big blessing in disguise. You know that you felt unappreciated, stifled or bored in your old job! The company politics were dragging you down! So, now is the time to stop whining and find your true calling. Take advantage of this time for expansion, self-discovery and growth. Re-build, renovate and re-invent yourself.

Find a job or position that really challenges you in new and exciting ways. We are all the sum of multiple characteristics and talents that grow and change with knowledge and experience. Look at the different aspects and elements of your complex character. Train and develop some of these and allow others out for some exercise and experience. Try something new. Pick up on an activity that you used to enjoy, something you already know and can expand.

Hail! Friends Countrymen!

Network, Network, Network
When the going gets tough reach out to everyone you know and maybe some that you don't.

Looking for a job is no shame on you and you, like everyone else need to be supported.

Clearly, people don't like to talk about their sudden unemployment but remember that everyone knows the economy is down. Through no fault of your own, you find yourself in the growing army of newly unemployed people but YOU are one of a kind.

Tell your friends. Tell your family. Post updates on social networking sites. Let people know you could use some help, and ask them to put you in touch with people they know are hiring. Make sure everyone knows you are in the market, you are developing new skills and have something more to offer.

New Skills! New vacancies!

Recruitment agencies can help
Talk to recruitment agencies, whether you are looking for full-time or part-time employment. These agencies have already seen a noticeable increase in clients who have never used a staffing company before now. You can be sure that they have already planned for this increase in demand. It's their job.

Advice from friends is helpful, but staffing professionals know the ins and outs of local employment and can propose or suggest that you follow a new direction, one you had not been aware of or considered. Even more importantly, recruitment agencies have established good relationships with local companies. Listen to what they say.

Skills Gap Analysis
Recruitment agencies are also a good source of information regarding what key skills are most sought after, by the market. If you have good current skills they will be able to tell you how to package and market them. If your skills are out of alignment with the market, they can give you good advice as to how to change or tune your approach to a better fit.

No Demand for Zeppelin mechanics!

Take it on the chin if they say you need to re-train entirely and get out there to find the cheapest smartest way to do this. The web is a good source of free online tuition and again your friends and network can help you here too. Seek out the one's that have current skills or work with others who have them.

Consider working for FREE for a short introductory period.

It would be a great advantage to you to find work as an intern or assistant with a company who have, and use, the key skills you need to learn or develop! Remember there has to be value on both sides or it won't work. So you need to have something to offer them. You will short circuit many of their reticence and objections if you offer your time and experience for FREE! In return you get some valuable training or much needed exposure to a new skill, methodology or application.

Clearly working for nothing is a short term activity and you cannot allow it to continue for long. You need an income and you have only a small window of opportunity before you go broke. So, once you are in-situ, you need to learn as much as you can, gaining real hands-on experience and as quickly as possible. Poverty is a great motivator!

You never know what might come from this and it will keep your morale high, maintain your social interaction and extend your network. 3 very important considerations but beware of abusive persons that will try to exploit your position.

Social Networking helps
Don't hesitate to put your professional face online. Make sure you are on LinkedIn and your profile is up to date. Your online presence is often the first place potential employers will look. If run correctly, your social network could be that extra boost your résumé needs. Exercise caution and restraint, because, depending on the content, it could also be detrimental. Post articles you've written or details of a project you're particularly proud of, not the pictures of you mooning your mates on last year's trip to Cancun.

Consider Contract work and Consulting
Although you might be leaving a full-time, "permanent" position, don't rule out the idea of consulting. Many workers overlook the option of consulting because they don't like the relative insecurity and the idea of impermanence.

The use of Contractors and contracting
In fact, many cautious employers now are showing great caution when taking on new staff. They don't want the long term commitment in such a dynamic marketplace. They want to be able to grow and shrink as the work dictates. They do this by using contractors and they manage the uptake of contractors by issuing short 3 month contracts in the first instance, with the 'potential' to extend.

From my experience it will take you 6 weeks to settle into a new company and it will be 3 months before you will become truly confident and start taking the initiative in that position. From your side, you are set to go. From the employers side, they know who they are dealing with and they have assessed your worth. They can now decide whether to 'extend' you for a more agreeable period of time e.g. 6 months or 1 year, to completely 'domesticate you by offering a Permanent contract or to 'release' you back into the Wild.

If you dismiss contracting as an option, you could be slamming the door on your career.

Once you are established as a contractor, it is not uncommon to stay with a company for 2 years or more. Years of relative security and certainty, the same pay and benefits. Remember that a short consulting assessment is often the only way into and organisation but could potentially lead to a (semi-)permanent position.

Go Girl Power!

Cultivate Suppleness and Flexibility

Consulting also has a number of benefits you won't find with a permanent position. It provides a vehicle for flexibility. That may be the flexibility to spend more time with your family, or open up that business of your dreams. Consulting usually generates a higher salary than a permanent position. It can also stimulate you business sense in a way that a more sedintary position does not.

Just say 'No!'
As an independent consultant, you always have the option to say 'No' to a project if it doesn't appeal to you. Can you imagine saying "no thanks" to your last manager? (out loud). There are a huge array of jobs available to contractors. This makes it possible to not only choose where and when you work, but what you're doing and how you do it.

The Postman earns more than you do, now
A contract or temporary position with a company keeps some income flowing while you search for a more permanent and satisfying position. It could be the key to keeping you and your family fed and healthy.

Benefits? What Benefits?
Do remember that temporary workers and contractors do not have access to the same benefits within organisations. No health insurance, no pensions, no sick pay, short notification of termination periods, etc. So, its not all plain sailing and lots of money but its something you will know in advance and can deal with. Remember what your Grannie told you, save up and put aside something for the leaner days.

With grim determination and a willingness to grow and open yourself up to new experiences, you will not be a Statistic very long!

Downsizing Checklist

The Layoff Checklist

Staff movement and layoffs are a fact of life, whether you are in a large or a small organization. The downsizing process is never simple and often unpleasant, especially if it is badly planned, managed and implemented. Your local HR department will have the most relevant experience and knowledge on how to do this, in the most professional and humane manner. The short checklist provided here is more concerned about the methodology rather than the reasons behind it. The checklist covers the main topics that every manager should know and understand prior to terminating one or more employee(s).

The CHECKLIST

□ If its possible, communicate with and prepare your staff for the possibility of layoffs in advance. No termination should come as a complete surprise to an employee under any circumstances. They need time to consider or imagine the possibility.

□ Put your rationale in writing as well as explaining your decisions to upper management if necessary. Puting it in writing provides clarity and negates ambiguity and doubt.

□ On a practical level, establish a detailed plan for handling the workload after the layoffs have occurred, given that there will often be a period of low morale and disruptions.

□ Make a list of key files any employee may have, and arrange for their transfer.

□ HR are your touchstone, so check with them often. There will be defined procedures to follow; get the paperwork right, collect keys and badges, etc. HR people can give you helpful advice on dealing with the more emotional aspects of a layoff, and often provide supportive techniques for delivering the bad news and dealing with the reaction..

□ Keep everything on a safe legal footing. There may be specific things that you must, or must not, say. It is a time when you can easily leave yourself and the company open to litigation.

□ Put in place IT & Security policies to cancel access privileges immediately (within a few seconds) after terminating anyone. Angry or disgruntled ex-employees can and will, do significant damage to your systems the moment they return to their desks. Do not underestimate the impact of this. There are many documented cases of this happening.

□ Establish, in advance with all parties concerned, what will happen before, during and after the termination interview, e.g. who will escort employees back to their work space, how long the laid-off employees will have to gather personal belongings and who will collect keys and badges, etc. Normally security will play a role here. They are less 'involved' with the staff than the management and can be very professional and objective.

□ Managing the guilt and emotional reactions of the “survivors” as early as possible, is essential. Arrange to meet with them to communicate what has happened and why. Then explain the new work plans, address their fears and answer their questions, no matter how difficult

□ Do not forget your own feelings and emotions in all this and seek some good advice from your HR department. They will be best placed to tell you how to deal with what is happening. You are also one of the 'survivors' and you will be expected to do more with less, once the downsizing operation is complete.

Reduced Security

An urgent demand for talent in several areas is eclipsing broad, knee-jerk reactions to greatly reduce budgets and cut staffing levels, projects and fixed asset purchases, without thinking carefully about the consequences and future requirements.

Undeniably employers made mistakes in past downturns, huge miscalculations founded in the white hot heat of cost-cutting that wounded them badly later on. It limited their ability to respond quickly and when the smoke cleared and the rebuilding started, they were left floundering.

It just shows how little IT management has learned since last time. Managers have not learned the lesson that it's not just about cutting spending, it's about managing the risks and being smart within their spending limitations. Know your boundaries and work within them.

One of the worst instancies if this in the IT security field. Current economic conditions are having a negative impact on the majority of security budgets. Many companies have initiated a hiring freeze or staff reduction exercise, necessary measures due to the financial crisis.

Security-decision makers in over 100 companies have been asked about their spending plans for the coming year and to gauge the impact current economic conditions are having on budgets. Of 159 respondents, 64 percent indicted that the economy was having a negative impact on security spending. Another 19 percent said the economy currently had no impact. Just 6 percent said the crisis was having a positive impact on their organization's security budget.

Security budgets will decrease for 35 percent of respondents and remain the same for 42 percent. Just 23 percent thought spending would increase in the coming year. Those numbers are a switch from last year, when more companies expected to increase security spending. In 2008, 38 percent of companies planned to increase their security budget and just 24 percent expected to see a decrease in spending.

One firm is actually in the minority and plans to spend more on security in the coming 12 months. "We are increasing from previous years. I would have to say the increase is around regulatory issues as well as general responsible security program expansion."

Security spending is often driven by compliance and policy decisions. This falls in line with what other companies also said, with a majority indicating that policy and compliance are the main justifications for security spending.

Security decision-makers were asked if they planned to increase or decrease spending in the following areas: Business Continuity/disaster recovery, data loss prevention, identity management, compliance and regulations, outsourced security systems, physical security, policy and risk management, and staff.

In all but one category, more than half of respondents expected spending to remain at similar levels.

However, when it comes to spending on staff, 41 percent expect to see a decrease in spending. Close to 60 percent have either implemented, or plan to implement, a hiring freeze.

Additionally, 35 percent of companies asked, indicated they have had to go beyond a hiring freeze and have actually reduced security staff, or plan to reduce headcount in the next 6 months. It will be interesting how this affects security in the coming months and whether we will see more outsourcing of protective measures. A dangerous path to walk and one that can only increase the threat to organisations.

Let's hope we soon see an end to these 'interesting times'

Getting on top - Dominate your Credit Risk

Until recently, when debt became more expensive and harder to come by, companies generally had a blasé attitude toward managing their trade-credit risk. Most corporations, big and small, don't have credit risk procedures any more sophisticated than the sub prime lenders did. In which case you are flying in dangerous territory with your defenses down.

A simple tip but one that's been largely ignored until recently: Be more wary before extending credit to new customers. Make them prove their creditworthiness. Currently, companies take more a of shy unassuming approach to trade credit by quickly granting it to every new client that comes across their threshold. Once aboard they hope for the best and follow the client's payment performance over time.

Companies too often get into the habit of not asking for any financial information from their customers in favor of speeding up a much coveted deal. Suppliers have been doling out credit based on what little information may be available on their privately held clients, despite the fact that private firms have a higher rate of bad debt. Even after a credit account has been granted, the supplying company may shy away from asking for financial data because they don't want to offend a brand-new client. Clearly the banks have a part to play in all this because they too have been willing to extend credit lines far beyond reasonable doubt.

Companies should ask for customer and bank references up front. Although, that information may be biased and unreliable because of the struggling financial institutions. Will the bank and lenders be there in the long term for their customer? Are they going to provide financing or will they make a quick exit and leave the company with a liquidity shortfall, which may or may not cause the demise of the company? Are the financial institutes responsible for the ongoing viability of their clients, i.e. the corporate companies. What support and backup can they provide a struggling company when they themselves are in difficulty. These and many more, are all questions vendors need to ask themselves when looking over a customer's bank information.

Companies should request that all customers, new and old to fill out a one-page credit profile every year. The sheet should include the company's cash position and the most up-to-date contact information. A type of credit probe which may or may not provide the correct level of information in the right format, in a timely manner. This will lead to more overhead in the accountancy dept or with the business analysts, but if addressed properly, it may provide early warning of difficulties.

If there is any good news to be had during this economic downturn, it's that everyone is in the same boat. Your customers are asking their customers for more financial information. It's now become perfectly acceptable to ask about a client's financial status because everyone is being scrutinized by every supplier. Its a big global circle of accountants, checking each others assets.

If it's impractical to demand financial information up-front, then come up with a triggering number for when your company will demand it. A simple threshold or framework will suffice. If clients cross the established and agreed amount, then they must provide their trade creditors with financial statements to validate their credit. The type and level of the threshold can vary depending on client, industry, item value, uniqueness, development costs, credit exposure, etc. Its not a numerical value, its a way of thinking about and controlling your risk exposure.

Another way to improve your credit /risk management is to conduct a detailed assessment and calculate each customer's probability of default. With such precise knowledge you can price your services accordingly, and by showing your client the calculations, you can easily justify a premium rate. Cash has always been king and currently it is even more critical to companies health and financial welfare, but many companies have no idea who they're selling to, never mind who owns the company or their cash position. Its never been more critical to know your customer.

Moreover, suppliers can no longer rely on traditionally held views that big-name companies are safe from sudden and dire financial problems even if they don't have strong cash flow. Many of these companies have lived on extended credit lines for years and are not asset rich. Other companies can have negative cash flow and positive net worth. They're sitting on land or occupy buildings that no one's willing to buy. If their credit is pulled and they end up going bankrupt, the asset value won't cover the debts.

Experts also suggest sales and credit departments improve their communications between salespeople and the collections side. Your salespeople are trying to maintain the vendor /customer relationship at the same time as maximising their commission payments. This is a tightrope, and is a very dangerous situation for the company to ignore. It must be very, very tightly controlled. Don't allow salespeople to grant extended payment terms, without justification and authorisation, before checking in with their credit counterparts. Companies should use these negotiations to get more financial information out of their privately held clients and reprice future services if possible.

Moreover, salespeople may be able to offer the credit department more insight into a customer's financial situation. Therefore it is imperative that they have the influence, motivation and the time to actually get involved in credit and collections questions. Its a team effort and everyone better be on the team or the game is over.