As we close out a very interesting, unique, and challenging year for many Americans, I thought it was appropriate to post another update on my reflections on “The American Dream”. Last fall, I outlined a set of expectations that I had when I launched my professional career several decades ago in my first posting on this topic. At that time I had the impression that:
- I could submit a resume and cover letter for an open position and someone would contact me on a timely basis if they believe I was a qualified candidate and were interested in scheduling an interview with me.
- I would have an opportunity to enter into a mutually beneficial “contract with Corporate America”.
- The investments I would eventually make in real estate would ultimately be my golden nest egg for my retirement.
- My children would be able to embark on their own careers in their early 20s after earning a college degree.
- I could look forward to transitioning from working full-time into retirement and recreation when I reached my mid to late-60s.
During the past year I have been contemplating this subject and have had to reset my expectations regarding career opportunities for professionals with decades of valuable business experience. As I argued in the first two postings, “The American Dream (Revisited): Reflections on Labor Day 2011” and The American Dream (Revisited): Part II; I think that is imperative that each of us take control over our destiny from a career perspective.
Reclaim control of your destiny
While the jobs outlook for 2012 appears to show some dim signs of improvement; the uncertainties of the US and European economies continues to present us with considerable uncertainly. I have already presented my case for entrepreneurial business opportunities in my previous posts and feel even more convinced at this time that entrepreneurs and small businesses will provide the requisite leadership for stronger economic times. As I have stated in the past…
NOW IS THE TIME to take control of your own professional career destiny. Embrace the reality that you do have multiple career options and that you are ultimately empowered and accountable to make your own career decisions. While you are waiting for the phone to ring or for an email from a recruiter or hiring manager – I challenge you investigate options to fulfill your own dreams and aspirations through launching your own entrepreneurial business venture.
NOW IS THE TIME to evaluate launching your own new business; engaging in an early stage business; or investigating launching a proven business with a franchise, distributorship, affiliate, or licensing business model. Recall that there are numerous examples of successful companies today that were launched during a recession including Apple, Microsoft, HP, Trader Joe’s, Disney, CNN, FedEx, IBM, and GE to name a handful. Each of these corporations started as a small business.
Included below are several dozen recent references as evidence of the new realities that executives are facing in the current decade.
Reality Check on the American Workplace in 2011
Unemployment and Underemployment in the US
· “The U.S. unemployment rate took a big tumble in November, from 9 percent to 8.6 percent, according to the government's monthly jobs data. Still, it's probably too soon pop the champagne corks. A combination of forces caused the big drop, some good and some bad. … Diane Swonk, chief economist at Mesirow Financial in Chicago, says the president might be playing it down because there's another reason the rate fell so much: 315,000 people gave up looking for work.” 2
· Corporate financial executives aren’t filled with Christmas cheer about the state of the economy and remain Scrooge-like when it comes to hiring and investment. So reports the American Institute of Certified Public Accountants in its quarterly “Economic Outlook Survey” of chief financial officers and other corporate finance executives…. With a mediocre score (50 indicates neutral), the AICPA concludes that the news isn’t really that good for people seeking work. “We saw improvements in every category of the index, including sentiment about prospects for the U.S. economy,” said Carol Scott, AICPA vice president for business, industry and government, in a statement. “However, serious concerns about the business climate remain, reflected by continued reticence for new investment and hiring,” she added…. “Fifty percent said their organizations do not plan to return to pre-recession employment levels for at least 12 months, and a third do not expect to reach that level again in the foreseeable future,” the AICPA said. “Yet one in four respondents reported their companies have too few employees, but remain reluctant to hire because of economic uncertainty.” 3
· “Citigroup will lay off roughly 4,500 employees over the next few months, CEO Vikram Pandit said Tuesday, as Wall Street continues to bleed jobs amid tough economic times.” 4
· “The financial services industry has lost more than 200,000 jobs globally this year, according to data compiled by Bloomberg. Bank of America alone has announced plans to cut 30,000 employees over the next several years.” 4
· “Drugmaker AstraZeneca will cut roughly 24% of its U.S. sales force in an effort to curb costs, part of a company-wide restructuring announced in 2010. The British company said Wednesday that it will cut 1,150 employees, including sales representatives and managers. It employs 14,000 people in North America, with most of those working in the United States. Wednesday's announced layoffs are in addition to 400 cuts in AstraZeneca's (AZN) U.S. commercial business laid out in October.” 5
· “McAfee Inc. has laid off approximately 250 employees, or 3 percent of its work force, according to a Thomson Reuters story on Tuesday.” 6
· “[The good news:] The unemployment rate fell to 8.6 percent in November, the government said last week, down from 9 percent the previous month. That's the lowest rate in two and a half years. [The bad news:] Still, the unemployment rate dropped last month in part because more people gave up looking for work. Once the unemployed stop looking for jobs and drop out of the work force, they are no longer counted as unemployed.” 7
· “The median forecast of economists is for scarcely any decrease in the unemployment rate over the next two years.” 9
· “Remember, the unemployment rate is calculated by adding up all the people who tell government surveyors that they can’t find work and dividing it by all the people in the labor force—those either employed or actively looking. So if people give up searching, they’re no longer counted as unemployed, and the rate falls. In November about two-thirds of the improvement in the jobless rate came from people dropping out of the labor force and thus out of the calculation of the unemployed. Only one-third was because of actual job creation.” 9
· “Two-thirds of chief executives of the largest U.S. companies say they don't plan to increase hiring or will cut staff in the next six months, mainly because of sluggish growth in the United States and financial turmoil in Europe. The Business Roundtable said Wednesday that about one-third of its member CEOs expect to add employees and spend more on large equipment in the next six months. That's little changed from three months ago. More than 40% plan to keep their work forces steady. About a quarter expect to cut jobs.” 11
· “Nearly 8.8 million workers in America's 100 major metropolitan areas are currently unemployed. That's an increase of almost 5 million people from the lowest levels of unemployment recorded in those same metros during the past decade, according to an On Numbers analysis of U.S. Bureau of Labor Statistics data. The study compared raw unemployment totals for each October since 2001. Adding the lowest figures for the 100 metros yields a total of 3.85 million unemployed workers. The present number is 128 percent higher.” 22
· “Just nine states and the District of Columbia managed to add jobs during the past half-decade. The other 41 states currently have smaller employment bases than they did at the end of 2006, according to an On Numbers breakdown of data from the U.S. Bureau of Labor Statistics. The study predates the recession, which officially began in December 2007.” 25
· “Fewer than one quarter of hiring managers plan to take on new employees in 2012, although small businesses are more inclined to hire in 2012 versus last year, a new hiring survey forecast from job site CareerBuilder finds. Of the more than 3,000 human resource and hiring professionals surveyed, 23 percent said they’ll add full-time, permanent staff in 2012, down a notch from the 24 percent who said they planned to do so in 2011, according to CareerBuilder’s 2012 U.S. Job Forecast released today. Seven percent expect to slash head count in 2012, the same as for 2011, and an improvement from 9 percent for 2010. Fifty-nine percent anticipate no change in their staff levels, while 11 percent reported being unsure.” 30
· “Morgan Stanley will slash 580 jobs in New York as part of a broader wave of layoffs underway at the bank, according to a public filing. Earlier this month, Morgan Stanley said it would cut 1,600 jobs, or 2.6 percent of its work force, by the first quarter of 2012. The bank plans to spread the round of reductions across all divisions, including investment banking and trading. The layoffs at Morgan Stanley are the latest round of severe cutbacks on Wall Street, which has suffered a year of humbling returns and enormous cost-cutting. Citigroup recently announced it would shed 4,500 jobs. Bank of America and Goldman Sachs have also begun carrying out major staff reductions. In June, Goldman told the New York Department of Labor that it would layoff 230 New York workers through March 2012.” 32
· “3M Co. offered early retirement to about 4,900 U.S. employees to cut costs as electronics-related sales slow, marking the company’s first workforce reduction since 2009. The St. Paul, Minnesota-based maker of Scotch-Brite sponges, Nexcare thermometers and Novec electronic coatings, expects about 1,000 workers to accept the offer, said Jacqueline Berry, a 3M spokeswoman. … The company cut its workforce by about 5,800 people in 2008 and 2009 amid the deepest U.S. recession since the 1930s. An additional 700 workers left under an early-retirement offer in 2009, Berry said.” 33
· “U.S. agribusiness hulk Cargill Incsaid it would let go of 2,000 of the employees globally, citing the single after another diseased tellurian economy. Minneapolis-based Cargill, the single of the world’s largest secretly hold corporations, pronounced the pursuit cuts start 1.5 percent of the workforce of 138,000 employees located in 63 countries as well as will take place over the subsequent 6 months.” 34
Living the American Dream with the Contract with Corporate America (Revisited)
· “Worse for workers, Silvia says, companies are getting better at expanding output without hiring. “We’re adding a lot more capital than labor to produce, and we’re changing what we produce,” he says. “That’s a challenge for our society”. 9
· “It’s that time of year. The stockings are hung by the chimney with care, and year-end reviews salary negotiations are upon us at work. But with many workplaces facing the prospect of new salary freezes for existing employees, the prospects of significant raises are once again gloomy for 2012. What’s more, many workers feel uneasy making big-ticket demands of management in an environment still recovering from layoffs, meaning they leave reviews feeling uncompensated and even dejected. So much for holiday spirit!” 28
Living the American Dream by Finding the right Corporate Job (Revisited)
· “Despite high unemployment rates, an estimated 21 million Americans are planning to change jobs in the next twelve months, according to a new survey conducted by learning and talent management software provider Cornerstone OnDemand (NASDAQ: CSOD) with Harris Interactive. When the cost of employee turnover can be up to 250 percent of the annual salary per exiting employee, U.S. employers who are unprepared can expect a steep price tag of an estimated $2 trillion on employee churn in 2012.” 23
· “A Careerbuilder .. survey of hiring executives finds 23 percent of U.S. companies plan to hire full-time employees in 2012, little changed from its 2011 forecast. … Companies also reported an increase in voluntary turnover in 2011, with 34 percent saying employees left to pursue other opportunities, seeking higher salaries and a lighter workload. Thirty percent of employers say they lost top performers to other organizations in 2011 and 43 percent are concerned top talent may jump ship in the New Year.” 29
Living the American Dream through Home Ownership (Revisited)
· “Household wealth in the U.S. fell from July through September for a second straight quarter as the European debt crisis depressed stocks and home values decreased.” 8
· ”Here are the 13 worst home markets in the U.S. based on the percentage of decline in home value for 2011: Las Vegas, NV: -15.2%; Boise, ID: -13.4%; Phoenix, AZ: -13.0%; Tucson, AZ: -11.1%; Orlando: -10.9%; Fresno, CA: -9.9%; Sacramento: -9.3%; Bakersfield, CA: -8.5%; Atlanta, GA: -8.5%; West Palm Beach, FL: -8.5%; Stockton, CA: -8.2%; Jacksonville, FL: -7.7%; Tacoma, WA: -7.4%.” 16
· “Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year - and plan to demolish 20,000 more - rather than let the blight spread and render nearby homes worthless. Chances are the home you're in isn't worth what it used to be. You may not have indulged in the real estate bubble with its liar's loans and Wall Street greed, but you were stuck with the bill. Home values have dropped so far, so fast, that nearly 25 percent of mortgage holders today owe more than their house is worth. And with unemployment so high, so long, many face foreclosure. If you thought your home value couldn't drop any more, have a look up and down the block. You might say, "There goes the neighborhood." The new threat from the great recession is the sudden surge in the number of abandoned houses. Vacant homes have become so ruinous to some neighborhoods that one city, Cleveland, decided it had to find a solution.” 20
· “Americans bought slightly more new homes in November, but 2011 will likely end up as the worst year for sales in history. The Commerce Department says new-home sales rose 1.6 percent last month to a seasonally adjusted annual rate of 315,000. That's less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market. It's also below the 323,000 homes sold last year — the worst year for sales on records dating back to 1963. New homes account for just a fraction of the housing market, but they have a big impact on the economy. Each new home built creates roughly three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.” 21
Living the American Dream through Retirement (Revisited)
· “An increasing number of people ages 50 and up are headed to community college — 388,000 were enrolled nationwide in fall 2009, the most recent data available from the American Association of Community Colleges (AACC). That was up 6% from 2007 and more than 12% from 2005. Nationwide, people over the age of 50 typically make up between 5%-6% of community college enrollment, according to AACC figures.” 13
· “For many Baby Boomers and the generations that follow, 65 won't be retirement age. It will just be another year of work for those who have a job, and a diminished lifestyle for many of those who don't. Even now, the oldest members of the Boomer generation (those born in the 19-year span of 1946-64) can't collect their full Social Security benefit until they're 66; the cutoff for full benefits was bumped up from 65 as a result of the last attempt to fix Social Security, in 1999. Proposals to cut the federal deficit eventually could push the age for full benefits to 69.” 14
· “At 100, Dr. Fred Goldman still makes house calls. ‘If they're sick and can't leave home,’ he said, ‘I go to see them.’ … ‘Work is life,’ he said. ‘I work on demand. … Fortunately, the demand exists. I feel I can still be helpful to people.’ He has not changed his approach to caring for his patients since he entered private practice in 1946.” 15
· “The number of older Americans who choose to work later and later in life is growing. According to the U.S. Bureau of Labor Statistics, 1.2 million Americans age 75 or older were working last year, up from 787,000 in 2001.” 24
Reality Check on the Prospective Business Opportunities in 2011
Importance of Entrepreneurs and Small and Medium-sized Enterprises in the US
· “The young may have good ideas, but there is no substitute for experience. You aren’t born with the management, marketing and finance skills necessary to turn ideas into successful ventures. … We learned that the average and median age of successful founders was 39. Twice as many founders were older than 50 as were younger than 25. And there were twice as many over 60 as under 20.” 1
· “In less than a decade, as employees “bring their own technology” with them, the workplace will shift to wherever an employee is located, according to initial findings from CoreNet Global’s comprehensive and futuristic look at the workplace, Corporate Real Estate 2020. The wide-ranging study sheds light on how technology is radically changing the nature of work and even transcending science fiction.” 10
· “A big reason for the fresh optimism is a pickup in small-business hiring. In November, small-firm owners increased employment slightly for the first time in five months, according to a survey by the National Federation of Independent Business (NFIB). Small businesses also accounted for more than half of the 206,000 jump in private employment last month reported by payroll processor ADP. Many of those firms are start-ups, says Diane Swonk, chief economist of Mesirow Financial.” 12
· “An overwhelming 92% of executives think that business travel is failing to improve, with almost half saying it is getting worse or even much worse, according to a survey by ON24, a web casting and virtual event firm. … ‘In today’s digital age, professionals increasingly prefer virtual events and webcasts to traveling to in-person events. Virtual event attendees can consume content conveniently and efficiently wherever they are — at their desks, on their laptops or with any mobile device. With virtual communication, there are no logistical barriers interfering with getting the information you need.’” 17
· “In the past three years, the ability and willingness of Americans to move across town or to another state have fallen to their lowest level in more than half a century. An NPR/Kaiser Family Foundation survey examined mobility among the long-term unemployed and underemployed. Of those two groups combined, 40 percent said they would be willing to move to another state to find a job.” 18
· “The Startup America Partnership, a private initiative geared to encourage the formation of fast-growing new businesses, is kicking into high gear. The group, chaired by AOL founder Steve Case and led by CEO Scott Case (no relation), held the first meeting of its all-star board last week and announced it had garnered the promises of services worth nearly $1.2 billion for emerging businesses from more established companies. … ‘The next big push is to make the startups aware that the partnership exists and has resources to help them,” he said. “We have a goal of getting to 100,000 startups in a very rapid pace.’” 19
· “After three years of Scrooge-like underwriting following 2008's financial crisis, banks have turned on the spigot, boosting lending at annual rates as high as 8.2% since July, according to Federal Reserve statistics. Lending had fallen from mid-2008 through this year's second quarter, deepening what became the worst recession since the Great Depression. The data seem to allay fears that making banks keep more capital on their books as a cushion against future downturns and loan losses will take away the cash flow businesses need to keep the recovery moving. Among the reasons: The economy is improving, while smaller banks have positioned themselves to pick up slack left as bigger banks remain cautious, says Stuart Hoffman, chief economist at Pittsburgh-based PNC Financial.” 26
· “The sharpest improvement has come in business lending, raising hopes that it can spur increased capital investment, the seed corn of business expansions. Commercial and industrial loans grew at an annualized pace of more than 20% in August and more than 15% in October, the best growth since early 2008.” 26
· “I do know one thing for sure: it isn’t the big companies that create the jobs or the revolutionary technology innovations: it is startups. ” 27
· “Kauffman Foundation has done extensive research on job creation. Kauffman Senior Fellow Tim Kane analyzed a new data set from the U.S. government, called Business Dynamics Statistics, which provides details about the age and employment of businesses started in the U.S. since 1977. What this showed was that startups aren’t just an important contributor to job growth: they’re the only thing. Without startups, there would be no net job growth in the U.S. economy. From 1977 to 2005, existing companies were net job destroyers, losing 1 million net jobs per year. In contrast, new businesses in their first year added an average of 3 million jobs annually. When analyzed by company age, the data are even more startling. Gross job creation at startups averaged more than 3 million jobs per year during 1992–2005, four times as high as any other yearly age group. Existing firms in all year groups have gross job losses that are larger than gross job gains.” 27
· “If there was a bright note, it was with small businesses, which had more swagger for next year when it came to hiring new employees and retaining those already on staff. Among businesses with 50 or fewer employees, 16 percent plan to add staff, an increase from 15 percent that said the same last year. For businesses with up to 250 employees, 20 percent planned to add full-time, permanent staff, up from 19 percent last year. For those with 500 or fewer employees, 21 percent expected to add more in 2012, which was the same as last year, but those reducing head count fell from 6 percent to 4 percent.” 30
· “Entrepreneurship is a serious career path right now” 31
· Characteristics of entrepreneurs: “(1) Look for ways to make a difference; (2) Follow that overwhelming desire to take action; (3) Exert your influence as much as possible; (4) Help other would-be entrepreneurs.” 35
· “Small business remains critical to the economy with the progress and success of entrepreneurs still a keenly watched metric. With the ongoing economic recovery and health of the current economy at stake, the health of small businesses will remain important for the foreseeable future” 36
Franchise Business Opportunities
· “Nurse Next Door, a Canadian home health care provider, is fielding 100 inquiries a month from prospective franchisees in the USA, up from 20 last spring.” 12
· “Franchised businesses provide about the same number of jobs in the U.S. as the manufacturers of durable goods, such as computers, industrial equipment, cars, trucks, and planes. More than 825,000 franchise businesses support nearly 18 million jobs and generate $2.1 trillion of economic output to the U.S. economy.” 37
Sources
3 Bad news for job seekers: Companies aren't looking to hire, survey says, Rick Smith, WRAL Tech Wire, 06-Dec-2011
8 Household Wealth in U.S. Falls for Second Straight Quarter, Timothy Homan, Bloomberg Businessweek, 08-Dec-2011
9 The Unemployment Rate Drops, but Economists Aren't Smiling, Peter Coy, Bloomberg Businessweek, 07-Dec-2011
11 Survey: CEOs foresee no hiring pickup next 6 months, Christopher Rugaber, Associated Press, 14-Dec-2011
14 Working past 65: Boomers face job challenges in senior years, John Waggoner, USA Today, 09-Dec-2011
22 5 million added to unemployment rolls in major markets, G. Scott Thomas, The Business Journals, 23-Dec-2011
23 Cornerstone OnDemand Research Suggests 21 million Americans Are Planning to Change Jobs in 2012, Cornerstone OnDemand Research, 02-Dec-2011
25 Nine states have added jobs since 2006, while 41 have slipped, Scott Thomas, The Business Journals, 26-Dec-2011
33 3M Offers Retirement to 4,900 in First U.S. Cut Since 2009, Thomas Black, Bloomberg Businessweek, 14-Dec-2011
35 4 Critical Traits of an Entrepreneur, Glen Bickenstaff; Inc. Magazine, 16-Dec-2011
36 Small Business Remains Critical, Small Business News, 28-Dec-2011
37 New Research Reports Will Forecast Growth of Franchising Industry, International Franchise Association, Dec-2011
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