Category Archives: Employment

Executives think about the economy

This continually updated interactive tracks how executives around the world have viewed economic conditions and the economic prospects of their companies, and how those views have differed over time and across industries, regions, and types of company.

Every quarter since early 2004, McKinsey has asked executives from around the world about their expectations for the global economy, national economies, and their own organizations. Since September 2008, as these topics have grown in urgency, we have added additional questions, including some on customer demand and company profits.

This interactive feature will allow you to explore how different regions, industries, and types of companies have been affected by recent changes in economic conditions, and what executives expect to see in the future.

The development of automation, enabled by technologies including robotics and artificial intelligence, brings the promise of higher productivity, increased efficiencies, safety, and convenience. But it also raises difficult questions about the broader impact on jobs, skills, wages, and the nature of work itself. Many activities that workers carry out today could be automated. Job-matching sites such as LinkedIn and Monster are changing and expanding the ways individuals look for work and companies identify and recruit talent. Independent workers are increasingly choosing to offer their services on digital platforms such as Upwork, Uber, and Etsy; in the process, they are challenging conventional ideas about how and where work is undertaken.

For policy makers, business leaders, and workers themselves, these shifts create considerable uncertainty alongside the potential benefits. This briefing note aims to provide a fact base to stimulate discussion. It highlights recent findings from research by the McKinsey Global Institute and others on technology, jobs, and the future of work.

Green energy jobs

The latest failure of liberal employment remedies should encourage the oil and gas industry.

According to liberal theory, governments create jobs by spending money. History suggests otherwise.

When governments spend money to create jobs they move funds and workers into activities with limited or no ability to create wealth. Whatever economic goodness comes about proves unsustainable.

Governments must raise taxes to pay for the increased spending. Businesses, anticipating the new burden, trim spending. Then employment suffers as economic activity slows, and governments face new fiscal pressures.

While governments can employ many people, they can’t create jobs. New jobs require new wealth, which requires profits. Governments don’t generate profits. They employ people with money taxed away from profitable activities in the private sector. They don’t expand the workforce; they nationalize part of it.

In the latest demonstration of these effects, stimulus spending by the US government has failed spectacularly to create jobs.

As Rea S. Hederman Jr. and James Sherk of the Heritage Foundation point out in a Sept. 4 report, new job numbers refute promises by the Obama administration that spending would halt unemployment and lead to labor-market recovery by the third quarter.

According to the Bureau of Labor Statistics, the unemployment rate rose to 9.7% in August from 9.4% in July—well above the administration’s prediction of an 8% peak. The number of workers employed fell by 216,000.

BLS data further debunk recent administration claims about 500,000-1 million jobs created by stimulus spending. In fact, the share of the workforce represented by newly hired workers fell to 2.9% in June from 3.2% when Congress approved the spending spree in February, which was down from 3.8% before the recession began.

These failures do more than discredit liberal assumptions about governments and job creation. They also discolor those green jobs the administration touts in support of its state-centered energy program.

Revitalizing growth in Europe

After receiving several hundred essay submissions on how to pump life into Europe’s economy, the judges awarded prizes in a McKinsey Global Institute contest.

What reforms does Europe need to restore dynamism to its economy? How could it implement them in a way that would be palatable to the public and politicians alike? The McKinsey Global Institute (MGI) report A window of opportunity for Europe, published in 2015, included a targeted set of measures to answer that first question, about the what. To address the complex issues of how, we decided to throw the second question open to a much larger global audience by crowdsourcing the answer.

The result was an essay contest: the MGI Opportunity for Europe. Launched in March 2016, it offered a first prize of €60,000 for ideas to translate economic theory into political measures that would both appeal to voters and help restore Europe’s pep. The contest also offered a €25,000 prize for the best submission by an author under the age of 30. Jean-Claude Juncker, president of the European Commission, agreed to serve as contest patron.

By our deadline, July 31, we had received 401 submissions from all over the world. Just under half of them came from outside Europe, and entries by authors under 30 years of age were not only plentiful but also among the best. Overall, the essays touch on a wide range of subjects. Whatever the diagnosis, a common refrain is the belief that Europe currently lacks an imaginative vision or a clear sense of purpose, that its leaders can seem aloof from the daily concerns of ordinary people, and that in a changing world the very idea of Europe no longer inspires or comforts ordinary citizens. “Europeans don’t fear change; they just fear being left behind by it,” as one essayist put it.

Interview Questions That You Need to Know

There is much advice on how to deal with a lowball offer from a prospective employer. We talk about how to avoid being on the receiving end of a lowball offer, and how to negotiate your way out of one. But what we don’t talk about all that often is how candidates sometimes lowball themselves. This is a tactic often borne out of desperation, and one that should be avoided at all costs.

When unemployment protracts and unemployment benefits exhaust, it can be tempting to reduce your asking price in the hope of getting an offer. It may seem counterintuitive, but often, candidates who lowball themselves wind up unemployed for longer than those who stick to their guns. There are a few reasons for this:

It is suspicious. If you were shopping for a house in a neighborhood where all the homes were selling for $220K, and your realtor took you to see one that was listed for $160K, you would immediately wonder what was wrong with it. It might appear to be just fine, but you would wonder if there was an underground oil tank, a crumbling foundation, or if its well water was contaminated. You probably wouldn’t think, “That’s a bargain! I should jump on it now!” It’s the same when candidates present themselves at a price that is below market. The buyer—in this case, the hiring manager—will wonder what’s wrong.

A willingness to accept a below-market salary or a position that is below your experience level may send the message that you lack ambition. Fair or not, hiring managers sit in judgment of candidates every day. Let’s say that you are a project manager, who earned $90K in your last position. If you’re interviewing for a project coordinator role at $60K, a few things are going to go through the hiring manager’s mind:

Why would this candidate be looking to take a step back?

Can she not handle the responsibilities of the higher level job, and in that case, is she viable as a longer-term hire?

What Are Your Salary Expectations

Answering this question too specifically can lose you a lot of money, or an opportunity. Naming a figure that’s too low can result in a lower offer, or even loss of the opportunity if your answer creates doubt about your value. A figure that’s too high can immediately disqualify you.

This is one of the few questions where formulaic, memorized verbiage may be the best approach.

First, as soon as you apply for a job make sure you understand the range of typical salaries for the position and geographic area, because this may be one of the first questions you will be asked in a phone screen, which could happen at any time.

You can research salaries via websites like Salary, Payscale, Glassdoor, Indeed, CareerOneStop, JobSearchIntelligence, a simple Google search, and sometimes via word of mouth. Use more than one source, since a broader range may give you more negotiating flexibility.

When the question is asked, respond with “Can you tell me what range you have budgeted for the position?”

If they tell you a range, say something like, “That seems like a reasonable ballpark. I’m sure once we agree I’m the right person for the job, we’ll be able to agree on a salary that’s fair.”

If they won’t state their range and put the question back onto you, say something like, “I’ve done some research and I’m seeing salaries anywhere from X to Y. I’m sure once we agree I’m the right person for the job we’ll be able to agree on a salary that’s fair.”

More Help with Common Interview Questions

Earlier posts in this series explored the common interview questions “What are your weaknesses?”, “Where do you see yourself in five years?”, “Why did you leave your job?” and “What’s the biggest mistake you’ve made on the job?”

The demographic challenge in cities

Cities have powered the world economy for centuries. Large cities generate about 75 percent of global GDP today and will generate 86 percent of worldwide GDP growth between 2015 and 2030. Population growth has been the crucial driver of cities’ GDP growth, accounting for 58 percent of it among large cities between 2000 and 2012. Rising per capita income contributed the other 42 percent.

However, the world’s cities are facing more challenging demographics, and the days of easy growth are over. In the past, city economies expanded largely because their populations were increasing due to high birthrates and mass migration from rural areas. Both of those sources of population growth are now diminishing. Global population growth is slowing because of declining fertility rates and aging. At the same time, rural-to-urban migration is running its course and plateauing in many regions. How cities adjust to the new reality is important not only for their prospects but also for those of nations that will continue to rely on thriving cities for rising prosperity.

The double hit of slowing population growth and plateauing urbanization caused population to decline in 6 percent of the world’s largest cities—with the largest share in developed economies—between 2000 and 2015. From 2015 to 2025, we expect population to decline in 17 percent of large cities in developed regions and in 8 percent of all large cities. In the developed world, the urban population in Canada and the United States grew at a compound annual rate of 2.2 percent between 1950 and 1970 but dropped to only 1.0 percent from 2010 to 2015. That rate is expected to persist until 2025 and then to decline even further, to 0.8 percent from 2025 to 2035. Although the demographic shift is more advanced in developed regions, it also affects emerging regions.

This is a challenge to the economic prospects of cities that marks a distinct break from recent history. The past 50 years were truly unusual in demographic terms, as large cohorts of working-age populations fueled the growth of cities and nations. In the new demographic era, we are likely to see a much more fragmented urban landscape, with pockets of robust expansion but also areas of stagnant and declining populations. Cities’ growth prospects will reflect very different demographic footprints and dynamics shaped by their local birth and death rates, net domestic migration, and net international migration.

Delivering financial services by mobile phone

Two billion individuals and 200 million micro, small, and midsize businesses in emerging economies today lack access to savings and credit. Even those with access must often pay high fees for a limited range of products. Economic growth suffers. But a solution is right in people’s hands: a mobile phone. Digital finance—payments and financial services delivered via mobile phones and the Internet—could transform the lives and economic prospects of individuals, businesses, and governments across the developing world, boosting GDP and making the aspiration of financial inclusion a reality.

A new report from the McKinsey Global Institute (MGI), Digital finance for all: Powering inclusive growth in emerging economies, is the first attempt to quantify the full impact of digital finance. In addition to extensive economic modeling, the report draws on the findings of field visits to seven countries—Brazil, China, Ethiopia, India, Mexico, Nigeria, and Pakistan—and more than 150 expert interviews. It also lays out the key conditions that will need to be met to capture the benefits.

The research finds that widespread adoption and use of digital finance could increase the GDPs of all emerging economies by 6 percent, or a total of $3.7 trillion, by 2025. This is the equivalent of adding to the world an economy the size of Germany, or one that’s larger than all the economies of Africa. This additional GDP could create up to 95 million new jobs across all sectors of the economy.

Wedding discrimination appeal

A Church of England hospital chaplain has lost his claim that he was discriminated against when his licence to work was withdrawn after he married his same-sex partner, in a case that gay rights campaigners hoped would force the church to change its stance.

Jeremy Pemberton was appealing against an earlier ruling that backed the church’s legal right to enforce its position that gay clergy are forbidden from marrying their partners.

The employment appeal tribunal judge Jennifer Eady said in her ruling that the state could not impose same-sex marriage on the church.

According to the ruling, Pemberton “was aware his marriage would be seen in conflict with the teachings of the church (even if he did not accept the characterisation of those teachings as doctrine) and he would thus be viewed as not in ‘good standing’, as would be understood within the Church of England”.

It added that parliament had permitted a specific exemption to the church on discrimination claims of this nature.

In a statement after Wednesday’s decision, Pemberton said his case – brought against the bishop of Southwell and Nottingham, Richard Inwood – had raised “novel and complex issues of law”, and he may take it to the court of appeal.

He added: “The result is, obviously, not the one my husband and I had hoped for. I appreciate that this case was a source of hope for many people and I am grateful that the judge has recognised its significance and indicated that its importance warrants permission to appeal to the court of appeal.

“I am now going to take some time to consider the lengthy judgment with my husband, and we will decide on the best way forward, having taken advice from my lawyers.”

A spokesperson for the diocese of Southwell and Nottingham said: “Churches across the diocese continue to offer a generous welcome to people from all backgrounds and we remain fully engaged in the church’s exploration of questions relating to human sexuality.

“The Church of England supports gay men and women who serve as clergy in its parishes, dioceses and institutions. It has no truck with homophobia and supports clergy who are in civil partnerships, as set out in the house of bishops’ guidelines in 2006.”

Laws after Brexit

Senior Tory MPs have begun pushing for a list of regulations affecting companies to tear up after Brexit, even though Theresa May has promised to carry over all EU law into British law.

Two former cabinet ministers, John Whittingdale and Michael Gove, suggested to the CBI business group on Wednesday that companies should start drawing up a list of regulations they want to see abolished or reformed.

The two leave campaigners raised the prospect of EU laws being scrapped after the passage of May’s great repeal bill carrying over existing legislation, as they cross-examined witnesses at a session of the Commons committee on exiting the EU.

Gove highlighted a government-commissioned report by Marc Bolland, the former chief executive of Marks & Spencer, which ran through a list of EU employment protections it would like to see withdrawn or changed including pregnant worker proposals, the agency workers directive, the acquired rights directive and the working time directive.

Questioning Carolyn Fairbairn, the director general of the CBI, he asked her: “Would you be able to write back to the committee with a view that your members have on those directives and the current assessment for the applicability or scope for reform of those directives?”

John Whittingdale, the former culture secretary, also asked Fairburn: “To what extent has the CBI examined the opportunities which may exist to reduce the burden on business and are you working on an analysis to present to government for potential repeal or reduction?”

He said he understood the concerns of the Trade Unions Congress (TUC) that it will want to preserve protections for workers deriving from the EU but many pieces of red tape were burdensome that had nothing to do with employment.

John Longworth, the former chair of the British Chamber of Commerce, who campaigned to leave, told the committee that he thought the “opportunities for deregulation are legion”.

Tips for Optimizing Your Resume

Studies show that hiring managers spend an average of ten seconds looking at a resume before deciding whether to keep going or move on to the next candidate. That’s right, only ten seconds! That says a lot about the job market today and the number of applicants for great positions, but it also says a lot about how you should write your resume. You’ve got ten seconds to land yourself a second glance; what do you do?

Be Concise

One thing you certainly want to avoid is a resume that is overly wordy or that puts the most relevant information at the end. You want the qualities that the hiring manager is looking for to be in the very beginning of your resume so that they are noticed and seen. Long gone are the days where relevant information could be buried on the third page and still get read. You have to be concise and to the point, and you have got to make sure that your resume starts selling you to the hiring manager from the very first word.

Tailor Your Resume

This is perhaps the most important step you can take. If you are applying for multiple positions, there is nothing wrong with having multiple resumes floating around. In fact, it is recommended. You want your resume to be tailored not only to the job you are applying for, but to the company you are applying with. Match your tone to the tone of their website and other media. If they are innovative, outside-the-box thinkers, then that is the approach you should take. Align your brand with theirs while remaining true to who you are.