In The News

 June 8

AI and Robotics Lead to U.S. Business Growth; Skilled Talent Needed

Goodcall.com

By Terri Williams

 

U.S. companies believe that an increase in artificial intelligence and robotics is good for business, according to a new Randstad Sourceright Talent Trends survey. Responses from C-suite and human capital leaders reveal the following:

  • 36 percent of U.S. companies have increased the use of AI and robotics over the last 12 months.
  • Over the same period, the number of respondents indicating that they expect significant growth in the next 12 months soared from 10 percent to 28 percent.
  • 26 percent of U.S. companies report that growth in the past 12 months surpassed expectations, notably higher than the 20 percent that reported in the fourth quarter of 2016.
  • Survey respondents overwhelmingly expect AI and robotics to have a positive impact on their businesses, with 70 percent reporting that they plan to hire extensively in the year ahead to keep pace with expected growth.
NOT IF, BUT WHEN FOR MORE AUTOMATION

While companies have been criticized for increasing their use of automation, it’s actually a good business decision for companies that want to remain competitive. Jim Guerrera is the managing director of SC Novi, an affiliate of MRINetwork, a search consulting firm specializing in recruiting for the automotive, industrial and automation sectors. “An increase in AI and robotics will definitely increase productivity and corporate profits, especially in the manufacturing sector,” Guerrera tells GoodCall®. “Companies that do not go ‘all in’ on automation will be phased out over time, as the automated factories will far out produce those that are not automated.”

Making the move to automation isn’t cheap, but it’s well worth the return on investment. “Even though it is an expensive capital cost, the way these machines are built today, they will be able to last for several years, off-setting the large upfront capital outlays,” Guerrera explains.

However, he says, “The work cannot be done with robots alone – American manufacturers need skilled and technical workers to operate these facilities.”

UNFOUNDED FEAR OF AI AND ROBOTICS

So, why do Americans in general, and American workers in particular, believe that AI and robotics will take their jobs instead of increase hiring? Hary Bottka, global concepts leader at Randstad Sourceright, tells GoodCall®, “There has been a lot of focus in the media on the loss of jobs in the U.S., in particular, that certain jobs are moving overseas and are not being replaced.”

And since this was a key issue in the 2016 U.S. presidential campaign, Bottka believes it is still fresh in the minds of the American public.

“AI and robotics are a natural next threat, as technology will displace certain job profiles in the coming years.” But, Bottka says the survey reveals that these advances in technology will actually create jobs while also changing the skills required by many organizations.

Chris Nicholson is the CEO of Skymind, the company behind Deeplearning4j, a deep learning tool for Java that is used for everything from fraud/anomaly detection to image recognition to predictive analytics.

Nicholson tells GoodCall® that many workers may be displaced. “Displacement is a good term to explain what’s happening, because it implies moving from one job to another.” But he admits, “Who gains and who loses?  It’s not always the same people.” Bottka agrees that technology will not completely phase out jobs. “In reality, technology is producing more of a shift in jobs requiring new skills, as compared to a complete loss of job opportunities for workers.”

However, it would be naïve to think that companies are not considering employee-related costs when deciding to increase their use of AI and robotics. “The rise of health care costs in the U.S. only adds to the desire for plants to get automated, because less overall workers means less overall healthcare expenses,” Guerrera explains. “And there are other productivity benefits such as the ease and ability of the robots to work 24 hours a day, 7 days a week, 365 days a year – in addition to manufacturing ‘locally,’ so U.S. manufacturers will be able to greatly reduce their supply chain costs.”

As a result, some fears of American workers may be justified. Especially workers who lack the skills to move into other areas.

THE NEED FOR SKILLED WORKERS

“You can’t automate everything, and when companies want to sell their products, they will hire more administrative and sales people, so other roles are growing,” Nicholson says. “We need to try to get some of the displaced workers into these roles.”

He also advises workers to be open to moving to another city or state. “A lot of people feel trapped in a local job market, but there are places where the local economy is really healthy and robust – but again, this may entail moving to another part of the country.”

In fact, Bottka reveals that one of the primary concerns of C-suite and HR leaders is the inability to find the talent they need for some of the new roles created by AI and robotics.

That’s because some of the new roles will require more advanced training. Randstad provides Recruitment Process Outsourcing services to some of its clients, and Bottka says there’s definitely been a shift in the types of jobs clients need. “Roles such as application developers, service technicians, and hardware or software specialists are now in demand in organizations that traditionally have hired labor to fulfill more manual roles,” Bottka explains.

It may be comforting to know that robots are incapable of replacing all U.S. jobs. “American manufacturers need skilled and technical workers to operate these facilities,” Guerrera says.

But he warns that it won’t look anything like the manufacturing work force from the 1970s through the early 2000s. “Instead of a plant filled with general manual labor workers and only some skilled workers, the plants will be filled with mostly skilled technical workers, albeit a far lower number of overall employees.”

Guerrera describes some of the most in-demand positions:

  • Manufacturing engineers who know how to work automated machinery.
  • Software programmers to code and operate the machines.
  • Controls engineers to monitor and operate all of the controls on the machinery.

In addition, Guerrera says that since machines do occasionally break down, workers with general maintenance skills are also needed. “Skilled field service personnel and maintenance engineers will be paramount to a top performing automated manufacturing facility because these individuals will perform the important tasks of keeping the machines running.”

But manufacturing is just one of the industries looking to increase automation. Bottka and Nicholson warn that employees in other areas should also step up their game. “Workers and potential workers must be aware of the skills gaps in the market and tailor their interests, studies and training to prepare themselves to be in a position to fill the these gaps,” Bottka says. “Specific skills are in limited supply, so there is a need for the existing workforce, as well as incoming workers, to choose an education and training curriculum that prepares them for these jobs.”

Nicholson agrees that learning new skills is crucial. “A lot of skills are hard to automate, like people skills, where you’re dealing with people and helping them.” He mentions nurses, therapists, counselors, teachers, and managers as jobs that are difficult to automate. “Robots can’t provide healthcare; jobs that are people-centric and where you need to need to establish a relationship are pretty safe bets.”


 

May 24

It must seem pointless or comical to ask, “Why do we need recruiters?” Ask any recruiter and, after the laughing stops, you’ll hear all the reasons you—or at least that recruiter—could possibly imagine.

Yet, even though the list of reasons will be compelling, anyone who is the stubbornly curious type will still want to know the reason, the main reason and the real “prime mover”.

That’s the nature of human curiosity: What was the real (or main) reason for the Civil War, the 2008 economic meltdown, the tangling of my phone cord and, of course, (the Biggest Question of All) why does the physical universe or anything at all exist rather than nothing?

As for needs: What is the real or main reason we need vitamin C, why does the Fed rather than the Treasury control the money supply, why do we need recruiters? Do we?

The Need for Gods and Recruiters

Somehow, we can’t help believing that there has to be one reason that is more important or that is the “real reason” for whatever we want explained.

That’s what has made many religions so attractive and durable (with exceptions like the now defunct ancient Greek, Roman and Egyptian polytheistic religions. Like modern science, they insisted that, whatever happens, there is no single explanation or factor accounting for it—in their instances, because of the maneuverings of squabbling, multiple gods as the multiple causes of everything, including why one’s well or goat has gone dry).

We are tempted to look for one reason or cause even when we know that what is to be explained is

1. “over-determined”—there are multiple independent causes, each of which is sufficient as an explanation, e.g., the sad fate of a chicken that tried to cross the road but that was simultaneously hit by both lightning and a truck;

2. “multiply-determined”—there are factors, like the quarreling Greek gods, individually insufficient as explanations, that together are the reasons, e.g., the presence of gasoline plus the presence of a match plus the presence of someone dumb enough to have lit that match jointly explain the predictable explosion.

Viewed this way, looking for the reason recruiters are necessary may seem fruitless, in the same way as looking for the reason someone else has been hired to do a job. But notice how persistently tempting it is to ask for the reason when somebody else got the job or the client company you were hoping to get.

Then there is the even more probing pair of questions, suggested above: After dropping the question “What is the real reason we have recruiters?”, it is just a matter of time before the most inquisitive among us will drop the other shoe and ask, “Do we really need them?”

 

Reasons Why We Need Recruiters

So, let’s take a look at some of the (un)usual reasons why we need recruiters, if we indeed do need them, and see whether there really is what deserves to be called “the reason”—a number #1 reason why recruiters are necessary.

Division of labor in obtaining labor: Perhaps the most obvious reason why we seem to need recruiters is that their specialized skills and resources (including networks) make finding, vetting and placing talent a much more efficient process. We can thank Adam Smith’s Wealth of Nations for this explanation: Basically, specialization creates efficiencies that create wealth. Being a recruiter is merely just another form of facilitator specialization.

Moreover, the employers that recruiters serve are subject to the same laws of efficiency: A project manager or CEO also has to specialize in his job to compete and succeed. Hence, because there aren’t enough minutes in an hour and no hours in a minute, the delegation of hiring to an HR specialist is advisable and generally unavoidable. It’s that simple.

Swelling ranks of the employable and of employers: In a tribal village of 200 people, recruiters are completely unnecessary. The small labor pool means that extensive and elaborate sorting and sifting of job applications is not required at all. Not only are the labor pool and applicant numbers small, but also the applicants will certainly be well known to the C.E.C—the Chief Executive Chief. This reduces the sourcing and screening time to virtually zero. On top of that, compensation package negotiations will be streamlined in a tribal village, since there will be few, if any, opportunity costs for either the C.E.C. or the applicant, inasmuch as there will be very few applicants or jobs to choose from.

The modern world of work on a crowded planet is completely different. First, the huge numbers of employable people, applicants and companies create innumerable mathematically possible combinations of employers and applicants as matches to be checked out.

Second, the kind of tribal firsthand knowledge of both the employer and the prospective employee is, apart from cases of nepotism, pre-existing acquaintanceship and in-house hiring, virtually non-existent.

Third, the existence of countless competitors for both those hiring and those to be hired makes shopping around, vetting and negotiating in the world’s huge modern economies more protracted, costly and complex processes.

The need for human buffers in a vast, impersonal bottom-line-oriented marketplace: We’ve all heard, “This isn’t personal; it’s business.” That sums up the massive transformation of the close-knit tribal village into the modern urban faceless-bee beehive, of simple, friendly bartering with neighbors and friends into complex, remote, money-denominated, automated and highly impersonal marketplace transactions. That’s the transformation of “Gemeinschaft” (personal, community-based) interactions into “Gesellschaft” (formal, impersonal, commerce-based) interactions that is one of the most important transformations in all of human history.

Yet, despite the fact that recruiters are part of this modern gargantuan system of formalized business relations, they somehow are expected to and do manage to maintain a human face and to provide a “human touch”—especially because they are the helping hand that makes the employer-new employee deal-sealing handshake possible.

Because the recruiter’s defining function is to help employer and job-seeker achieve their goals, his or her role is special in the domain of hardcore business: Recruiters, like caregivers, exist to help and only to help, including helping those who may be motivated to help themselves (to what they desire).

In contrast, employers and prospective employees will always, or at least initially, be tempted to play a “zero-sum” game, e.g., with respect to salary, in which gains for the candidate mean losses for the prospective employer and vice versa, and where maximizing satisfaction on one side means reducing it on the other.

Recruiters, however, are readily perceived as trying to maximize satisfaction for both the employer and the candidate (even though this is in practice, if not logically, impossible). More reasonably, what the recruiter actually does is to maximize such respective satisfactions subject to unavoidable constraints (that manifest themselves in the negotiations the recruiter helpfully facilitates).

To put this point in terms that Adam Smith might approve, recruiters supplement the cold, impersonal, often merciless “invisible hand” of the Gesellschaft marketplace with their own Gemeinschaft warm “helping hand”. In this way, a recruiter serves as not only a catalyst of employment, but also as a personalizing buffer between conflicting expectations of the hiring and the hired, and between the impersonal forces of job supply and job-seeker demand.

 

The Main Reason We Need Recruiters

Being only examples of the reasons we need recruiters, these cited explanations are, nonetheless, at least sufficient to answer the second question, “Do we need recruiters?” In terms of the framework outlined here, we can say that the need for recruiters is “over-determined”: There is, in our modern world, more than one reason why recruiters are necessary.

Still, the temptation to ask for the reason stubbornly tugs on the mind. Habits die hard and slowly; such an intellectual instinct as this one dies even harder and more slowly. So, as a concession to this reductionist urge to know the reason, the single most important reason we (still) need recruiters, and on deep reflection, I will try to offer one.

 

We all need to eat.

Michael Moffa

www.recruiter.com


 


 

Organizations Begin to Backfill and Restart Hiring

 Feb 6

Over the past several months, private employment in the U.S. has begun to rebound in an increasingly strong way. Through all of 2011, the private sector averaged 160,000 new positions per month, exceeding the monthly rates of population growth (about 140,000) and labor force growth (only about 20,000).

“Everyone is hearing about continued debt concerns in Europe, but when it comes to not hiring in America, it’s used as an excuse not to hire, rather than a reason,” notes Rob Romaine, president of MRINetwork. “Except for companies with heavy exposure to the European market, businesses are making hiring decisions based on the customers walking through their front door, not uncertainty surrounding sovereign debt an ocean away.”

A recent survey of MRINetwork recruiters noted an increase over the last six months of employers backfilling positions that had been left unfilled for two years or more. As one respondent said, “I believe [employers] cut so deeply over the past two years that productivity has suffered. Today, they are hiring out of necessity and a belief that the economy has begun to turn.”

The evidence that the economy has turned is mounting. According to the Bureau of Economic Analysis, the U.S. economy grew at an annualized rate of 2.8 percent during the fourth quarter of 2011, the fourth consecutive increase. Total GDP growth in 2011 measured 1.7 percent, not a rapid rate of growth, but a far cry from projections of a double-dip recession.

Such growth numbers are, compared to past periods of recovery, rather weak. Yet, most important is where the growth is coming from. In 2011, MRINetwork saw placements in the construction space grow by nearly 50 percent, industrial placements by more than 30 percent and consumer products and services by more than 20 percent.

“Increased hiring of senior-level talent in these sectors is promising for the general economy,” says Romaine. “It indicates a confidence and a willingness by employers to invest in talent across broad swaths of the economy despite headwinds that still persist.”

But just as employers seem to be ramping up their hunt for senior talent, the availability of such talent may be shrinking as well. Over the last six months, employers have continued to increase their use of counter-offers, hoping to retain top talent long enough to backfill their positions. In highly technical fields, such as chemical engineering or biotechnology, employers have been forced to sweeten counter-offers because there simply aren’t as many candidates as there are job openings.

Indeed, the unemployment rate for those with a bachelor’s degree or higher—perhaps the broadest definition of the skilled, professional workforce—fell in December to 4.1 percent, its lowest rate in nearly three years.

“A full-blown, double-dip recession in Europe could have a chilling effect on hiring in America. But, until it does impact the U.S. directly, businesses are beginning to return to more normal hiring patterns,” notes Romaine. “Companies are backfilling vacancies and investing in new positions. We are in the midst of the slow, but seemingly stable, rebound that had been projected.” 

 


 

 EUROPEAN NEWS

Nations Look to Change Economic Course
Feb 6

The most recent numbers from the euro zone show that the unemployment rate in the last two months of 2011 reached its highest level since the birth of the euro. Through most of 2010 and the first half of 2011, unemployment continued to fall despite a faltering economy. However, during the last half of the year, unemployment in both the euro zone and the broader European Union reversed course, hitting record highs.

The unemployment rates can be staggering. Lithuania’s unemployment rate rose to 15.3 percent during the third quarter of 2011 and, in Greece, unemployment rose to 19.2 percent in October. Spain’s rate reached 22.9 percent in November and December—similar to the unemployment rate in the United States during the Great Depression.

Yet, amidst these staggering unemployment rates, Austria, the Netherlands, Switzerland, and Germany held strong at 4.1 percent, 4.9 percent, 3.3 percent, and 6.7 percent, respectively.  The German unemployment rate is actually at its lowest since the reunification of East and West Germany, making it the largest country in Europe by both population and economy.

In January, EU leaders met in Brussels to try to work out a new plan to balance three seemingly opposing forces: 
unemployment, austerity measures, and growth.  But as is the very nature of the European Union, each member country is also taking efforts to rectify their own employment situations. 
In France, President Nicolas Sarkozy recently made a televised announcement about some of his plans. Included is a proposal to shift social welfare costs from companies to consumers by cutting payroll taxes while raising the value-added tax (VAT). Sarkozy also proposed a new employment contract, which will weaken the rules that created France’s legendary 35-hour work week.

The changes are being proposed to help make French companies more competitive, but they are also highly unpopular among French voters, who will be heading to the polls in late April.

France’s 9.9-percent unemployment rate, though, is minor compared to Spain’s 22.9-percent rate. A new Spanish government elected in December, led by Prime Minister Mariano Rajoy, is now preparing to do battle with unions to begin making changes to labor contracts that are expected to decrease wages, worsen working conditions and reduce guaranteed severance. Critics worry that cuts may hurt the economy further, but still may not be deep enough to actually spur job growth.

As European leaders continue to seek out economic mechanisms to curtail joblessness, the world looks on. In the past, growth in the American economy has been sufficient to pull Europe out of recession. But with U.S. GDP growth at just 1.7 percent in 2011, that boost didn’t occur.

While unemployment is all but certain to remain high over the coming year, it is also possible that the situation will create the political will to force fundamental changes to the business climate in Europe. Such changes could even make European employment practices more competitive with those in America.


 

Denso Growth Heats Up
Jan 10

DETROIT – To the casual observer, automotive heating, ventilation and air conditioning might appear to be must-have commodity products with little value-added content, but not to Denso.

Japan’s largest auto supplier , which is the No.1 producer of automotive thermal management systems with about 30% of the global market, sees broad opportunities for high-tech additions to its HVAC portfolio as electric vehicles present new challenges in ways to generate heat within the passenger compartment.

This explains Denso’s announcement this week here at the North American International Auto Show of plans for a new HVAC plant in Silao, Guanajuato, Mexico.

It will be Denso’s third plant in Mexico, but the first dedicated to thermal products. Denso has three HVAC plants in Michigan, one in Arkansas and one in Canada.

“Mexico is the right decision for us because it completes our thermal manufacturing footprint in North America,” Hikaru “Howard” Sugi,president of Denso International America, says at the press conference.

“Mexico is a growing market, and this is an opportunity for us to strengthen our competitiveness and our global leadership position,” he says.

Construction of the $57 million facility is set to begin in October 2013. Some 400 employees are expected by 2015.

Getting close to its customer base is a primary reason for the new plant.

Several auto makers are ramping up vehicle production in Mexico, and Audi executives extol the virtues of Mexico in interviews this week about plans for the auto maker’s first North American assembly plant.

Denso has identified Ford and Honda as its first customers for the new operations in Mexico. Nissan also has a plant 100 miles (160 km) away in Aguascalientes producing the Sentra, Tiida/Versa and March.

Much farther away, in Tijuana, is Toyota’s plant, which assembles the Tacoma pickup. Toyota owns about 25% of Denso.

Sugi says the new Silao plant will supply HVAC units only to vehicle-assembly plants in Mexico, not the U.S.

Thermal systems are Denso’s most important product sector, representing 30% of sales.

As electric vehicles become more popular, Sugi says thermal systems will evolve to provide critical cooling of battery modules and motors while at the same time keeping the passenger compartment comfortable for occupants.

Conventional AC systems require a compressor powered by the engine. “In an electric vehicle, the compressor moves to an electrically driven type, which needs a small battery and an inverter,” Sugi tells WardsAuto in an interview here.

He predicts EVs will make up as much as 10% of the global vehicle market by 2020.

Likewise, stop/start systems, which are gaining acceptance as a method of saving fuel by shutting down the engine while idling at traffic lights, create a market for Denso’s electrically driven water pumps.

As engines become smaller and integrate turbocharging, this drives demand for additional Denso products such as exhaust-gas recirculation valves and heat exchangers.

“It all requires thermal management, which means our content is increasing,” Sugi says.

With skyrocketing demand for forced induction, Denso is considering entering the turbocharger market, Sugi says.

Established players BorgWarner, Honeywell (Garrett) and Japan’s IHI now are joined by new entries, including Continental and Bosch Mahle.

Denso, which has its North American headquarters and tech center in Southfield, MI, is stepping up its development of hybrid products, such as batteries and stop/start systems. It also is building a battery-cooling lab in Southfield that will add up to 40 new jobs, says Doug Patton,senior vice president-engineering for Denso America.

In addition, Patton says the supplier plans to manufacture full hybrid components at an existing U.S. plant by 2015.

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