CEO Blog

Category Archives: IT Staffing Industry

All blog posts by Kevin Dee, Chairman at Eagle — Canada’s premier staffing agency, related to the information technology (IT) staffing industry.

Technology Industry News for April 2015

technologyThis is my 30,000 foot look at events in the ICT industry for April 2015. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of April in previous years …

HP logoFive years ago in April 2010 HP paid $1.2 Billion in the somewhat surprising purchase of Palm; Twitter bought a couple of companies, Cloudhopper and Atebits.  Symantec also bought a couple of companies (PGP ($300 Million) and GuardianEdge ($70 Million).  Oracle paid $685 Million for Phase Forward, Juniper paid about $100 Million for Ankeena Networks and Salesforce bought Jigsaw for $142 Million.  Three years ago in April 2011 Texas Instruments bought National Semiconductor for $6.5 billion, Level 3 Communications paid $3 Billion for Global Crossing, Lawson Software was sold for $2 Billion to GGC Software Holdings (an Infor company) and Seagate bought the hard disk Facebook logodrive operations of Samsung.  In April 2012 Facebook made a $1 billion bid for Instagram, Facebook also bought a piece of the patent action from Microsoft after Microsoft had paid AOL more than $1 billion for the patents.  DELL made three acquisitions this month, Wyse technology, Clerity Solutions and Make Technologies.  IBM picked up Toronto based BI company Varicent Software; Intel paid $140 million for some assets from Cray; Citrix picked up Podio; and Twitter bought a startup to acquire its team of developers. Last year in April 2013 Rogers paid $200 million for Primus’s Blackiron subsidiary, including datacenter capability; Toronto based Softchoice also chose to go private in a $412 million private equity deal; Shaw paid $225 million for an Enmax fibre network subsidiary in Calgary; Best Buy sold its stake in Carphone Warehouse for $775 million (having paid $2.1 billion in 2008).  Google paid $30 million for social company Wavii.  Other big names on the IBM logoacquisition trail this month include Intel (Mashery), IBM (Urbancode); Computer Associates (Nolio).  Finally Facebook had a couple of small acquisitions Osmeta and Parse.  April 2014 saw Microsoft officially entered the handset business with the completion of the $7.5 billion purchase of Nokia’s devices business.  Zebra Technologies paid $3.5 billion for Motorola’s unit that makes mobile devices for business which is a move in the The apple logo and apple with a bite out of itever expanding Internet of Things space. Apple paid $479 million purchase of the LCD chip development unit of Renesas Electronics.  IBM snapped up marketing automation software company Silverpop Systems and open source software company Red Hat paid $175 million for storage company Inktank.

Which brings us back to the present …

Nokia logoMy impression of April 2015 was of a month where not too much happened, but when I looked at the facts there was plenty of action!  Nokia was the biggest story, paying $16.5 Billion for telecom company Alcatel-Lucent, but there was also a $4Billion deal that saw Capgemini buy services firm IGATE and LinkedIn made its largest acquisition ever, LinkedIn Logopaying $1.5 Billion for training portal Lynda.com.  LinkedIn also bought a predictive insights startup company, Refresh.  Netsuite paid $200 million for ERP and Commerce software company Bronto Software and Blackberry reputedly shelled out $150 million for file sharing security company Watchdox.  Salesforce was also out shopping, picking up mobile two-factor authentication startup, Toopher.  In another deal involving billions, Informatica decided to follow in DELL’s footsteps and go private for a $5.3 Billion price tag.

There were a few studies out giving some mixed messages, worldwide sales of PCs declined but not as much as expected; the Canadian Internet of Things market is projected to grow from $2.9 Billion in 2013 to $6.5 Billion in 2018; Samsung shipped the most smartphone last quarter and global IT spending is expected to be hit by the strong US dollar to the tune of $48 Billion in 2015.

Canadian dollar the LoonieThe economic indicators this month were not as strong as we have seen previously with confidence in both the Canadian and US markets dampened.  The US did have decent growth in jobs, just not as much as in previous months and Canada was essentially static remaining at a 6.8% unemployment rate.  Some indicators suggest a slowdown in the US, but others think it is just a short term impact due to bad weather and port closings.  With most indicators up, employment up and the dollar strong I think the US is going to be just fine.  Canada is still feeling the effects of the hit to the oil patch but other sectors are still performing strongly.  Given everything that I am seeing, I would expect the indicators to be looking better next month.

That is my monthly look at the IT industry, and a little market commentary.  Until next month, walk fast and smile!!!!!!

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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It is Time to Take a Hard Look at Payrolling

Jack Welch quote about teamsCompanies have many excellent reasons why they use a flexible workforce to supplement their full time staff.  Like any purchase, organizations want to get the best price possible for these services and one of the ways they try to save money is by sourcing the people themselves and then “payrolling” them through a third party, for a small fee.  The rationale is that the fee paid to the agency is reduced and thus the company saves money.

A detailed analysis of the facts shows that (a) companies do NOT save money, in fact they actually pay more.  PLUS (b) those organisations introduce increased corporate risk!

Here is a look at the real costs of payrolling:

  1. The average payrolled resource will actually be paid above market value, because there is no competitive process.
  2. By the time a payrolling fee is added, the amount paid by the organisation is higherthan they would have paid the agency to do the work for them.  Eagle’s internal analysis would suggest that on average the difference is greater than 10%!
  3. The increased rate paid to the individual causes a market issue over time because they expect that increased rate for all of their future work.  So overall market rates get edged up artificially and companies end up paying EVEN more for these resources into the future.
  4. There is also a hidden cost for the internal company resources who will have spent their efforts in finding this person, instead of focusing on their company’s core business.

In addition to dollar considerations there are corporate risk issues:

  1. The independent resource is not as independent as one sourced through a third party.  They have a relationship to the organisation’s hiring manager, they won their role without competition thus creating a potential conflict of interest with the organisation’s hiring manager.  This can make it more difficult to handle potential performance issues.
  2. Employer/employee relationships are a tricky area when talking about independent contractors or worse still “sole proprietors” who operate as independents. Many government departments, both federal and provincial, led by CRA are very interested in this area.  Payrolling erodes the independence factor and thus increases risk to the hiring company.
  3. Recent practices by some third parties of charging the payrolling fee to the individualscauses an even greater risk.  Positioned as an easy “money saving” scheme to the client, it can end up being a minefield as evidenced by a recent $384 million class action lawsuit launched against one large Canadian company and their third party provider!  It is worth noting that it is illegal in Canada to charge an individual a fee for work, so if an independent contractor is not really independent, then in addition to scrutiny on remittances you might have a big legal problem.

Companies can benefit most by engaging credible suppliers to compete on every resource requirement.  This approach means that companies can focus on their actual costs, not on other factors such as what their supplier might make.  According to Statistics Canada, the average bottom line in the staffing industry in Canada is 3 to 5% of revenues.  So chances are, your staffing supplier is NOT making out like a bandit!  Let the market forces work, and everyone benefits!

So the best choice for organizations, for both price AND risk management, is the competitive market.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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CANADIAN JOB MARKET Review First Quarter 2015

Newspaper jobs sectionGeneral Observations:

As always, the intent of this summary is to provide some insight into Canada’s job market with input from many sources including our own “from the trenches” view.  We want to bring value to both job seekers and hiring managers with these observations and opinions.

The first quarter started with a bang, and not a good one!  The price of oil took a hammering from its mid-2014 highs above $100 a barrel down into the mid $40s.  In addition there were a slew of layoffs in the retail space with Target, Sony, Mexx and Holt Renfrew all announcing cut backs or just closing up Canadian operations.

The unemployment rate at the end of Q1 was 6.8%, up from 6.6% at the end of the last quarter and Canada had added 50,000 less jobs in the 12 months to March 31, 2015 than it had in the 12 months to December 31st 2014.

TSXAs another economic indicator the TSX has been fairly steady, despite other volatility in the markets.  At the end of Q1 it had a reading of close to 15,000 (and is up from there today).  This reading was not a marked contrast from the reading of 14,700 at the end of the last quarter.

As already mentioned the price of a barrel of oil has plummeted and is currently sitting around $55 a barrel, but at the end of Q1 was below $50.  This had a significant impact in the oil patch, resulting in cut backs, reduction in spending and layoffs.  When coupled with a low Canadian dollar however it is not ALL bad news, and Canadian manufacturers and exporters are benefiting. One prediction suggests that the oil patch will ultimately lose about 8,000 jobs through this period, however in that boom and bust world we will see it come back with a vengeance at some point.

One of the largest employers in Canada is the financial sector, centered primarily in Toronto, but with a significant presence in Montreal. There are many reasons why this sector remains busy including its highly competitive nature, evolving technologies, regulatory change and volatile markets.  In addition to these factors the booming US economy means that I expect this sector to remain busy.

The telecommunications sector is another big employer in Canada and remains busy.  The demands on their infrastructure, technology advancements, retiring boomers and expansion into new markets are all drivers of their need for people in addition to the ongoing need to compete in a very competitive space.

ConstructionThe construction industry continues to be a great place to find work, both in the trades and in the head offices of the large companies. There are construction sites in most major cities with infrastructure projects, office towers and condo developments. There has been an impact, particularly in Alberta from the drop in oil price.  I expect this to be a point in time “bust” and a recovery can be expected if not in the second half of 2015, then it should happen in the first half of 2016.  There continues to be high demand for “trades” in the home renovation and small scale construction world.

Despite the need for governments to contain costs we have seen a fairly steady demand in Federal, Provincial and Municipal Governments.  They are huge employers, and people with the right skills are always in demand. The required downsizing is generally achieved through attrition and there is always work to be done. Regulatory change, policy development and general administrative needs dictate the need for a large and skilled workforce that receives competitive incomes and very attractive pensions and benefits. The wild card here will be the effect of upcoming elections and the impact of lost oil revenue taxes.

The Canadian Staffing Index is an indicator of the strength of the largest provider of talent in any economy (the staffing industry) and an excellent barometer of the health of Canada’s economy. The index suggests a slowdown in the demand for talent in Q1 of 2015, and a slower quarter than the Q1 of 2014.

Eagle E logoHere at Eagle we have seen significant impact on our Western Canada business however other markets remain busy.  The first quarter saw a drop in demand by more than 30% in orders, most specifically from Calgary but with some impact in other Western markets too.  The GTA remains very busy and the National Capital region is experiencing its annual government year-end slowdown, but nothing unexpected.

More Specifically:

cn towerThe GTA (Greater Toronto Area) is Canada’s and Eagle’s largest market.  The number of head offices located here plus a population size that makes it the 4th largest city in North America mean there is a lot of business here.  This market accounts for approximately 60% of Eagle’s business which comes from the major industries here, which include the financial, insurance and telecommunications sectors.  The retail sector and the construction industry generate significant demand, in addition to the engineering space.  The GTA is also home to a large part of the Ontario provincial government and multiple municipal governments.  Hence the GTA offers the most opportunity in Canada, but is also the most competitive city in Canada.  It is definitely the city I would want to be in if I were looking for work.

oil rigsIn Western Canada Calgary has taken the brunt of the hit from the drop in oil prices, and it has been a significant hit.  Having said that, the city has always experienced a boom and bust economy, but just hasn’t had a bust for a while!  Things will return, and as the “hub” for Western Canada, with the second largest number of head offices and the attraction of the low Alberta tax rate (for now) we expect it to boom again.  Edmonton will also be affected by the oil price as The Alberta Government is dependent on taxes from oil revenues, although the impact has not as yet been significant.   Saskatchewan is also generally a fairly hot market for talent but will feel the effect of a lower oil price.  The opportunity in the current market is for companies to upgrade their low performers, taking advantage of the available talent which will quickly disappear as the economy rebounds.

Parliament building in OttawaEagle’s Eastern Canada region covers Ottawa, Montreal & the “Maritimes”. Ottawa has been a steady government market for some time now and we don’t see that changing as boomers retire and new opportunities arise.  Montreal continues to be steady, particularly in the financial sector, the telcos and the construction industry. There will be some impact from the oil price felt particularly in Newfoundland.  This region is typically slower for job creation at the best of times, so I expect it to be even slower than normal until we see an uptick in oil prices

AT Eagle our focus in on professional staffing and the people in demand from our clients have been fairly consistent for some time. That would include Program Managers, Project Managers and Business Analysts who always seem to be in demand. It might just be our focus, but Change Management and Organizational Excellence resources are in relatively high demand too. Big data, analytics, CRM and mobile expertise are specializations that we are seeing more and more. On the Finance and Accounting, side we see a consistent need for financial analysts, accountants with designations and public accounting experience plus controllers as a fairly consistent talent request. Technology experts with functional expertise in Health Care is another skill set that sees plenty of demand

Summary:

Always look on the bright side of life
The first quarter has been a tale of East versus West.  The West has suffered through the predictable fallout from a dropping price of a barrel of oil, the Eats have continued somewhat unabated.  Now is a tough time to be looking for work in the oil patch and we are seeing an increase in willingness to travel to where there is demand for talent.  While our crystal ball is no better than any other, we expect this situation to correct through the latter part of 2015 and first half of 2016.

While the impact in Calgary has been significant we have not seen too much impact in other markets, including Edmonton which we would have expected.  This may happen yet, with an impending election and the impact of dropping revenues from oil taxes.

The other big verticals such as Financial, Insurance, Telecommunications and Construction have not been greatly affected by the price of oil. Demand for talent appears to be strong and we are seeing these sectors benefit from newly available talent, previously employed in the oil sector.

Despite the current crunch, we expect continued skills shortages in our knowledge economy, partly fuelled by the boomers retiring, but also caused by our education system not turning out the right skill sets and the advancements in technology creating a shortage as the skills catch up.

The unemployment rate at 6.8% is not great but it is also not terrible.  When you factor in the fact that unemployment amongst professionals is probably more like 4% companies are still having trouble finding the right talent, at the right time for the right price!

That was my quarterly look at the Canadian job market and some of its influences.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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Technology Industry News for March 2015

Tech pictureThis is my 30,000 foot look at events in the ICT industry for March 2015. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of March in previous years …

Five years ago, March 2010 saw a continuation of the economic recovery.  It was a quiet month for M&A activity with CA buying both 3Tera for about $90 million and Nimsoft for $350 million.  Chordiant was bought by Pegasytems for a little over $160 million, and the other notable deal was Avnet’s $340 million purchase of Bell Microproducts.   Three years ago, in March 2011 world events included Japan’s earthquake, tsunami and subsequent nuclear woes.  Montreal’s Radian6 was snapped up by Salesforce.com for about $276 million; Facebook made a couple of acquisitions in the mobile space Snaptu and Beluga; YouTube paid about $50 million for Next New Networks; McAfee bought database security firm Sentrigo; Cisco logoCisco bought portal company newScale; Teradata bought data analytics startup Aster data … a continuation of the consolidation in the red hot data space;  and OpenText bought a mobile app development tool vendor WeComm.  In March 2012 there was some activity with a couple of (then) young companies receiving significant capital Appirio ($60 million) and Hootsuite ($20 million).  Cisco made a couple of acquisitions, paying a wopping $5 billion for video software and content company NDS Group in addition to a smaller network management buy, ClearAccess.  NEC paid $450 million for the information management business of Convergys and Avaya paid $230 million for an Israeli videoconferenceing and telepresence company Radvision.  Other companies on the acquisition trail were DELL, EMC, SafeNet, Avnet and Oracle logo a large software company originally noted for its databaseThe Utility Company.  Two years ago March 2013 saw some of the “usual suspects” making acquisitions, but there were no billion dollar deals announced.  Oracle continued its move into the telco space with the purchase of Tekelec; Google bought a small Toronto University based company DNNresearch in the machine learning vertical; Microsoft sold Atlas Advertiser Suite to Facebook; and Yahoo bought Summly.  Last year in March 2014 Facebook made a, somewhat surprising, $2 Billion acquisition of virtual reality company Oculus VR.  Intel also expanded its horizons with the $150 million acquisition SAPof smart watch maker, Basis Science.  SAP added to its purchasing software suite with the acquisition of Fieldglass and Telus made a couple of buys, Enode a management consulting company out of Quebec and Med Access an addition, in British Columbia, to their healthcare division.

Which brings us back to the present …

March 2015 saw some significant M&A activity with HP paying $3 billion for Aruba Networks; Lexmark paying $1 HP logobillion for customer management software company Kofax; eCommerce company Rakuten paid $410 million for ebook marketplace Overdrive; Cheetah Mobile is paying $58 million for mobile ad networkMobPartner;  TeraGo Networks paid $33 million for cloud provider RackForce; IBM bought natural language and image processing company AlchemyAPI; and in the cable TV world Charter Communications is paying $10.4 billion for Bright House Networks.

The apple logo and apple with a bite out of itOther companies in the news includes SAP laying off 3% of its workforce (2,250, jobs); Ericsson is cutting 2,200 jobs and Sharp is cutting 6,000 jobs.  Aplle released details of its new Apple watch, and also had good news about its market positioning of mobile phone sales since its release of the iPhone 6.

oil rigFor yet another month the reports and surveys out of the US were all positive demonstrating a strong recovery in that economy.  Canada’s news was less than stellar with unemployment creeping up to 6.8% from 6.6% in January.  The collapsing oil price is anticipated to cost 8,000 jobs in the Canadian oil patch.  Another report suggests that skills shortages will see Canada short by 182,000 people in the tech sector by 2019.

On a final note the FAA moved a little bit on approval of drone deliveries in the US, however the limitations are likely to limit that industry in the near term.

That is it for my look at what was happening in the technology space over the last month, compared to the same month in previous years.  I’ll be back at the end of April, until then … walk fast and smile!

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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The Recruiter Value Proposition Continued

Famous People on the bus quote from Jim CollinsIn recent articles I talked about some of the reasons why hiring managers should invest in a relationship with their recruiters.   I talked about three key reasons:

  • Just in time staffing. Their reach in finding talent when you need it;
  • Upgrading.  Their ability to help you improve your team; and
  • Knowledge Transfer. Their ability to bring expertise that can share their knowledge with your existing team.

Here are just a couple more reasons why you might want to spend some regular time with your recruiter.

“The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.”  Steve Jobs

Market Knowledge:

Recruiters have an excellent pulse on the market and know what skills are in demand, what are scarce, what rates are and what the trends are.

If you have an upcoming project that will require a particular skill set it would make sense for you to understand the availability of that skill set in your market and the associated potential cost.

Managers can a learn a lot about what their competition is doing from recruiters.  Are they hiring or laying off?   Is there a buzz about their culture … do people like working there?  There are often times where companies can benefit from hiring someone with experience at a competitor (obviously respecting non-competition clauses) and your recruiter can find those people.

I wish I had a dollar for every manager that wanted to understand their own value in the market!

“Often the best solution to a management problem is the right person.” Edwin Booz

Cost containment:

This can come in many flavors, and a recruiter with a partner attitude will try to bring value where they can.

Many companies have a tendency to hire friends … people they know and trust.  Clearly there are very good reasons for doing this, but it is never the most cost effective solution … because there is no competitive process to ensure that the contract rate, or salary is competitive.  We always recommend our clients compete the position, with the “friend” as one candidate.  This allows the hiring manager to see if there are potentially better candidates and ensure the cost is in line with the market.

There is a misconception that contract employees are more expensive that full time staff, and this can color a decision the wrong way.  A good recruiter can guide a hiring manager through an analysis that takes into account the “real cost” of an employee.  Sometimes the answer is NOT to go full time … especially when flexibility, training and management costs and the impact of pensions and company benefits are taken into account.

“The key for us, number one, has always been hiring very smart people.” Bill Gates

The traditional way that recruiters can help clients to get cost effective solutions is as relevant as it always has been.  Often clients think they need an expert to do the job, so having a few candidates to look at and understand the relative cost/experience/capability can result in a better fit!

I read a FastCompany article just this morning that suggests one of the biggest challenges that CEOs will face in 2015 is finding the right talent.  Having a relationship with a good recruiter is a great way for companies to be ahead of the game with that challenge.

“The marketplace is incredibly competitive in every industry around the globe.  The difference between success and failure is talent, period!”  Indra Nooyi, CEO Pepsico

So … go ahead hug your recruiter today!
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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
—————————————————————————————————————————————–


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Technology Industry News for February 2015

technologyThis is my 30,000 foot look at events in the ICT industry for February 2015. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of previous year’s Februarys …

Five years ago in February 2010 M&A activity was slow with no huge buys.  Google bought Aardvark; Oracle purchased a couple of smaller entities; IBM bought a small network software company that focuses on the telco vertical; and Sybase bought a company that has a strong foothold in the financial services HP logovertical.  There were lots of signs that the recovery was under way and Canada saw some job growth after a period of decline.  February 2011 was another quiet month for M&A with HP buying Vertica; Opentext bought Metastorm ($182 million); and Rackspace acquired Anso Labs.  World news was dominated by the popular uprisings in a growing number of countries and the reactions of those governments including the brutality of Gaddafi’s Libyan supporters.  Three years ago, February 2012 was not a blockbuster month for M&A, but there was some interesting activity.  The biggest deal of the month saw Oracle pay $1.9 billion for talent management company Taleo.  Siemens Canada paid $440 million for networking equipment company Rugged.com.  IBM bought BYOD company Worklight; Dell bought backup and recovery company AppAssure; Apple bought mobile search company Chomp; and LM Ericsson bought Ottawa based BelAir Networks.   Two years ago in February 2013 Dell dell logowent private in a $24.4 billion deal, that included a $2 billion investment by Microsoft.  Oracle paid $1.7 billion for networking company Acme Packet Inc.; Rackspace bought big data company ObjectRocket; Telus was busy with two acquisitions, electronic medical records division of the Canadian Medical Association and digital forensics company Digital Wyzdom; HP also sold the Palm operating system to LG for their smart TVs.  Last year in February 2014 it was busy in M&A. Facebook make a big move with the $16 billion acquisition of Whatsapp.  Comcast made a $45 billion play for Time Warner Cable and regulatory approval or otherwise is imminent; Oracle paid a reputed $400 million for data management platform company Bluekai; LinkedIn paid $120 million for online job search company Bright; and Klout was bought for about $100 million by Lithium Technologies.  Microsoft logoGoogle made a couple of acquisitions, online fraud company Spider.io and secure logon company Slicklogin.  IBM bought database as a service company Cloudant; and Monster bought a couple of companies, social profile company Talentbin and job aggregation and distribution technology company Gozaic. Finally, Microsoft announced Steve Balmer’s retirement and appointed a new CEO, Satya Nadella.

Which brings us back to the present …

StaplesFebruary 2015 saw some interesting activity.  The $6.3 billion merger of Staples and Office Depot and the $1.6 Billion purchase of Orbitz by Expedia are two examples of sectors experiencing massive consolidation.  There was a big buy in the communications and IT space with Harris paying $4,75 billion for Excelis to establish a 23,000 person company.  There was a big data center play with UK based Telecity Group paying $2.2 billion for Interxion Holdings.  Microsoft made a couple of acquisitions, paying $200 million for pen-tech maker N-Trig and $100 million for mobile calendar company Sunrise.  Samsung bought a mobile payment company (competing with Apple pay), LoopPay.  Also out buying was Twitter logoTwitter which picked up Niche, a network of social media creators.  There were a number of interesting deals in Asia, including Sapdeal buying luxury fashion estore Exclusively; Foodpanda made six acquisitions of online meal delivery services to establish itself as a powerhouse in that space.  Showing some forethought Australian job board OneShift has bought Adage, which is a job board serving people over 45 … maybe I should register!

The US economy continues its recovery with almost every indicator being extremely positive.  Confidence indicators, GDP, unemployment figures … all show an economy that is growing.  So much so that the number one concern of businesses is now the talent shortage!  Canada on the other hand is not so buoyant and continues to “go sideways” … clearly not helped by the price of a barrel of oil these days, and Obama playing politics by vetoing the Keystone Project.

BitcoinIn other news supporters of net neutrality had a victory this month when the US Federal Communications Commission voted in their favor.  Another Bitcoin exchange went bust, this time amidst rumors of some less than ethical practices.  Gartner tells us that worldwide IT spending will increase, Careerbuilder tell us more people want to (need to?) work after retirement and the growth of smartphone sales keeps on rolling.

That is it for my monthly look at what was happening in the technology space over the last month, compared to the same month in previous years.  I’ll be back at the end of March, until then … walk fast and smile!

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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
—————————————————————————————————————————————–


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The Continuing Value of a Recruiter to The Client

invest in people There are many reasons why clients will go to a recruiter.  Some of those reasons are fairly common and others are not so common.  Typically clients look to a recruiter when they have an urgent need for talent … but an ongoing relationship with your recruiter will mean you can actually get proactive!

Today I will talk about the kind of situation many managers face, the need to bring new knowledge into the organization.  There are many reasons why this is needed.

  • You do not have a key skill amongst your employees;
  • A key resource leaves and the skill leaves with them; or
  • A new technology comes into the company and you have no-one with that skill.

Typically companies will approach these situations in a few different ways:

  • Hire someone new into the position who has that skill;
  • Hire a contractor into the position;
  • Muddle through; or
  • Outsource the responsibility to an external supplier.

There are however many times when you have good employees, who could do the work if they had the right experience.  They are also people you would want to reward with this kind of opportunity and if your could then it would strengthen their tie to your organization.

What can you do?

Your recruiter can help you to identify the right kind of contract resource, who can bring the experience and the skill.  Their task would NOT be to do the work themselves but to partner with the internal employee through the process of getting them up to speed, while ensuring the work is done well.  As a part of their mandate they could even train a few in house people in relevant skills to ensure adequate backup for your new in-house expert.  This approach is more attractive to in house resources who might resent the “sexy” projects being given to contract resources.

The short term cost might be a little higher than hiring a net new person, or even hiring a contractor for the duration.  Longer term you have the skills you need, happy employees and your costs are likely to be less.

“If you take care of your employees they will take care of your customers and your business will take care of itself.”  J W Marriott

It requires a little more planning and the right expectation setting with both the contractor and the employee.  It might require a willingness to put in a little extra effort on the part of the employee, but they will be getting new skills in return.

“The best time to plant a tree was 20 years ago. The second best time is now.”  Chinese Proverb

This is just one more reason why hiring managers should have an ongoing relationship with their recruiter.  A good recruiter will be able to understand the business issue, find exactly the right candidate and set the right expectations with an incoming contract resource.
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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
________________________________________________________________


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The Value of a Recruiter to a Hiring Manager

Rob Crandall quote about upgrading your teamFor some people a recruiter is a “necessary evil” … someone that they call as a last resort, when they are desperate to fill a role.  The rest of the time they will avoid them.

The fact is that in addition to being a source of talent there are many reasons why a hiring manager should cultivate a relationship with their recruiting supplier, especially when there is no immediate and burning need.  The recruiter is a great resource that can help with a number of management challenges … so I would counsel hiring managers to put their recruiters to work!

Today I will focus on how a good recruiter can help you improve your existing team.  This is especially important during quieter economic times.

“Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.”  Ronald Reagan

During a downturn, excellent talent comes on the market or at the very least is willing to have conversations about other opportunities.  It might be their company is struggling, a project lost funding or just the uncertainty of their particular situation … but it spells opportunity for the astute hiring manager.   Especially if they have a good recruiter finding these people for them!

In my management experience the number one source of pain has always been the underperforming employee with the attitude problem.  They might do just enough to “get by”, but they cause their manager heart burn, take more management time than the rest of your staff and they disrupt the team dynamics.

I would suggest that most managers that have a number of people on their project, or working for them will have their “problem child”.

Imagine how much better your days would be if that person were replaced by someone like one of your top performers!  Suddenly stress would be reduced, productivity would be increased and you would find time to spend on more enjoyable activities.  Your team would be happier and so would you.

If you have a relationship with your recruiter you can talk about these things.  You can have them keep an eye out for the “A’ player that might fit your team.  If you have a relationship they will know the soft skills that are needed, they will understand the hard skills that are mandatory and they will not waste your time by firing over resumes of people who might just be another problem child.

Companies always talk about the cost of recruiting and how expensive it is … well think about the real return on investment in this one move!  What dollar benefit would your company receive by replacing one poor performer with an “A Player”?

This is just ONE reason you need to have a relationship with your recruiter!

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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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Technology Industry News for January 2015

Tech pictureThis is my 30,000 foot look at events in the ICT industry for January 2015. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of previous year’s Januarys …

The apple logo and apple with a bite out of itFive years ago in January Twenty-Ten there was cautious optimism about recovering from the recession, but no real blockbuster M&A deals.  Oracle, Apple, EMC, and Cisco did continue to demonstrate their appetite for acquisition.  Perhaps the most interesting acquisition saw PWC here in Canada return to the IT consulting business with the acquisition of Allstream’s non-telecom consulting business, several years after exiting the business by selling it to IBM.  It is worth noting that Apple released its brand new iPad .  In January 2011 economic news was generally positive, Steve Jobs announced his leave of absence from Apple and Larry Page assumed the CEO role at Google.  There were also some big M&A deals, the largest being the $3.1 Billion acquisition of Atheros Communications by Qualcomm.  Verizon paid $1.4 Billion for Teremark Worldwide and IGate paid $1.2 Billion for Patni Computer Systems.  Also out spending money were Dell, Google, Cisco and Salesforce.com. Things were very quiet in M&A three years ago in January 2012.  Former tech giant JDSU was back on the acquisition trail, even if just to pick up a small Vancouver based company, Dyaptive Systems.  Symantec paid $115 million for LiveOffice to help with its storage capabilities, Google bought a bunch more IBM patents, and blackberry 10Xerox picked up Laser Networks in the managed printing space.  Rim (now Blackberry) also announced a change in leadership.  Two years ago in January 2013 Cisco bought mobile network software company Intucell for $475 million and sold its Linksys division to Belkin.  The biggest dollar value deal was AT&T’s purchase of some of Verison Wireless’s airwaves for $1.9 Billion.  Other deals saw NCR buy video software ASTM company uGenius Technology; Canon Canada acquired long-time partner and document management company Oce Canada; NetSuite bought retail management systems company Retail Anywhere; and AVI-SPL bought Duocom-Duologik.  January 2014 was an interesting month with a few big M&A deals.  Google was an especially busy player, selling its Motorola Mobility handset unit to Lenovo for $2.9 Oracle logo a large software company originally noted for its databasebillion but paying $3.2 billion for Nest Labs and the company also bought Bitspin.  The other big deal saw VMware pay $1.17 billion for mobile device management company AirWatch.  Other big names on the acquisition trail included Oracle who bought cloud based service delivery company Corente;  Microsoft paid a reputed $100 million for cloud based service company (seems to be a theme) Parature;  Ricoh purchased IT service company Mindshift from BestBuy; and Hootsuite bought analytics company uberVu.

Which brings us back to the present…

January 2015 in the technology business world was an interesting one, as we deal with dropping oil prices, changing currency rates and their affects, both good and bad on various industries. January did see some interesting M&A activity, a US economy that seems to just keep rebounding and a Canadian economy that seems to be slowing somewhat.

YahooOn the M&A front the biggest deal, should it materialize will impact mobile users in the UK, reducing competition, with Hutchison offering more than $14 billion for O2. Other big dollar news sees Yahoo looking like it might be remaking itself, spinning off its $40 Billion stake in Alibaba to become smaller, leaner and either buy or be bought!  The final M&A activity involving a “B” sees Telco equipment company Commscope offering $3 billion for TE Connectivities network business.

Facebook logoThere were also a number of very well-known companies out buying in January, and in no particular order … Amazon is paying something like $300 million (approximate) for chip designer Annapurna Labs; Expedia is buying its online travel competitor Travelocity for $200 million; Samsung is buying Brazil’s largest print company Simpress for reputedly close to $100 million; Google is chasing mobile payments company Softcard (again $100 million seems to be the ballpark); Facebook has bought Wit.ai a company that has a Siri like solution that can be embedded in other products; Dropbox is buying CloudOn a document editing and productivity tools company; Twitter is paying somewhere between $30 million and $40 million fpor Zipdial, an Indian company that does some funky marketing thing with phone hang ups (I don’t get it); and finally Microsoft made two acquisitions, startup text analytics company Equivo and in a departure from its history it bought open software company Revolution Analytics.

IBM logoOther companies in the news included IBM who refuted rumours that they would be laying off up to 26% of their workforce, with the explanation it would ONLY be thousands.  It appears that EMC results, caused by the strength of the dollar will result in layoffs there.  Spacex got an injection of $1 billion to help fund its projects, which just might mean supersonic train travel … bring on that Hyperloop!

canadian flagThe US economy seems to be on fire adding more than 200,000 jobs a month, with 240,000+ in December, a growing GDP and lots of positive indicators.  Canada on te other hand thought it had added 185,000 jobs in 2014 … and had to revise that down by a third to 120,000.  Canada’s GDP was down and the unemployment rate sat at 6.7% in December.  Canada’s dependence on its resource base might be cause for concern as we move through the year, given the price of a barrel of oil.

Finally the Global Talent Competitiveness Index tells is that Canada placed 5th in the world, one place behind the US and 2 places above the UK.  Not sure how real that is … but 5th isn’t so bad in the whole world!

January certainly saw a lot of activity and if Canada can take advantage of the strength in the US economy it could bode well.  An increase in the price of oil wouldn’t go amiss either!   That has been my look at the tech news for January … Walk Fast and Smile!
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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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CANADIAN JOB MARKET Review Fourth Quarter 2014

General Observations:

newspaper job sectionEach quarter I try to provide the reader with an understanding of the Canadian job market based on a regular set of indicators.  In addition to public market indicators I use Eagle’s experiences serving our clients across Canada.  The hope is that job seekers will gain some insight about where opportunities might be, and hiring managers will gain some value for their hiring aspirations.

Timing of course is everything, and while this is a retroactive look at the 4th quarter of 2014 I am acutely aware that 2015 has started with a bang, due to oil price dropping like a stone, the Canadian dollar dipping and large retail companies either closing shop or laying off (Target, Sony, Mexx, Holt Renfrew etc).

As of Q4 the employment situation in Canada was looking OK.  The unemployment rate had dropped to 6.6%, from 6.8% at the end of Q3, and 2014 had seen Canada add about 186,000 jobs.  Most of that gain had come in the latter six months of the year.

TSXThe TSX, like most of the markets had been fairly steady through 2014 but as the year ended it had a reading around 14,700 which was down from the 15,500 it had reached at the end of Q3. This was still better than its low point in 2014 which was around 13,700 and as I write this piece the index appears to be staying above that low.

Oil canCanada’s oil sector fell off a cliff in Q4 with the price of a barrel dropping from around $85 at the end of Q3 to less than $50.  What is worse for this sector is there is no short term sign of recovery and forecasters are pessimistic that we will ever get back to the $100+ range.  There are winners and losers with cheap oil but we can expect the Alberta economy to take a hit, and the Conference Board is predicting a recession in Alberta.

dollar splitAnother big employer in Canada is the financial sector, centered primarily in Toronto but with a healthy presence in Montreal. There are many reasons why this sector remains busy including its highly competitive nature, evolving technologies, regulatory change and volatile markets.  I expect this sector to remain busy in the short term.

The telecommunications sector is another big employer in Canada.  The demands on their infrastructure, technology advancements, retiring boomers and expansion into new markets are all drivers of their need for people in addition to the ongoing need to compete in a very competitive space.

ConstructionThe construction industry continues to be a great place to find work, both in the trades and in the head offices of the large companies. There are construction sites in most major cities with infrastructure projects, office towers and condo developments. There will be some fallout from the drop in oil price, particularly since the oil sands are en expensive extraction method.  Time will show the extent of the impact, but if oil prices rebound a bit over the coming months the impact should be minimal.  If the price stays below $50 there will be a big impact.  There will always be demand in the home renovation market, if you have ever tried such a job you will know how hard it is to find skilled tradespeople available.

Parliament building in OttawaDespite the need for governments to contain costs we have seen a fairly steady demand in Federal, Provincial and Municipal Governments.  They are huge employers, and people with the right skills are always in demand. The required downsizing is generally achieved through attrition and there is always work to be done. Regulatory change, policy development and general administrative needs dictate the need for a large and skilled workforce that receives competitive incomes and very attractive pensions and benefits. The wild card here will be the effect of lost oil revenue taxes, so this will be a space to watch.

The Canadian Staffing Index is an indicator of the strength of the largest provider of talent in any economy (the staffing industry) and an excellent barometer of the health of Canada’s economy. The index overall seems to trend down slightly from 2013 but was rebounding slowly through the first three quarters.  Q4 would suggest a slowdown of that recovery and a slip backwards.  Having said that the index is 10% higher than its reading when introduced in 2008 just before the recession.

Here at Eagle we continue to see shortages of “in demand” skillsets, and a steady supply of candidates with skillsets in other areas.  The flow of available talent over the fourth quarter was the same as Q3 and marginally down from Q4 of 2013.  The demand from our clients was down about 10% in the fourth quarter and about the same as Q4 in 2013, suggesting a fairly normal seasonal swing.

More Specifically:

cn towerThe GTA (Greater Toronto Area) is the largest market in Canada with the most head offices and hence a big appetite for professional talent. This market accounts for approximately 60% of Eagle’s business which comes from the major industries here, which include the financial, insurance and telecommunications sectors.  There has been plenty of retail demand although recent events might change that and a fair bit of demand in the engineering space, in addition to a fairly strong construction sector. A large part of the Ontario provincial government is here too, which is another sector that demands talent. This is the city offering the most opportunities in Canada, and where I would want to be looking if I were unemployed.

The Saddledome in CalgaryCalgary is the “hub” for Western Canada as the capital of the oil patch. The city has the second largest number of head offices and the attraction of the low Alberta tax rate (for now).  The current oil price situation has created a ripple in this economy and many oil related companies are cutting back on investment and slowing projects.   Edmonton will also be affected by the oil price as The Alberta Government is dependent on taxes from oil revenues.   Saskatchewan is also generally a fairly hot market for talent but will feel the effect of a lower oil price.  All in all Western Canada is going to be a little slow in hiring, we may seem some downsizing and it maybe some time before it booms again. Having said that, there are always opportunities for people with great skills, and in companies with a large Boomer population approaching retirement.

LighthouseEagle’s Eastern Canada region covers Ottawa, Montreal and “the Maritimes”. Montreal continues to be relatively busy, particularly in the financial sector, the telcos and the construction industry. There will be some impact from the oil price felt particularly in Newfoundland.  This region is typically slower for job creation at the best of times, so I expect it to be even slower than normal until we see an uptick in oil prices

AT Eagle our focus in on professional staffing and the people in demand from our clients has been fairly consistent for some time. That would include Program Managers, Project Managers and Business Analysts who always seem to be in demand. It might just be our focus, but Change Management and Organizational Excellence resources are in relatively high demand too. Big data, analytics and mobile expertise are specializations that we are seeing more and more. On the Finance and Accounting, side we see a consistent need for financial analysts, accountants with designations and public accounting experience plus controllers as a fairly consistent talent request. Technology experts with functional expertise in Health Care is another skill set that sees plenty of demand

Summary:

magnifying glass over the word jobsThe fourth quarter had been following the predictable path demonstrated through 2014 of steady improvement in the unemployment rate and decent job creation. The huge drop in the price of oil right at the end of the year will have a ripple effect but it was harder to spot during the usual seasonal slowdown.  Our expectation is that demand in Western Canada will be down significantly, creating an opportunity for companies to pick up the usually rare “top performers” should they become available.  Companies will want to improve, but not necessarily increase the size of their teams.  There will be some downsizing, we have already seen reduced investment but I don’t anticipate huge layoffs in the short term.  If the price of oil does not improve soon we might see more drastic measures.

There will be an impact on the retail sector with the already announced layoffs due to Target and Sony exiting Canada plus the financial woes of Mexx and Holt Renfrew.  The dropping Canadian dollar will only hurt those companies that import their stock but it will be a boon to Canadian exporters.

Elsewhere the other big sectors such as Financial, Insurance, Telecommunications and Construction should not be greatly affected by the price of oil. As such I don’t anticipate a big decrease in demand in the GTA, other than a “stutter” caused as companies assess the impact on them.  There will continue to be skills shortages in our knowledge economy, partly fueled by the boomers retiring, but also caused by our education system not turning out the right skill sets and the advancements in technology creating a shortage as the skills catch up.

The unemployment rate at 6.6% is better than it has been for more than 5 years, and if we can avoid driving that up too much because of the oil patch then it will be a good sign for job seekers. It should also be noted that the employment rate for professionals is more like 3.5% or 4%, which is very near to full employment. This means that professionals should be able to find work if they are willing to be flexible in their demands.

That was my quarterly look at the Canadian job market and some of its influences.
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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Gain a competitive edge!  Join Eagle’s Executive Consulting Network!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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