August 11, 2022

Credit departments must find creative strategies to hire employees in 2022 because the pandemic changed the work environment. The employee quit-rate in the U.S. reached a 20-year high in November 2021, according to the Pew Research Center, and businesses continue struggling to retain staff.

Researchers call this current hiring crisis the “Great Resignation.” Job candidates have more leverage today as they search for higher compensation and work-life balance, making the hiring process much more difficult for employers. “In virtually every sector, employers are asking themselves, ‘Where have all the workers gone?’ Now, possibly more than ever, learning how to find employees is crucial for any manager,” reads an article about finding employees online.

With all the factors that contribute to turnover rates today, companies have no choice but to find new and creative ways to obtain new employees. In a recent eNews poll, respondents said they use job websites or staffing companies—at 63% each, while 50% use recruiters.

Senior credit analyst, Brandon Nickoli, of Cenovus Energy (Dublin, OH) said their recruiting team and referrals to the company job posting site have been reliable ways to attract potential hires in the past. More recently, social media has served as a successful candidate searching tool, Nickoli added.

Posting jobs on sites such as LinkedIn allows everyone at the company to share openings—not just HR, he said. “It also allows a potential candidate to ask questions of current employees before deciding whether to submit an application. I’ve found it increases the applications we receive.” Most poll respondents stated that job websites have been their main way to source credit staff, whether through Indeed or LinkedIn blasts. In some cases, companies prefer direct referrals from existing associates in order to vet those who have direct experience tailored to the job description.

Using jobsites versus recruiters has pros and cons when it comes to obtaining new staff, said Chris Myers, president and CEO of Professional Alternatives (Houston). Job websites will draw in anyone from any work background, even if they may not have credentials that accurately align. “You get low cost; you get a subset of the market or a very smaller percentage of the market; and you get inundated; but those are the tradeoffs,” he said. Recruiters on the other hand are great for directly seeking out candidates that match the job; however, it can be more costly.

In terms of turnover rates, both Myers and Nickoli offered some perspective about placing an emphasis on employee retention. Many workers today are willing to change jobs if they do not feel properly compensated. A toxic corporate culture is 10 times more likely to contribute to attrition than compensation, according to a MIT Sloan study on top predictors of attrition during the great resignation.

“Improving corporate morale and providing a comfortable work environment are just two of the necessities to retain talent,” Nickoli said. “An employee must feel wanted and be fairly compensated so they don’t start looking elsewhere for work.”

Natural disasters caused roughly $35 billion in insured losses (22% above the 10 year average) and $72 billion in global economic losses in the first half of 2022, according to Swiss Re. “The effects of climate change are evident in increasingly extreme weather events such as the unprecedented floods in Australia and South Africa,” Martin Bertogg, head of catastrophe perils at Swiss Re, said in a press release. “This confirms the trend we have observed over the last five years; that secondary perils are driving insured losses in every corner of the world.”

Severe heat waves damaged infrastructure in Europe; floods destroyed businesses in Kentucky; and heavy rain battered South Korea. And the rest of this year’s hurricane season is expected to be more active than normal despite a quiet start. The average Atlantic hurricane season peaks in August, September and October, with 95% of major hurricanes occurring after Aug. 1.

“Although it has been a relatively slow start to hurricane season, with no major storms developing in the Atlantic, this is not unusual and we therefore cannot afford to let our guard down,” FEMA Administrator Deanne Criswell told CNN. “This is especially important as we enter peak hurricane season—the next Ida or Sandy could still be lying in wait.”

As severe weather events become more common, the construction industry will play a pivotal role in disaster preparedness and recovery, said Brian Turmail, vice president of public affairs and strategic initiatives at Associated General Contractors of America. “There is a significant market opportunity for the construction industry for investments in resiliency. As more and more communities look to raise road levels, put in higher surf breaks, look for better ways to handle storm water drainage or look to make buildings more energy efficient; that means new construction opportunities for the industry.”

Some disaster-proofing projects are federally funded and can take decades to complete. But private companies also can choose to prepare for natural disasters on their own, said Kurt Sorensen, CCE, CEW, CICP, credit and collections manager at Entergy (New Orleans). “We are starting to see more interest, at least in the utility space, in what they call resiliency of the grid. [Businesses] are trying to prepare by finding ways to harden transmission lines.”

Companies also look to the construction industry after a disaster hits, which can create a profit opportunity if approached carefully, Sorensen added. “On the back end, natural disasters can promote more construction. But on the front end as a material supplier, your customer’s clients may be wiped out and no longer exist. You're about to be bombarded with opportunities, but the risk profile will be elevated.”

Sorensen recommends the following as a credit professional handling the fallout of a natural disaster:

• Call your customers immediately to make sure they are okay and continue to follow up.
• Stick with your established customers.
• Avoid the temptation of working with new customers that are looking to profit off the disaster.
• Check with your insurer to see if you can capture bad-debt write-offs that are storm related.
• Make sure all your liens are filed properly.
• Have regular conversations about risk management.
• Create a detailed disaster plan for credit management.

If you’re going to work with new customers, you need to gather as much information as possible, said Tim Stine, controller at Stine Lumber LLC (DeRidder, LA). “We are set up to accept credit cards or open a cash account to help new customers if needed. During a disaster, sometimes our own offices are running on generators and we can’t always check credit agencies on new customers, so we do everything we can to protect ourself and help customers at the same time.”

Peak shipping season traditionally starts around mid-August and runs through October, driven by back-to-school and holiday shopping. But like last year, supply challenges and port congestion are expected to cloud the season.

“This year is seeming again to be a year of ‘extended peak’ in the North American ports due to continued import volumes and associated port congestion,” Sarah Banks, managing director and global freight and logistics lead at Accenture, told Logistics Management during a roundtable.“ As we have not yet experienced a stabilization period following the pandemic chaos, it would be difficult to classify 2022 peak season as a normal, annual occurrence.”

On one hand, some companies have excess inventories and have shipped product early in a race to beat delays. This would suggest a weak peak season, said Philip Damas, director and head of the supply chain advisors practice at London-based Drewry, during the roundtable. But on the other hand, “we also hear that other importers and the National Retail Federation expect cargo volume to remain high as we head into the peak shipping season.”

FedEx set an unusually early start date for surcharges associated with peak season. The fees will kick in on Sept. 5, compared with the typical start date in October, per FreightWaves. “The earlier start date reflects the growing relevance of delivery surcharges to the company’s year-round financial performance.”

Even with a slowdown in consumer spending and shipping volumes, delivery is still expected to take longer than usual. It will take some time before backlogs are resolved and more shipping containers are made available. “Global shippers should be prepared for volatility in the coming quarters,” Peter Sand, chief shipping analyst at ocean and air freight research firm Xeneta, told CNBC. “I think patience is required, not only in terms of understanding how market dynamics constantly develop, but certainly also to realize that no two markets are alike.”

Port congestion is growing, especially on the East Coast. July volumes at the Georgia Ports Authority are up 18% year over year. “As more vessels and cargo heads East, there’s been an 11.9% increase in volumes so far this year, with a 7.3% year-on-year increase in May alone,” Sand told CNBC. “This pressurizes capacity, and there’s a price to pay in terms of reliability. So, in a way, the East Coast becomes a victim of its own success and the West has the breathing space to recover somewhat.”

According to a global generations study by Ernst & Young, 46% of U.S. managers have been managing for over 10 years, and most have not received any type of training to develop their leadership identity. The belief is that because this individual was a star performer, has seniority, is a subject-matter expert, a rainmaker or a technician, they should be equipped to lead others. This tacit assumption leads to leadership dysfunction. The star performer micromanages instead of coaching others. The subject-matter expert knows it all. The technical operator is overly aggressive, and the one who got promoted due to seniority still feels like “one of them.” 

No matter what the context, newly promoted leaders often find themselves unprepared for what’s required of leadership: making difficult decisions, initiating difficult conversations about performance or behavior, coaching others and holding the team accountable. At the root is leadership identity. Here are five steps to building a new leadership identity. 

1. Uncover your narrative

How do you define yourself? Are you a “hard worker” or a smart worker? Do you define yourself as a hard worker, or just “one of them”? How do you behave under pressure? Do you have the courage to initiate difficult conversations, or are you more of an avoider? Increase your self-awareness to build identity-based habits. Notice what you think, say and do. What would you have to tell yourself to behave as you do? Behavior is your narrative acted out. Behavior drives identity. 

2. Define leadership

Think deeply about what it means to be a leader in your organization. The more you think about leadership, the easier it will be to identify with being a leader. Your organization may have a definition for leadership; nonetheless, you need to create your own personal definition. For example, my definition for leadership: If leadership is about anything, it’s about alignment, and alignment is about focusing energy. From this definition, I know that if I’m engaging in unproductive conversations the “energy” is unfocused and it’s my job to course correct. Your definition of leadership might include servant leadership, compassion, innovation or teamwork. Design a definition, and see if you can align to and live from that definition.  

3. Claim your values

When listening to others, it doesn’t take long to know what a person’s core values are. They say things like, “I want to be fair” and “It’s my goal to create autonomy on the team.” Yet, it’s difficult for most of us to declare our top two values.

One of my top values is personal responsibility. This value shapes my behavior. (When I complain, it means I need to stop blaming and start choosing.) Deciding on two top values makes decision-making easier and helps you to course correct early. What do you really value? Fairness, equality, compassion, service, integrity, creativity or innovation? There are thousands of values to choose from, but values don’t live on a website. Each value has a price to pay when it comes to living and leading from the value.

4. Envision a new future self

Who do you want to be? The key to creating a new identity is to stop living from your memories of the past and start living from the vision of your future. Picture your future self and how you lead. When you come up against conflict, how do you behave? What’s holding you back now? 

My work here is influenced by Dr. Benjamin Hardy and his book, Personality Isn’t Permanent. His work confirmed what I had been practicing in my own life and with my clients for years: We all have choices about who we want to be and what we wish to co-create; we just need a path to get there. One method I teach is to journal about your future self as if you are already that person. In your journaling, include what it feels like, how you make decisions and how you feel emotionally. (It’s important to connect your vision of the future with the emotions you want to experience to make it manifest easily.) Thought plus emotion equals a new vision for your future self. 

5. Build leadership confidence  

Leadership confidence is not built on appeasing others, avoiding conflict or using aggression to get your way. Leadership confidence is built on integrity, experience and trust. Integrity is about living in alignment with your values. Experience is about the small wins that tell you you’re growing. Trust is not as much about trusting others as it is about trusting yourself. Self-trust promotes trust in the workplace. Trusting yourself grows as you face reality, tell yourself the truth, keep promises and make decisions in alignment with your organization and with your own values. Leadership confidence is an internal compass that never lets you down.   

If you’re struggling with your new leadership role, it’s likely because you haven’t formed a leadership identity. Even if your organization doesn’t offer leadership development, you can still intentionally create your own identity for the purpose of increasing your capabilities.

Marlene Chism is a consultant, international speaker and the author of Stop Workplace Drama (Wiley, 2011) and No-Drama Leadership (Bibliomotion, 2015). This article first appeared on Smartbrief. Reprinted with permission.