Lobue News: Aug 30, 2018

Unemployment is Down; The Good and The Bad

THE GOOD: Unemployment is down, and that is good news for the economy. Total unemployment, known as the “U-6” rate is down to the lowest level in years and The U.S. had 6.66 million unfilled job openings at the end of June, the most since 2000. Coupled with latest earnings reports, there is support for continued growth in the economy. Investors are certainly hoping that continued good news in the employment numbers will allow the economy to continue its expansion. 

This is good news, especially that the broader employment index (a truer measurement of employment) continues to show improvement. This also offers some challenges as wages increase and employers continue to fill open positions.

THE BAD: Increasing wages spurred from low employment does come at a cost, however, and poses a challenge for businesses. Something has got to give as fewer people are available for needed jobs. Businesses will have to find creative ways to counteract both the lack of available staff and increasing wages. Already, productivity has risen, showing that businesses are finding ways to be more productive, or absorbing whatever slack had existed. Becoming more productive, capitalizing on existing staff and technology, will be necessary to avoid having to offer higher wages and more benefits, and incur higher recruiting and training costs.

THE OPPORTUNITY: Increase the output of existing resources with a LoBue Group “human resources enhancement program”. Realize top line growth through improved sales productivity. Absorb new volumes with existing staff and improve service. Reduce unit costs and improve margins.

About The LoBue Group methodology and background:

As a consulting firm, we often get calls from clients when they have staffing pressures, either due to increases in volumes or stagnant volumes. In either case, measurement and adjustment is necessary. While growth is a good “problem”, staff additions and wage increases can undermine the profitability opportunity. The LoBue Group has a 35-year proven track record of fixing this problem.

Supporting efforts for continuous improvement, staff development and efficiency will improve customer experience and reduce unit costs in the long run while avoiding negative impacts associated with rapid staff growth.

  • Predict the future with models that demonstrate the impact of volume swings
  • Always know how your employees are performing
  • Improve efficiency

Staffing and resource models demonstrate the need that is required in the current environment, and should also be used to determine staff that will be needed under future conditions. Knowing the resource requirements throughout an entire value chain will uncover bottlenecks and demonstrate weak spots that need attention before they demand attention. Product managers should know where weaknesses lie in order to ensure they can meet the expected demand. Operations managers should understand future impacts to invest properly in technology. Understanding current needs is a given; using resource models to be predictive will improve service and reduce future staff needs.

Performance Management is always important and knowing individual staff performance is critical to understanding your true capacity. Having a full view of individual performance allows a business to recognize top performers and understand better what drives performance. In turn, this drives the processes of improving the rest of the staff, and acting more quickly to remedy low performance.

A business should always be in the mood for hiring if they are fortunate to attract someone who can improve their team. And, be ready to let someone go if they are not the right fit. It is a fair approach that can only be done if there is proper insight to actual performance. Hiring is a long-term commitment, and like long term value investing, you want to be a buyer when few others are. The best way to accomplish this is to always know your true staffing needs. Develop methods to limit hiring when everyone else is, and always be ready to hire that special person at any time. 


Committing to efficiency is a critical factor to avoid being pulled into the low unemployment, high wage recruiting environment. It has been decades since employers have faced such an environment and this provides a new perspective on the importance of being ultra-efficient. Keeping up with wage growth will be enough of a hit to expense, and upgrading staff will be more difficult. Reducing your need for staff will avoid cost and make it more palatable to add quality staff when the opportunity arises. Higher productivity is the counterweight to a difficult labor environment. Making continuous improvement a pervasive practice in an organization gets everyone involved in overcoming a bigger challenge of keeping up with customer demands and market conditions.

Simple Ingredients

Straight-forward solutions are the best kind to improve results. Market conditions are always changing and it is difficult to predict where exactly it is heading. Predictive resourcing models, performance management and continuous improvement efforts are three straight forward tools that go hand-in-hand to overcome current and future labor market challenges while improving the bottom line.

Some successes from The LoBue Group:

  • A card processor was growing over 50% annually and was facility bound. LoBue Associates recast their sales, service and processing environments, providing a 100% volume increase without adding a single staff to the team.
  • A prominent Trust Bank had an industry leading Unit Investment Trust Business that was hamstrung because of a lack of trained sales persons. LoBue Associates recast their sales and service teams and allowed for a 200% increase in sales over an 18 month period while reducing staff by 20%. 
  • A chain of Dental Clinics planned on a roll-up of 200 clinics. LoBue Associates recast their front office and clinician support staffing to avoid hiring 400 additional staff from the base line projection.

Give us a call and we’ll tell you how we can guarantee you pleasing results for your business.

Carl LoBue, Jr.

President, LoBue Americas