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CNN Live Saturday

Interview With John Challenger

Aired January 26, 2002 - 12:47   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: These are very tough economic times for many, and companies are laying off workers left and right it seems, and a lot of people are nervous about their financial futures. John Challenger from Challenger, Gray and Christmas, joins us today to talk about the challenges of finding and keeping a job. Hi there, John.

JOHN CHALLENGER, CHALLENGER, GRAY AND CHRISTMAS: Hi, Fredricka.

WHITFIELD: Well, these are awfully sobering times with 800,000 people, who have lost jobs just since September 11. It seems like it will be tough to kind of make ends meet for an awful lot of people out there, trying to figure out where the jobs are. So, where are the jobs for those some 800,000 people that have joined the ranks of the unemployed?

CHALLENGER: Well it is tougher today. There certainly is a much larger pool of people competing for the same jobs. But one of the things we're hearing people say is that it's a recession. "Nobody wants to hire me. Why should I seek out these companies that are doing poorly, or these companies and industries that aren't well" and yet that's the opposite of the case. You should seek out companies that are in turmoil, because often that gives you room to come in and make a difference.

WHITFIELD: Well, how do you go about doing that? If you feel like these companies are in turmoil, it seems like that's the last place you want to turn.

CHALLENGER: Well that's right, but think about it in terms of your competition. So many begin to say, "well, I'm not going to bother to look at that company. They're probably not hiring anyway." So that gives you a better chance.

So look for companies where there are new presidents or management teams that have come into place and they're changing things. Look for companies that are having problems on their -- in the papers with their company operations, maybe even doing downsizing.

Today, companies just aren't, you know, flipping the switch one way or another. They're just too complex. Sometimes they're hiring. In parts of their company, they're hiring. In other parts, they may be letting people go. WHITFIELD: All right which begs the question, does this mean that people need to be a little less specific about what kinds of jobs they're looking for? That perhaps this might be a time where, you know, they're giving themselves room to explore other options?

CHALLENGER: Exactly right. In the fourth quarter of 2001, we saw a big jump in the number of people who are switching industries. It was 41 percent switched industries in the third quarter, and it jumped to 56 percent of people rotated out of the kind of companies that they were in, into new organizations. Often, in fact most of the time, doing the same type of work, same field.

For example, if you were in human resources, you could do that for a manufacturing company, but you could leave that and go to a health care company and do the same kind of payroll and compensation and hiring. So people were switching industries.

WHITFIELD: But another argument is, the flipside to that is, some folks may feel like they're applying for jobs that they're essentially over-qualified for and they may not be seeing the same types of salaries, and that alone might be discouraging. So how is the economic really being helped?

CHALLENGER: Well, people tend to stay at the same level. They should look for jobs in all kinds of different industries, but they should expect to find jobs a little bit below, a little bit above the same level they were at. Most companies are reluctant to hire someone for a big step down, because they're convinced that person is going to continue to go out and look while they're at work.

They're also not going to give the person a promotion, because there will be another 100 candidates out there who have good experience, who have been at that level. Say you're a director of sales, it's not a time to take a big jump or take a big step down because you think the market may be bad.

WHITFIELD: And John, quickly, an awful lot of people who are lucky enough to be able to go to new jobs are saying to themselves, "I'm not so sure about 401(k) anymore. What do you tell folks who are going to be new hires, who have the option of a 401(k)? How do you encourage them that they still need to think about their retirement planning?

CHALLENGER: It's so important that you prepare for what you're going to do when you leave work in your 50s or 60s or even 70s. That means investing in that 401(k). You certainly can put it into safer options.

Many people have seen their portfolios, because they were heavily invested in the market or even more in the new economy, and they lost a lot of value. So conservative investments, money market funds, bond funds, those are certainly a better idea.

WHITFIELD: And perhaps if their new employees don't offer those other retirement package options, that perhaps they need to be going to the basics, like a bank, right? CHALLENGER: Sure. Seeking to make sure that you have your savings diversified amongst a number of investments, banks, CDs, some stock, but that way in diversifying, you spread your risk. That's a very important long-term financial strategy.

WHITFIELD: All right, John Challenger, thanks very much for helping us to sort out what seems to be a very complicated period for all of us right now, particularly financially with so many changes in the job market. Thanks very much.

CHALLENGER: Thank you.

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