I’ve been in the staffing business for 25+ years, the last five with the firm I founded to recruit for companies from Startups to the Fortune 100. I HAVE NEVER SEEN ANYTHING LIKE TODAY’S LABOR MARKETS.
There are currently 10.6 million unfilled jobs in this country and approximately 6.3 million people unemployed. So, if every unemployed worker were a perfect match for one of the open jobs, we would still have over 4 million openings. The startling news is this is not a transitory phenomenon. The US birthrate is at an all-time low and immigration rules for qualified workers are a political hot potato. Face it, we have a structural lack of talent in this country that will be with us for at least the next generation with no real near-term solutions.
As it is, almost everyone even marginally qualified to work can find multiple opportunities and the competition for top talent has never been fiercer. At my company, we filled hundreds of positions in 2021 and 95% of those were situations where we placed someone that was already gainfully employed with another company. That’s right. They weren’t even considering changing jobs when we reached out.
Success in the competition for talent is going to require a very different mindset and strategy versus what has worked in the past. So, what are the implications for companies and hiring managers today?
Expect to Pay More to Find Talent
A stark reality of the current talent acquisition market is that, if you need average to above average talent, you are going to have to budget more than you have in the past to get it. Three costs to consider are internal recruiting costs, external recruiting costs and the cost of having open positions.
Internal Recruiting Costs
At some point most organizations realize they are going to need to invest in someone to lead, manage and execute their recruiting strategy. Keep in mind the competition for good recruiters and talent acquisition leaders is just as intense as it is for the rest of the market. Look for someone that has experience with actively seeking out talent and not just managing job board postings. Be prepared to pay six figures for a quality leader.
External Recruiting Costs
If you are growing, are in a high turnover industry, or got caught up in “The Great Resignation” you will quickly find that you cannot hire enough recruiters to keep up with your demand. Even if your budget would allow for multiple recruiters, the question becomes, “What do you do with them once the openings are filled/manageable?” Finding an external recruiting partner that can ebb and flow with your needs and can partner with you as an extension of your team should be a key element of your strategy.
Cost of Having Open Positions
If you think you can just hunker down and weather the storm until conditions improve, take a minute to calculate the cost of open positions. Projects slowed or undone, stress on managers and coworkers, and lower morale are all part of the cost equation.
Decide What You Have to Have versus Nice to Have
Know what you need before you start searching and the difference between a need and a want. It is critical that you take the time to identify the essential job functions and any deal breakers at the start of the search. Knowing the difference between “have to have” and “like to have” will allow you to be more decisive and increase your chance of landing a good candidate.
We run into clients and hiring managers every day that still think they can use the recruiting process to educate themselves on what they are looking for. Because they don’t trust their recruiters or just have had that luxury in the past, they ask for a slate of candidates to be able to pick the best one. This is almost always a guaranteed way to lose good candidates. While you are evaluating your list at your own pace, your best choice has already accepted a position with someone else. We see it happening on a weekly basis.
Cast a Wider Net
In the past, employers had the option of posting openings on job boards and then sifting through applicants looking for backgrounds with a similar job, same industry, and similar experience. Welcome to 2022 where you can post a job, get a thousand applicants, and not one is even close to being qualified (It’s because the good people are already working and not looking).
Today, especially in certain geographies, you will need to look for similar skill sets and the ability to learn and adapt as part of your criteria. This opens a whole new candidate pool (with the caveat that it is going to require a little more effort than what you are used to getting them up to speed). The upside is that the investment to help them learn and grow is relationship money in the bank. Potential sources should include:
- Internally, in other departments requiring similar skills
- Other industries
- Other external positions requiring similar skills
- People with disabilities
Be Ready for a Courtship
Remember that in this market, your recruiter has most likely approached the candidate and not the reverse. This scenario creates a whole different dynamic in the communication and interview process. Politeness, punctuality, and pleasant interaction are always effective elements of a candidate experience. They can be a make or break factor now. Also, a courtship does not mean they have to meet your whole family. A long burdensome interview process can be a deal-breaker for some candidates. The same goes for slow responses and missed interviews. Delays, a lack of urgency and low engagement will all lose valuable talent.
Once starting the interview process, try to offer the first candidate that meets your well-thought-out criteria. You will lose candidates and create tremendous frustration with your recruiting partner if you cannot be decisive. Some things to consider:
- Trust your recruiter. If they are competent, they have screened multiple candidates and only sent you the best match available
- Remember the candidate is already in a relationship
- They don’t need your job
- They will probably not make a change unless they feel good about all aspects of the opportunity
- Once you have determined they have the skills you are looking for, be ready to woo versus grill
- Be decisive; make the ask as soon as you/your team determine they are qualified
Compensation rates are evolving rapidly. We are being asked regularly by our clients to give them feedback on what are the market rates for compensation for the positions in their geographic location. Having invested in creating salary ranges, even if created in the last 12 months, does not guarantee you will be competitive in the current market. In certain highly competitive positions in select markets, we have seen recent college graduates command six-figure salaries. Total compensation in all positions has gone up 10-15% in the last 18 months. We have recently declined to work on certain positions because the compensation was just not competitive. Consider the following when crafting your offers:
- Be aware of market rates (not just your internal salary bands) before offering
- Evaluate cost of non-acceptance
- Be competitive in your offers or don’t anticipate success (hope is not a strategy)
Expect Competing and Counteroffers
Once you have made your offer, it’s no time to relax. Explore with the candidate what other options they are considering and give them a specific time frame by when they need to respond to your offer. You and your recruiter should prepare candidates for the prospect of their current employer making a counteroffer and make sure they have pre-thought their response. We counsel candidates to keep their resignations short and to the point to avoid emotional conversations.
- Time limiting the response will give you peace of mind and encourage the candidate to be as decisive as you were in making the offer
- Current employers will often go to great lengths to retain their talent at the point of them leaving. Reinforcing with the candidate their reason for considering your position in the first place will often head off these counteroffers.
In short, finding and engaging top talent in today’s market is more challenging and costly than it has ever been. With the landscape unlikely to change for decades the wise will have a strategy and a plan that allows them to survive and thrive against their competition.
Finding skilled candidates to fill your open positions is what Pivotal does every day. Our recruiters specialize in cold-calling currently employed, highly qualified prospects and encouraging them to explore your open opportunities. Contact us to find out more.