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2019 Mid-Year Employment Market Update

Staying abreast of the employment market landscape is a crucial part of successfully navigating the recruiting industry. This includes observing trends and economic impacts on companies, hiring forecasts, and job candidate behaviors. Being in the trenches on a daily basis allows external recruiters to focus on what is evolving as well as what remains stagnant. As a result, they can promote more successful candidate sourcing and ultimately better hires for client companies. As such, it is important to be able to provide market updates on a regular basis.

As we approach mid-2019, it appears that the booming labor market will continue to flourish. Personal incomes are rising, payrolls are increasing, and overall consumer spending is up; all indictors of a continued strong economy. In addition, the number of new jobs being added each month continues to be higher than economists’ expectations. 

Predictions going into 2019 have been noticeably accurate in terms of employment market trends. Here is what we are seeing as we move into the summer months:

  • Remarkably Low Unemployment: The U.S. unemployment rate recently fell to a 49-year low, coming in at 3.6%. There is, however, an interesting finding to note on the unemployment numbers. Although they are the lowest they’ve been since 1969, part of that is attributed to steady decrease in “labor force participation.”  That means that fewer people are working or looking for work for a variety of factors.
  • Help Wanted: Over 60% of US employers are, or plan to, hire additional full-time, permanent workers moving forward. Job openings are at an all-time high, recently hitting 7.5 million according to the Bureau of Labor Statistics. This is further complicating the ability for companies to source and recruit qualified talent as the concept of supply and demand is at play.  More jobs than people to fill them.  The demand for highly skilled jobs and technology-related roles continues to trend upwards with no end in sight.
  • Wage Growth: Salaries continue to rise as employers struggle to retain top-performers and to attract new talent. Along those lines, more companies are offering signing bonuses than ever before. As good employees have options, employers are faced with making the strategic decision to evaluate compensation plans.
  • Perks Galore: More and more employers are using incentives to attract and retain talent, irrespective of company size or industry. Companies are offering employee discounts, the ability to work remotely, and/or implementing flextime, etc. Perks in the office are also becoming mainstream: casual dress, ping-pong at lunch, free soda and beer on Friday. Companies are becoming very creative in ways to engage employees and improve job satisfaction. 
  • Non-traditional Jobs: “Gig Work” continues to increase. “In a gig economy, temporary, flexible jobs are commonplace, and companies tend toward hiring independent contractors and freelancers instead of full-time employees.” The Bureau of Labor Statistics reported that 55 million people (more than 35% of the U.S. workforce) are gig workers. That number is projected to jump to 43% by 2020. “Blended Positions” are also becoming more prevalent in that many job functions are intersecting with other areas creating dual roles, at best.  Employees are being asked to wear multiple hats many times due to vacancies and talent shortages, blurring the lines of traditional job functions and titles.

The now well-established, candidate-driven employment market (no longer a trend, but the standard) has settled across nearly all industries and positions.  The well-fought war for talent has turned into an outright crisis for most organizations.  Nearly 75% of employers have difficulty sourcing candidates, and 45% are unable to find talent with the appropriate skill sets.

As a result of this crisis, companies who never considered using external recruiters are now realizing the value in forging this type of strategic partnership to assist their recruiting and hiring efforts.  30% of hiring authorities in a recent study said use of external recruiters has either somewhat or greatly increased over the past year.  At a time when companies are struggling to fill open positions, building a relationship with a trusted recruiter who understands company culture—as well as the soft and hard skills required to successfully perform a job—allows organizations to focus on company goals outside of recruiting the talent needed to bring that to fruition.

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Don’t Let Good Candidates Slip Away

Searching for and finding the right candidate for a role has never been more challenging than it is today. So why are so many companies letting good talent slip away when it can easily be prevented? The simple answer is that they continue to drag out the interview/ hiring process and as a result, candidates walk away. Job seekers and especially passive candidates who are not actively “looking” have a lot of control these days given the nature of the employment market; more open jobs than people to fill them, the increase in highly skilled technical roles and overall economic growth across many industries leading to new job creation. High demand, short supply. Companies can examine internal processes and make adjustments that will impact their ability to not only attract the right people, but also close the deal before these favored individuals go elsewhere.

Candidates are removing themselves from the interview process because it takes too long. It happens every day. Many corporations have developed a nasty habit of implementing process and procedure over common sense in terms of hiring. Keeping in mind that if your organization is interested in an individual, then likely, there are four other companies interested in them as well at any given time. Why would he/ she spend months waiting for an offer? They won’t. They give up and move on. There is some compelling data to back up this claim as the Time to Hire survey points out:

  • For almost six in 10 workers (57 percent), the most frustrating part of the job search is the long wait after an interview to hear if they got the job.
  • Nearly one-quarter (23 percent) lose interest in an organization if they don’t hear back within one week after the initial interview; another 46 percent lose interest if there’s no status update from one-to-two weeks post-interview.
  • When faced with a lengthy hiring process, 39 percent of survey respondents lose interest and pursue other roles, while 18 percent decide to stay put in their current job.
  • Nearly one-third (32 percent) said a protracted hiring process makes them question the organization’s ability to make other important decisions.

When candidates walk, not only does it leave the hiring organization high and dry, the position is STILL open and they have to start the process all over again eating up time and resources, but there are other destructive effects as well. Here are just a few examples:

Burden on current employees; If there is a vacancy, someone must pick up the slack. There is no other way around it. If a company wishes to proceed with business as usual, the job must get done. The longer the role remains empty, the greater the stress on current employees. Stretching staff too thin not only leads to lower quality work, but also resentment and overall job dissatisfaction.

Blemished company brand; On-line reviews are here to stay. If an organization has a clunky, disjointed or overly lengthy interview process it will be revealed outside of the organization. Spend anytime on Glassdoor and you can find negative reviews on companies and this includes the candidate interview experience.

Loss of revenue; Each employee contributes to the overall organization’s success. When there is a vacancy, that individual’s contribution disappears including their innovation, production and ultimately revenue. The longer the role sits open, the impact increases.

Of course, hiring the right person is top priority and should never be rushed. That is why company’s implement well thought out strategies to make sure this happens. Hiring the wrong person comes with disastrous effects as well. The key is to finding the best method to move in a timely manner in order to attract and secure the best qualified, best fit candidate. Always, ALWAYS, keeping in mind that good people, desirable talent have options in the current marketplace. They simply are not going to wait too long when they have other opportunities knocking at the door.

After evaluating the hiring process, the next step is to tighten up and eliminate excess time which may be costing the organization to lose out on highly sought-after candidates. There are ways to revise and improve upon the process.

1. Thoroughly and thoughtfully clarify the needs before starting the recruiting process. What are the obstacles in place that would prevent you from hiring someone right away? If the timing is not right, why? Would it make more sense to wait until all the pieces are in place?

2. Get everyone on the same page. Organize the decision makers and hiring managers from the beginning. Make sure everyone is clear and in agreement on the details; job description, salary, start date etc.

3. Interview with purpose. Remove time wasting challenges. Consider the available technologies of the day to speed up the process. Many times, initial interviews can be handled over the phone or via SKYPE or Face Time. Piggyback interviews on the same day. Time is a precious commodity for everyone. Think of it as interviewing smarter, not harder.

4. Engage, engage, ENGAGE. It is imperative to keep the lines of communication open with candidates. After each step in the process, provide feedback to your recruiter. Positive or negative, candidates want to know immediately what is going on. If they do not receive feedback, they naturally assume there is no interest and those other opportunities become more attractive.

5. Present the offer. If you want to hire the person, close the deal! Move on making a verbal offer (at least) as soon as possible. Even if it is presenting with stipulations and contingencies. This shows good faith and interest. The Devil is in the details and candidates understand this, but once an offer is on the table, they are far less likely to walk away.

6. Use your recruiter. Last but not least, remember that your external recruiter is your partner in this process. Use that relationship to gain valuable insight. Ask for constructive criticism if you see you are losing talent. It is just as important to them that you find and hire the best person for the job. Another way to leverage this partnership is to understand that your recruiter can assist with the negotiations and assist you in creating and presenting a compelling offer that will help lock-in the candidate. Consider the advice and tweak internal procedures to improve the overall success of the process.

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Recruiting and Focusing in on Candidate Motivation

One of the key factors in successfully recruiting top-level talent lies in the ability to consider and understand the motivation behind one’s desire to look for a new job. It becomes even more important in today’s market because not all candidates are actively searching. Homing in on what is important to candidates goes beyond the traditional focus on compensation packages and benefits. It requires a much deeper conversation and the ability to actively listen and gain as much information as possible.

Reasons and circumstances can be very individual however there tend to be several general, top motivators which nearly all candidates identify with when considering a new career opportunity. Often candidates are not even outwardly aware of the root driving force behind them but realize there is underlying discontent in their current situation. Otherwise the door to new opportunity would remain closed. The difference between a highly skilled recruiting professional comes in the ability to be able to speak candidly with candidates and together discover and address these issues.
After years of talking to candidates, there seem to be 6 top reasons that always arise in conversations. Keeping in mind they rarely stand alone and most often are a combination along with other individual factors.

1. Overall Financial Goals: This one is no surprise and will likely remain top of the list indefinitely as it has throughout history. This includes not only compensation, but all perks and benefits. It is clear that in today’s culture, employers are having to up the ante to retain good talent. And candidates are aware that the job market is tight, and they have options to go elsewhere. The grass IS greener on the other side in many cases. Higher salaries do drive motivation and that cannot be ignored.

2. Personal/ Professional Development: Having a satisfying career generally entails being able to grow and evolve professionally. Being challenged within a role and learning new things is intrinsically important. Remaining stagnant and under challenged in a role will drive many individuals to seek other opportunities. Going through the motions day in and day out leads to boredom, frustration and even a decrease in self-worth.

3. Location: Often candidates will consider changing jobs simply for the fact that the new opportunity is in a better suited location. “In the U.S., the average, one-way commute time is 26.1 minutes, according to the U.S. Census Bureau. If you commute to a full-time, 5-day-a-week job, roundtrip that adds up to 4.35 hours a week and over 200 hours (nearly nine days) per year.” Most metropolitan areas are easily double that length. Over the course of a career, it is no wonder why people will seek out a job in effort to decrease commute time.

4. Job Security: Feeling secure or stable within an organization is not always easy. For example, emerging technologies and the increase in technical requirements to successfully do one’s job can lead to a feeling of insecurity. Mergers and acquisitions are another prime example of organizational change that can lead many to worry about their job security. Time after time, this reason is close to the top in terms of motivating candidates to consider new opportunities.

5. Career Progression: “I feel stuck. “OR, “There’s no room for growth in my current company.” This sentiment echoes daily in the recruiting industry. Many flat organizations simply do not have the structure to allow for career progression. Eventually, top-level talent may become frustrated by not having the ability to advance. This rings especially true in the candidate-driven market as they are aware of better opportunities. In addition to this, many Millennials desire a clear outline to show career progression (also referred to as “career pathing”). This has become more of a standard practice for many organizations and candidates will in fact turn down opportunities if it is not offered.

6. Culture: Nothing can lead to overall unhappiness at work faster than a poor company culture. Co-workers, team members and management can ultimately drive retention or drive employees out the door. Spending 40-50 hours per week with people you do not mesh with is more than challenging. Candidates are becoming hyper aware of this and as such this has become a very important recruiting conversation. In a 2017 survey of 2,000 employees, almost half (43%) said they are looking for a new job, and corporate culture was the main reason. And that number continues to rise.

As a professional recruiter, it is more important that ever in today’s employment market to truly understand a candidates’ motivation behind considering a new role. And although individual reasons and circumstances will always vary, knowing that there are a few key motivators can guide the conversation in the right direction. Having upfront, clear communication surrounding the candidate’s values and goals, is paramount in being able to identify “the right” person for the job, ultimately leading to higher retention rates and greater organizational success.

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