A Candidate's Market
Just a few years ago, the search industry was down 50% from the previous year. Unemployment hit 10%. Companies were shedding people. Replacement hiring - only if really needed. Interestingly, candidates would not return calls - they were 'hunkering down' if they had a job. If they were unemployed/in transition, they would apply for every job they found.
2014 - what a difference a few years can bring. While the news still reports higher than wanted unemployment, the market has improved substantially. The retained executive search industry stands (again) as a leading economic indicator - we are seeing strong labor demand. Candidates we contact are returning our calls - and open to hearing about opportunities. Opportunities - NOT just one - are what they say they are hearing about. We are often the third or fourth call they have received about varying opportunities. (As a retained-only firm, all of our work is exclusive - meaning the candidates we talk with are hearing about multiple opportunities with multiple companies.)
Each Friday, I check out the latest articles about recruiting on ere.net. An article from last week caught my eye. The title is Big Challenges for Recruiting Leaders - The Top 10 Upcoming Recruiting Problems (article by Dr. John Sullivan). I am drawn to articles with lists - they can be easy to read/digest in a world of information overload. I immediately stopped at point #1 - we are seeing it daily (remember the article's title):
- Not being prepared for the return of intense recruiting competition
It has (again) become a candidate's market
I started writing the above sub-headline with the word BECOMING rather than become. The market has changed - and quickly. There were a few interesting themes in point #1 (listed above) that need to be mentioned.
What IS the unemployment rate?
The federal government posted the rate for March on April 4th - the overall rate is 6.7% (high by historic standards; a huge improvement over just a few years ago). The rate we track is different - for people that have a four-year degree (or higher) and that are at least 25 years old. Their rate - 3.4%. (See http://www.bls.gov/news.release/empsit.t04.htm for information on unemployment by education level.)
Back to the article . . . . . .
Most corporate recruiting functions are not ready to get back to a War For Talent orientation, yet that is what we now have. Candidates are aware of this - they are receiving the calls from recruiters and/or seeing the job postings on company websites. Companies are only seeing their own postings and assuming candidates will flock to them for easy picking.
Companies - be prepared.
3% increases in base salary every year (the average) is keeping salary ranges rather low. Companies, generally speaking, have done a good job of being competitive with each other - assuming NO movement. That said, with the market change that has and will continue to occur, candidates will not move for a lateral or just a small amount. We are back to 10+%. Why? Market supply and demand. The article points out that the recruiting approaches that worked well in the recent past will simply fail in this new market situation.