Competing for Talent
in a candidate driven market can be tricky to navigate. To be successful requires the understanding of a few key data points: the fundamentals of supply and demand, unemployment rates and labor statistics, the value your organization can offer, and efficiency. Having a clear understanding of these key points will certainly help to navigate the market and will likely lead to a higher rate of success in landing that perfect candidate!
Unemployment Rates
in the U.S. are at historic lows right now. They fell to 4.2% in September 2017 and the forecast for 2018 is 4.1%. The natural unemployment rate is between 4-5% according to the Federal Reserve. In other words, we are already at a rate that the Federal Reserve considers to be equivalent with full employment. While this is a very positive sign of a growing economy, it can also cause some problems. With so many candidates being gainfully employed a large percentage of the population will not consider making a career change. It also drives the price of skill sets up. This in turn will put many companies in uncomfortable positions. This creates the basis for a candidate driven market and puts the power into the candidate’s hands.
Supply and Demand
is a key economic principle in the job market and it is always in play. In today’s candidate driven market, the supply is dwindling while the demand for niche skill sets is growing. In order to realistically compete companies must be prepared to offer more in order to land top talent. The idea of low balling salary for a candidate in today’s market is a bad one. While it may work in very specific scenarios, it is no longer a tactic that will likely garner a good response. In fact, it may just result in a candidate walking away, rather than negotiating for more. Try to make a strong and competitive offer from the beginning of the negotiations. For reasons of internal equity, many companies are struggling to come up with the offers candidates are demanding in today’s market. If this is the case, try thinking creatively. Think about where your company/offer can add value to the candidate’s quality of life. Can you offer more intangible benefits, such as more paid time off, flexible scheduling, or even alternative work sites. Maybe the candidate can work from home one day a week? Perhaps even adding a sign on bonus? Exploring all of these options can only lead to a stronger employer/employee working relationship. As Millennials begin to dominate the workforce, the benefits of a better work/life balance will likely continue to become more important. Be wary of taking this too far as well. Just because candidates are commanding higher comp packages does not mean your company should be too far beyond the market average. Doing this will only drive the price for talent higher perhaps putting you in a worse position. It may also equate to an unhappy employee a few years down the road, when they realize they have priced themselves out of a raise. Make sure to do your research and understand what market value really is and what your competitors are offering. Recruiters can also be a very useful tool for obtaining this data and helping to guide your compensation decisions.
Review the Internal Processes
you put candidates through. Consider the structure of your interview process, the documentation it requires and especially the time it takes. In today’s market, companies can no longer afford the luxury of time if they expect to hire grade A talent. Highly skilled workers are very cognizant of the amount of time it takes to find a role, and being on the job market can be very stressful. Therefore the speed and efficiency with which a company can get the candidate through their process will score major brownie points when it comes time for the candidate to decide where they want to go. Be sure to keep in regular contact with candidates, answer questions, provide helpful material to them and avoid lengthy periods of no contact at all costs. Doing so may cost you the perfect candidate! Try to create a realistic timeline and stick to it. If you are unable to stay on track for one reason or another, be sure to inform the candidate. Make them feel they are a part of the process rather than just a product or commodity. Simply making the effort to make sure the candidate knows when they can be contacted, or just informing them of delays can go a long way to winning the talent war.
