“There aren’t enough workers to go around for the jobs we have right now. We run an ad and get zero ad response. What do we have to do to find someone to hire?” It isn’t a shock to anyone that it is a candidate driven job market right now. What is causing this, and what can a company do to attract candidates in this type of market?
Some Job Market Facts
- 4.5 million workers quit their jobs in November 2021. This is the same number that quit in October 2021.
- The St. Louis Fed estimates there have been 3 million “excess” retirements during the pandemic.
- According to Indeed.com as of 1/21/22 job postings on Indeed were 60.5% above the level on 2/1/20, the pre-pandemic baseline.
- IHire reports that almost 75% of companies nationwide are struggling to identify and hire top talent. Seventy-seven percent of these companies expect the candidate driven job market to continue throughout 2022.
- The Conference Board reports there are 65 unemployed workers for every 100 job openings. Pre-pandemic that number was 82 unemployed workers for every 100 job openings.
How Does a Company Respond to this Candidate Driven Job Market?
Six point seven million people took new jobs in November 2021, and a report from People’s Bank says 72% of companies feel their human resource departments have been working beyond typical capacity. So, what can companies do to attract candidates?
- Shore Up Your Brand – Make sure the uniqueness of your opportunity and your organization is readily apparent. It has to be clear why a candidate would want to join your firm. Monitor you online reviews incessantly.
- Wage Growth – From 1964 to 1979 productivity went up 13% and earnings increased by 6%. From 1979-2020 productivity increased by 73% and earnings increased by 13%. When productivity vastly outpaces increases in earnings, companies get rich but labor pays the price. Candidates recognize when they are being underpaid and are changing jobs to rectify that compensation shortfall. This is most apparent in hourly work. Wage growth in leisure and hospitality was nearly 7x that in the information sector and nearly 3x the average for all private sector jobs. For the first time since 1997 the growth in wages for high school graduates at 4% is outpacing the growth in wages for college graduates at 3.4%. Internal equity is taking a back seat to making salaries competitive.
- Other Compensation Benefits – Eighty-three percent of employees want student loan assistance but only 8% of companies offer it. Enhanced benefits are becoming more and more important. Employees have examined what is available from the government and are more informed comparison shoppers on health, dental and vision care. The Conference Board found that job postings with a hiring bonus doubled between March 2020 and October 2021. The desire for help with child care is being met by some firms. Candidates are saying, “Give me what I need to thrive, or I’ll go somewhere else that does.”
- Providing Fulfilling Work – Fulfilling means different things to different people. A workforce made up of millennials and gen-zers are redefining the role of work in their lives. Couple this with the accelerated retirement of baby boomers and employers have to figure out how to change roles and organizations to succeed in this candidate driven job market.
- Hybrid and Remote Work – Executive Recruiter, Paul Chatlos, says, “At Smith Hanley we are finding the hybrid work model to be the most common among organizations that we partner with. Although they are still looking for some amount of office time, companies are trying to provide flexible work schedules to attract talent.” One reason pandemic labor shortages have been less stark in white-collar jobs is the availability of remote work.
- Downcredentialing – When there is such a significant mismatch between the supply of labor and the need to fill jobs, companies will have to be willing to compromise on who they hire, and ramp up training to bring those candidates up-to-speed. Investing in a less than perfect hire could potentially give you a more loyal employee.
- Responsive Hiring Process – With candidates getting multiple offers a company’s hiring process must be nimble. Keep every candidate engaged and informed during the process, and they will still be available when you have made a decision. Moving the process along is critical to successful hiring.