Are we returning to a candidate market again?

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For those of us who have been in the recruiting industry for some time, are you starting to feel a bit of déjà vu reminiscent of 1999? (and I don’t mean the Prince song) Back then, the economy was humming and companies were investing huge sums of money on ERP systems for the dreaded Y2K crash that never came.  On the recruiting front, candidates in select fields were in high demand and very short supply and they were receiving multiple offers with huge signing bonuses.  It was a free agency market mentality!

In some ways it is beginning to feel a bit like 1999 all over again.  In the recruiting market today, it’s widely recognized that the perfect engineer with five years of experience and great potential is heavily in demand but so are Executive Leaders at the General Manager, Director, VP and even the CXO ranks.  These are typically roles that companies invest heavily into developing a strong bench so they can rapidly promote from within and protect themselves from the supply and demand swings of the labor market.  But the reality of today is that the need and volume of openings are starting to outstrip the available talent in the market.

What are the current dynamics impacting supply and demand of talent today?

  • Fewer candidates are willing to relocate – they are deciding to make life choices on where they want to live versus moving to wherever the next big opportunity might lead
  • The availability of openings at the senior level is giving candidates the opportunity to be selective
  • Many candidates already have good internal promotion/career options
  • Residual fear around change (especially for dual-career families) around the economy and its stability from the recent downturn
  •  Conservative hiring over the last four years – Companies were hiring more contractors and consultants at more senior levels…less opportunity for bench strength building

So What does all this mean for companies recruiting today?

  • Speed is essential in the hiring process – when strong candidates decide to look, they are finding new opportunities quickly
  • Expect fallout in the system – always have more than one candidate or potential back up in the process
  • Focus on the “why” – the best candidate will have a strong reason for why they want the job; don’t waste time with candidates who are “window shopping” to leverage other opportunities
  • Don’t assume that more time will generate a better candidate  – a good search firm should be able to get a sense of the market within 30 to 60 days
  • The market is different for every company and location – understand your organization’s strengths and obstacles for acquiring talent
  • When top talent is in demand, people have a tendency to focus on the functional fit – don’t lose focus on the leadership competencies
  • Candidates are asking more in the offer process and don’t be offended when they want to negotiate – today, candidates want more work-life focused benefits such as vacation time, working remote, etc. Do not be afraid to stretch your thinking to be competitive
  • Expect counter offers and develop your initial offers with that in mind