We are living in a candidate driven job market. At the highest rate since 2010, there are more job openings than there are available candidates to fill them, which means candidates are in the driver’s seat. A strong labor market is great for employees who are in search of better opportunities, and those who have been out of the workforce for an extended period have new hope to rebound and re-set their careers.
This is good – and bad – depending on who you are. For an employee, the numbers are positive.
- Low unemployment: the US unemployment rate in January was 4% (the lowest in 18 years) with a 63.2% job participation rate (the highest level in almost six years).
- In January the US added 304,000 new jobs. The number of people joining the labor force in 2018 were the strongest rates in the last three years.
- The monthly average jobless claims in September 2018 were at the lowest level since 1969 (at 206,000).
- January also marked a record with 100 continuous months of job gains.
But looming behind the good job market numbers is some gloom: a reality check for employers.
- It takes an average of 36 days to fill a job opening (defined as the day the job is vacant to accepted offer), forcing employers to become more aggressive and move much quicker to fight for available talent.
- The cost of leaving a role vacant takes a toll on current staff who are asked to share the workload until the position is filled, the department that needs all resources to execute on the strategy, and the strain on support teams to fill the position quickly (such as HR and Talent Acquisition), which de-prioritizes other important initiatives.
- Employers are left in the dark, or “ghosted”- during the interview process as candidates do not follow through on interviews and extended offers in lieu of other, more promising opportunities. According to the USA Today, 20-50% of applicants are “no shows” at some point in the hiring process (from phone interviews to their intended start date).
- A higher percentage of job offers are declined in a candidate driven job market. Candidates understand they hold the cards, and they can hold out for the perfect job.
What can employers do to limit the BAD of a GOOD job market? Here are a few suggestions on how to adjust the hiring process to be competitive in the already-competitive talent market.
Employer Brand: Identify and Communicate Your Value Proposition
- Why should that perfect candidate come to work at your company? Know the answer to that question before you begin the interviews. In fact, know the answer to that question before you post the job.
- The job posting is the first opportunity a candidate has to learn about your organization. What will you say to differentiate from all the other National Account Manager job postings? What benefits can you provide? What growth opportunities exist? What does “this is a great place to work” really mean?
- Ensure your recruiting partner knows this value prop as well as you do. An external recruiting team is an extension of your brand and the first point of contact with candidates: they need to describe your business as well as you would.
Sell the Candidate on Your Company, the Opportunity and You
- Hiring managers want “only the best” candidates to join their team. This often results in a “rule them out” approach to interviewing, which means hiring managers only want to consider that ideal (100% match) candidate. Casting a wider net when interviewing leads managers to consider those that are an 80% match, which can lead to a 100% success story.
- Humbly accept that you are not the only suitor. Candidates are interviewing you too – and they have options. If you are interested in a candidate, that candidate needs to leave the interview excited about your company, the opportunity and you.
Accelerate the Hiring Process
- The longer the process, the greater opportunity candidates have to find another role that is equally as appealing. Top candidates are wooed day and night in this tight labor market.
- An unnecessarily long hiring process allows passive candidates (those not actively looking for a job but willing to listen to an opportunity) to suddenly become active candidates. Once they know Company A wants them, they will look for Company B, C, and so forth.
- Eliminate any non-essential interviews. Do you need two peers to interview each candidate, or will one (or none) suffice? Maintain a small and diverse circle of interviewers to move the process along quickly. Schedule interviews in the same day. Block time on calendars early for all those that will participate. We know how difficult it can be requesting a one-hour time block only days in advance, and the higher up the corporate food chain someone is, the more directly proportionate this challenge becomes.
Look for the Signs
- Candidates display verbal and non-verbal cues that reflect their level of interest in the job. Non-verbal cues include how they choose to dress for an interview (which includes video interviews). Dress to impress, as the saying goes.
- Verbal cues also help gauge the level of interest of candidates. Not asking questions shows a lack of curiosity about the position. Asking certain types of questions early in the interview process (e.g. what is the PTO policy?) is an indication they may be motivated by short-term factors.
- Recognize the signs of candidates that are “ghosting.” Candidates who are a no-show to phone interviews, in-person interviews, or even their first day on the job, feel no need to communicate, but rather, disappear like a ghost. Identify the signs early in the interview process and raise the red flag.
Be Financially (and Non-Financially) Competitive
- Most hiring managers believe they can find the perfect candidate at the low end of the salary range. The adage is true: you get what you pay for. The most qualified candidates are the most expensive. Understand from the beginning of the process what you are willing to pay (what you are really willing to pay).
- Hiring managers must also consider – in this competitive market – if you are willing to pay more today for the potential of tomorrow. This means overpaying today for the expected long-term impact this candidate will deliver. Several thousand dollars in a higher salary today could result in ten times the business results three to five years down the road.
- If the candidate of your dreams walks through the corporate front door today, are you willing to pay $5,000 over your budgeted salary? What about $10,000? Communicate those boundaries to your recruiting team or partner before that job opening becomes public. Lessen the back and forth negotiations at the point of verbal offer because of a lack of clear salary expectations.
- Recruiters are in the job of “pre-closing” candidates. They have ongoing conversations with candidates during every step of the process to know specifically what they want (salary, health benefits, PTO, bonuses and fringe benefits). Clearly define the comprehensive compensation and total rewards package with your recruiting partner to help mitigate competitive offers (when possible).
- Understand what is most valuable to each candidate. Examples include work/life flexibility (e.g. opportunity to work remote), participation in an LTIP or stock program, education reimbursement programs, ability to advance to next-level roles, global exposure, among others. Each candidate is different in what is most important for their careers – value these tipping points to help close the deal.
Have a Good Partner for Mission-Critical Needs
- Internal recruiting teams are well suited to support most hiring needs, especially higher volume, recurring needs. They may be less prepared to handle infrequent, mission-critical (those that have the highest impact on business results) roles that require an extreme sense of urgency to fill.
- Partner with a recruiting team that understands who you are: your business objectives, your culture and work environment, and your talent strategy. Ensure that recruiting team has demonstrated success meeting client expectations.
- Maintain consistent communication with your recruiting team. Share every detail about the position to help guide the sourcing process. Share immediate feedback, good and bad, with the recruiter as soon as an interview is complete. Be specific with that feedback so that the recruiter can adjust their search parameters. As soon as the interview team completes interviews, schedule a debrief call to gather all relevant feedback. The more quickly the feedback can be provided to a candidate, the more the candidate will feel valued (or be able to move on to another opportunity).
A candidate-driven job market is a great economic indicator, but that doesn’t mean employers need to ride in the back seat. This is a time for employers to find improvements within the hiring process to not only hire great talent, but enjoy the ride from the passenger seat of this strong economy.