The world has changed, the job market has changed, recruitment has changed. Business owners and hiring managers are having to adapt to the new realities of the job market, with the most agile succeeding and those unable to adapt left frustrated and scratching their heads. I thought it would be useful to outline some of the critical developments of recent months: their causes, their effects, and how to position yourself to have the best chance of successfully recruiting, on-boarding and retaining the personnel you need in this new climate.
Firstly, a market overview. In a nutshell, in the first half of 2022 there were far more jobs available than there were high quality candidates motivated to move. This is making recruitment a much more difficult game than it was 12 months ago, and certainly pre-Covid. From experience, the market has not been more candidate-driven since before the 2008 financial crisis, and anecdotally, I have heard it said that there has never been a better time to be a highly-skilled job-seeker than since the Second World War ended.
What has caused this scenario is essentially a perfect storm of leaner companies keen to make up for lost time due to the lockdowns and the imposed hiatus of the Covid pandemic, and employees reluctant to give up the guaranteed advantages that they have accrued with their current firms during and after this period.
From an employee perspective, the most notable effects of the pandemic are the right to work from home and the right to more flexible work in general. Employees who continued to be productive during lockdowns by successfully transitioning to remote working are now more highly valued by their employers than before, to the point where in some instances they are practically able to dictate their own working conditions. For example, the idea of retaining a Paris salary whilst being physically based in a different region of France would have seemed outrageous pre-Covid, but it is now something we hear about regularly. (We even have people applying for Paris jobs in the belief that this is something that will be negotiable during the process.)
Today, many employees are in a position where they are working from home when they want, as often as they want, and they are simply not prepared to go back to the old ways of working 5 days a week in the office. This sense of “remote-work entitlement” is compounded by the fact that managers and senior managers are often setting the example, especially in bigger firms, where they are themselves reluctant to encourage a return to the old normal. This is particularly prevalent amongst HR teams, the people who would usually be expected to rein it in by dictating and enforcing a more productive policy. The result? Remote working is becoming a seemingly permanent, non-negotiable perk of the post-Covid environment for employees who have ridden out the Covid storm and are still in their jobs.
The situation is often different however for new-joiners where there are two common scenarios. Either employers try to claw back control by making clear that there will be little or no remote working; or new-joiners are expected to initially work from the office, with the promise of flexible working further down the line. This second scenario makes sense as they must learn their new jobs, get to grips with a new company culture, create links with new colleagues, and generally be seen and recognized in their new roles if they are to succeed. But both of these scenarios can be hugely disruptive for a new-joiner if their lives have been organized around flexible working for the past 2 years. People who, under pre-pandemic circumstances, may have been tempted to move for the usual reasons (career progression + cash), are now often content to stay where they are in order to retain their new-found freedom to work from home.
Companies need to communicate clearly and from the outset what the policy is regarding remote working. It is fine to require new joiners to spend time at the office at the start of their new job with you, but let them know if, when and how they will qualify for remote working, how much of their time they can expect to spend at the office in future, and what control they will have over which days they can work from home. Also explain clearly the benefits of working fully from the office during the early stages of their time with you, if this is what you choose to implement. There are definite benefits, some outlined above, which it is important to communicate and put forward in a positive light.
So, what is it like as an external recruiter in mid-2022? Predictably, the answer has two sides to it: good for finding jobs to work on, bad for finding candidates. It does however mean that a good Search firm has become more valuable than ever to clients due to the difficulties of the current market. If we do our jobs well, we are no longer viewed as necessary pests but as valued partners. We are earning our fees by working harder than ever before to find the right calibre of candidates for our clients. There is an ongoing battle, however, to make clients understand that if they are to successfully recruit the talent they require, they need to up their game also, particularly with regards to selling themselves, financial realities and speed.
Competition for talent is the most ferocious that I have seen. Gone are the days when a hiring manager can assume that the candidate sat across from them at interview is desperate to work for them. Even headhunted candidates (as opposed to those who applied to a job advert) are often involved in several processes at the same time, the reason being that if they can be motivated to enter one process, they quickly become interested in the wider market once they realise their potential value. Candidates who arrive via job advertisements will of course be guaranteed to have applied for many, many jobs. If their CV is good enough to attract your attention, you can be sure that it will have attracted the attention of everybody else too. So you find yourself with candidates at interview who have options, an inflated sense of their monetary value, and an expectation that you as an employer will bend over backwards to accommodate their work-life balance requirements.
Businesses can do several things to combat these circumstances and maximize their chances of hiring the right people. They need to first of all accept that the market has changed and make an effort to sell themselves at an earlier stage in the process. It is easy to forget as a hiring manager that a recruitment interview is essentially a two-way sales process: candidates sell themselves to you, and you need to sell yourself to candidates. Just because a candidate walks through your door it does not mean that they automatically want to join your company. In order for the job opportunity to become aspirational in the candidate’s mind, you need to promote the intangible benefits such as the culture of the firm, the working environment and the quality of the people, as well as the tangible benefits such as financial and professional evolution. It sounds obvious, but if you recognize you have a good candidate in front of you, make sure they leave the interview with a positive impression of the firm. And try and be nice.
The next step towards successful recruiting in today’s market is to review your starting salaries (spoiler alert: they have gone up!) and to not continue to apply pre-pandemic salary bands to a post-pandemic world. Listen to what the market is saying. People just aren’t going to move for the same money or a 5% increase any more. They have too much to lose in terms of security and lifestyle benefits. You need to make it worth their while to join you, and this usually means at least a 15 – 20% increase in terms of remuneration. It is common sense: whatever candidates might tell you about their belief in your brand, wanting to upskill or evolve, whilst these remain factors, people work for money.
The final point to make about the interview process is the need for speed. Decisiveness and speed are probably the two most important factors in managing a successful recruitment process today. Given that candidates are likely to be involved in several processes, if you don’t give prompt feedback and move the process forward quickly, you will lose your candidate. Think two days instead of two weeks between interviews, and give prompt feedback at each stage of the process. If you have somebody in the hiring chain who is causing holdups, remove them from the chain.
Having focused on the interview process, let us now turn to the offer stage. You will need to anticipate that once an offer is made, the candidate’s current employer will make them a counter-offer in order to try and get them to stay where they are. This is happening all the time for all types of roles, as businesses are doing everything possible to avoid losing key staff and having to launch a new recruitment process.
Counter-offers are succeeding far more often today than before. Previously, candidates would generally feel that if their employer was prepared to increase their salary now to match or beat their new offer, then they must have been taking advantage of them for the past few years by paying a salary below their actual value. Also, candidates often understand the limitations of their current firm, and realise that the opportunities they require to grow professionally are simply not there. Today, however, we are seeing counter-offers made which are impossible to turn down, with salaries in some instances being increased by as much as 60%, and with rights to flexible work being locked in.
The only ways that you can combat this are by offering an attractive financial package, selling yourself at interview and generally making the candidate want to be a part of your company’s future. Once you are convinced that you have a good candidate at interview, you need to switch into selling mode and trumpet the firm’s culture, its people, its career pathways, its expected growth, its green credentials, its products and services, the work-life balance, even the canteen – whichever buttons you think you need to press to get the candidate on the hook. Cash is king, but where cash is equal it is these things that will make the difference.
Finally, once you have had an offer accepted and the contract signed by the successful candidate, do not relax and think that the process ends there. It should, but today it doesn’t. Once a candidate has resigned from their current role they will have up to 3 months of notice to serve with their current firm before they can take up their new job with you. During this time they will continue to be contacted by companies and headhunters who will be dangling different jobs under their noses and trying to get them to join their firm instead of yours. With every day of notice period that a candidate serves, they actually become more attractive to competing businesses, as they are potentially available sooner than a candidate who has not already resigned and will have to serve their whole 3 months.
Essentially, you need to start your onboarding process as soon as the candidate has signed their contract, and not the day they join your firm. This pre-joining onboarding can take many forms, but you need them to start creating links with and loyalty to your business at the earliest possible opportunity. This could include invitations to any upcoming company off-site activities, organizing team lunches specifically to keep in contact, invitations to team drinks (if culturally appropriate), keeping them updated about company successes or even including them in on-going recruitment processes for future colleagues or members of their future team. Any kind of positive interaction with a candidate while they serve out their notice period is encouraged, as this is the time when a candidate’s head can be turned extremely quickly by a competing offer.
It will be extremely interesting to see how the recruitment market evolves throughout the second half of 2022 and beyond. There are so many external factors that are going to affect us: the war in Ukraine is already starting to have an impact and could of course escalate; Covid hasn’t really gone away; and most analysts think a global recession is brewing, if not already underway. The only guarantee is that we will have to keep adapting and improving our services to meet the needs of our clients, and that we will continue to help our clients adapt so that they can meet their objectives.
DJG Consulting is a Paris based Recruitment and Executive Search firm specialising in Investment Banking, Private Equity, Law and Support Functions for all sectors.