I've spoken with two prospective clients in the last week who were amazed when I told them that right now is the most difficult market in which to identify, recruit and hire premier employees in years . . . and it's going to continue getting worse. Their response was uniform is their disbelief . . . they always point to the unemployment rate, which nationally is currently 9.6% . . . sounds pretty high . . . and it is.
Most of that unemployment rate is made of manufacturing and construction related labor. The housing crisis and decline of American manufacturing is swellling the unemployment rates. The vast majority of our clients require candidates to have a minimum of a college degree. When you plug that fact into the unemployment rate, it all of a sudden drops to around 4.5%! The unemployment rate for college graduates is 4.5% . . . not 9.6%.
To complicate the reality, as most of you know "full employment" is not 0%(State of economy in which all eligible people who want to work can find employment at prevailing wage rates. However, it does not imply 100 percent employment because allowances must be made for frictional unemployment and seasonal factors If you want to read more, you can do so here.). While economists have different opinions of "full employment" it is generally accepted to be between 2% and 7%. An unemployment rate of around 4.5% for college graduates, given the full context of the number, really suggests that there aren't all that many unemployed college graduates out there! There are even fewer "premier performers"!
The education level of candidates is not the only complicating factor in the market for candidates being weak. The significant drop in housing prices has made the relocation of superior candidates very difficult, because they are unwilling to personally suffer the loss in the current valuation and selling price of their home. If clients are not willing to support the move by helping with temporary housing and/or subsidizing the loss of revenue in the candidate's home sale, candidates simply won't move . . . and who can blame them? Would you walk away from 20%-30% of your home's value from when you bought it? I doubt it.
Premier candidates are additionally becoming increasingly difficult to move because of the size of the counter offers they receive from their existing employer. Remember we're talking about top performers here, in many different executive level functional roles.
When a current employer hears a top performer is going to go somewhere else, they'll hand them a check for $20,000.00 to stay, along with increasing their compensation. They make it very difficult for a top performing candidate to leave.
It's unfortunate that history show that once an employer finds out an employee was ready to leave, the counteroffer notwithstanding, that candidate has become "blemished" in the employers eyes. They can be perceived by the employer to be "disloyal" or "not to be trusted". Often times the career path of the candidate who accepts the counter offer will never be the same as it was before.
Candidates who receive a counteroffer almost always think to themselves, why did it take my deciding to leave to get this raise? What were they waiting for? Why didn't they give it to me sooner, and I might not have considered moving in the first place . . .
The point it, there are multiple factors that have converged to make it very difficult to find top employees. The demographics of the country, with baby boomers retiring and fewer highly trained professionals entering the workforce will continue to increase the difficulty in identifying, recruiting and hiring top performing candidates.