I’ve been noticing and talking with recruiter colleagues about the fact that our clients continue to believe in talent acquisition based on a “Surplus of Talent” strategy, when in fact we’re now, more than ever in a “Shortage of Talent” world! Then, my colleague from irsa (International Retained Search Associates) writes this piece. I think it’s worth sharing.
The employment market has changed dramatically over the past 6 months. The number of open positions has risen and the number of available candidates has dropped. The combination of supply/demand has moved markedly towards the 'supply side'. (President Reagan would be proud).
In this first half of this year, we have seen a dramatic rise in fall-offs. A Fall-off in recruiter-speak is an offer that is rejected by the candidate. Over 50% of those fall-offs have been due to poor offers from our clients and the balance are due to candidates either taking counter-offers from their current employer or accepting offers from another company. As our history has been remarkably 'clean' from fall-offs, this represents a new dynamic for us. We have always ensured that our presented candidates are fully interested and qualified to join the company. We reliably review the reasons for making a move; inquire about any other potential activities or interviews on the horizon, etc. But this year has produced a rash of poor offers and last minute surprises by our candidates. And apparently, we're not alone.
In an informal canvassing of our clients, we've found that their HR departments have been besieged with turned down offers, coupled with a business slowdown in the first quarter (weather, West coast port closures, economic concerns, etc.). I don't see offers getting any easier.
Our industry is changing rapidly, with the need for specific technical skills increasing.
The days of 10% unemployment are long gone. People are no longer desperate for a new job and they certainly aren't interested in taking lateral moves; with larger risk. Your internal equity means very little to the people you need to attract... the new candidates are expecting and receiving far larger increases in compensation than from 2 years ago.
While I fully appreciate the vested interest in this last point, I also feel we owe our clients honesty in the market. Our compensation surveys are current and real. We're not doing market level compensation surveys across 'Manufacturing' or 'Distribution'. Our compensation numbers are within the electrical industry only... and the results are live! Accept the fact that talent is more expensive. It's going to be that way for some time. In short, if you want to hire somebody... make them an offer they can't refuse.
Ted is Managing Partner of Egret Consulting Group. He wrote this for Egret’s July Newsletter. Egret is a boutique, full service executive search firm, specializing in the Electrical Industry. They are the best in their specialty.