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Despite some challenges during the winter months, U.S. employment has experienced consistent growth in 2015, with 250,000 new jobs as the 12-month average through June. Many companies are expanding, but are finding that recruitment of both permanent and contingent candidates is increasingly problematic, especially in the professional job market. In this sector, which is candidate-driven, employers continue to lose great candidates who are accepting other job offers. This is due to lengthy hiring practices, below-market salaries and the failure of prospective employers to sell their brand, the role and true advancement opportunities. Retention is also a challenge, as the brightest talent recognize more jobs are available and feel more confident about pursuing them. Now more than ever, companies are feeling the pressure of the candidate-driven market, forcing many to turn to external recruitment experts who can help them revamp their hiring practices, so they can attract and retain the specialized talent and leadership needed to move their organizations forward.
The most recent Recruiter Sentiment Study from MRINetwork, a subsidiary of CDI Corporation, indicates that 90 percent of respondents feel the professional sector is candidate-driven. This stands in strong contrast to companies that still believe employers are driving the labor market, and that their pre-recession talent acquisition and retention methods are still effective. The biannual employment landscape survey of MRINetwork recruiters also revealed the candidate-driven market, which has experienced a consistent uptick since 2011, is here to stay, and the rate at which top performers are rejecting job offers continues to grow.
“The job climate has definitely shifted in the past three years to a candidate-driven market,” said a recruiter responding to the study. “Candidates now have choices and employers need to make the interview process go smoothly and quickly.” The report reveals in the first half of 2015, a 36 percentage point increase from the second half of 2011, that recruiters feel the talent market is candidate-driven.
The availability of more job opportunities and a growing shortage of highly specialized talent is the overriding force behind the candidate-driven market. With multiple job offers to consider and the ability to reject less desirable work opportunities, top performers have the upper hand. To that end, the reluctance of many companies to provide wage increases beyond 3 percent, or to offer competitive salaries to prospective hires and contractors, is impacting their hiring abilities. According to the study, 47 percent of recruiters say failure to recognize that top candidates are no longer accepting the low salaries that were customary during the recession is the primary obstacle to hiring. The message is clear; employers who do not wake up to this reality will continue to lose their top picks to competitors. Based on year-over-year data, the main reasons for rejected job offers continue to be a result of great candidates accepting offers from other companies and being presented with disappointing compensation. Further, the time between the first interview and the rejected offer is shrinking, with a six percentage point increase from the second half of 2013, for candidates who rejected offers within two weeks of the first interview.
MRINetwork recruiters provide the following survey insight about rejected job offers:
- The search process is still taking way too long considering the recession has been behind us for years and the fact that it is a candidate-driven market in many industries. This provides candidates with the time to investigate other opportunities.
- Candidates are much more fully engaged and also much more aware of their worth in the marketplace.
- Clients are still looking for the perfect candidate, yet are not offering an enticing salary.
With more top performers moving on, the candidate-driven market points to several things:
- Internal and external branding will continue to be important as companies face growing pressure to sell their value proposition to candidates, as well as permanent and contract employees. “They are operating with the mindset that there are an abundance of candidates, all willing to jump through hoops to get a job at their company, and that is just not true anymore,” says an MRINetwork recruiter.
- A streamlined hiring process will be imperative to avoid losing top candidates in 2015 and beyond. One recruiter notes, “Every candidate we speak with is actively looking and has several irons in the fire.”
- Talented employees who were hired at bargain salaries during the recession will be moving on. The majority of MRINetwork recruiters (83 percent) say they have interacted recently with these under-compensated and under-employed candidates who are anxious to improve their earning capacity. Salary and benefit packages will need to be adjusted to retain these individuals.
Although the study results demonstrate that hiring trends are highly favorable towards top performers in the professional space, recruitment and retention will continue to present ongoing challenges for overall hiring as the job market expands. A fundamental shift is taking place in the way in which candidates expect to be recruited, and companies need to get on board with these changes to bring in and hold on to the talent they seek.
To view the complete study, visit www.CDICorp.com/recruitersentiment.
Management Recruiters International, Inc., branded as MRINetwork®, is one of the largest executive search and recruitment organizations in the world. A subsidiary of CDI Corp., a global provider of engineering & information technology outsourcing solutions and professional staffing, MRINetwork has approximately 600 offices in over 40 countries.
Recent CDI Analysis
“The job climate has definitely shifted in the past three years to a candidate-driven market. Candidates now have choices and employers need to make the interview process go smoothly and quickly.”MRINetwork Recruiter
Employment Situation (U.S.)
Although U.S. job gains in July were slightly lower than expected, the numbers show promise that the nation’s employment situation continues to move in the right direction. According to the most recent data from the U.S. Bureau of Labor Statistics, the unemployment rate stayed at 5.3 percent as economists predicted, and 215,000 new jobs were added, slightly under the 12-month average of 246,000 new jobs. The largest gains were seen in the retail industry, adding 36,000 positions. Within the industry, motor vehicle and parts dealers experienced the most growth, adding 13,000 new jobs.
Professional and technical services also saw major gains, adding 27,000 new jobs throughout month. Computer system design and related services, and architectural and engineering services added the most jobs in the sector.
Employment in construction, wholesale trade, information and government did not change significantly.
According to the Wall Street Journal, the Federal Reserve has not made any decisions regarding the short-term interest rate changes but is expected to soon. The Fed held a policy meeting last week, and many are expecting them to increase the rate in September. However, global growth remains slow, causing many investors to be skeptical about the economy’s health and worry rate changes in September may hurt more than help.
The full Bureau of Labor Statistics report can be downloaded by
Employment Situation (Canada)
Canada’s employment situation remained relatively stable for the month of July. According to data released by Statistics Canada, the nation’s unemployment rate stood unchanged at 6.8 per cent, the number it has been for the past six months. Demographically, employment growth was seen in men between the ages of 25 and 54, a group that gained 19,000 positions in July. Other demographics, including women between 25 and 54 and people 24 and under, saw little or no changes.
The sector that saw the greatest expansion was the professional, technical and scientific services industry, which gained 19,000 positions. The employment report explained that this field has grown by 38,000 positions compared to last July. The public administration sector gained 9,000 jobs in July, and the number of people identifying as self-employed grew by 41,000.
According to the Huffington Post, there has been a debate among economists about whether Canada is in a recession due to its lack of economic growth and numerous stagnant industries. Much of this speculation is due to a significant decline in the country’s oil and gas field, which has traditionally been a major financial player for the country. The source explained that while the nation is not officially in a recession due continuous marginal job gains, it could be headed in that direction over the next few months.
Canadian ES Report:
Labour Force Survey, July 2015