U.S. employment had its challenges during the winter months of 2014, but throughout most of the year we’ve experienced consistent growth with a 12-month average of 222,000 new jobs. Despite the fact that many companies are in growth mode, retention is increasingly problematic. This is especially challenging in the candidate-driven professional sector, as the brightest talent recognize more jobs are available and feel more confident about pursuing them. Many employers continue to lose great candidates to lengthy hiring practices, below-market salaries and an inability to sell the company brand, the role and true advancement opportunities-all of which intensify recruitment difficulties.
The most recent Recruiter Sentiment Study from MRINetwork, a subsidiary of CDI Corporation, reveals new data indicating 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 consensus from the biannual employment landscape survey of MRINetwork recruiters is that in 2015, employers will need to review their recruitment and retention strategies from the top down, to remain attractive to employees, contract workers and potential new hires.
“It is definitely and without a doubt a candidate-driven market, however many employers are still laboring under the same processes as they did when it was an employer-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.” According to the report, in the second half of 2014, 83 percent of recruiters described the talent market as candidate-driven, up 29 percentage points from the second half of 2011.
The professional market, for both permanent and contract workers, continues to be candidate-driven because of the availability of more job opportunities and growing talent shortages due to skill gaps. Top performers have a strong advantage, with multiple job offers or assignments to consider, and the ability to reject less desirable work opportunities. This is significant when you consider the factors motivating a job move. According to the study, 49 percent of recruiters say a greater number of advancement opportunities serve as the primary motivating factor to make a move, followed by improved compensation. Based on year-over-year data, the main reasons for rejected job offers are that great candidates are accepting better offers with other companies and are 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 that 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 it is a candidate-driven market in many industries. This provides candidates with the time to investigate and accept other opportunities.
- Whether candidates seek permanent employment or a contract assignment, they are much more fully engaged in the process and 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 their contingent and permanent staff. “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 permanent and contract 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 of both permanent and contract staff as the job market expands.
A fundamental shift is taking place in the way 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, click here.
Recent CDI Analysis
The search process is still taking way too long considering the recession has been behind us for years and it is a candidate-driven market in many industries. This provides candidates with the time to investigate and accept other opportunities.
2014 2nd Half MRINetwork Recruiter Sentiment Study
December’s Employment Situation Report from the U.S. Bureau of Labor Statistics showed strong growth in the nation’s workforce across many industries, as well as a .2 percent decline in the unemployment rate to 5.6 percent. Employment increased by 252,000 positions, above economists’ predictions for approximately 240,000 jobs.
Professional and business services experienced the most industry growth, adding 52,000 positions during the month of December. Within this field, some of the most prominent expansions occurred in computer systems design and related services, which added 9,000 jobs, as well as architectural and engineering services which added 5,000 roles.
Other industries that saw positive growth include manufacturing and financial activities. Mining and logging, as well as government and information sectors remained largely the same during December.
According to Reuters, 2014 demonstrated the strongest labor gains for the country since 1999, with 11 months of workforce increases above 200,000. However, this growth increases the likelihood of the Federal Reserve raising interest rates. According to Reuters, economists said the data buttressed the case for the Federal Reserve to take a go-slow approach to raising interest rates.
The full Bureau of Labor Statistics report can be downloaded by clicking here.