It's a candidate's market right now which means that employees have an abundance of opportunities to choose from and can leverage the best one. It’s a power shift from the traditional hiring model where candidates – not hiring managers – have the upper hand. This puts pressure on companies to present the best offer to candidates. If candidates feel indecisive, they can also move between jobs quickly causing sudden labor shortages. As a result, recruiters must get creative to sell a job because workers can be selective right now.
To help recruiters navigate this challenging moment, we created a strategic guide on what to look for and how to stay ahead. But first let’s understand more about a “candidate market.”
What is a Candidate’s Market?
A candidate’s market is typically defined as a period of movement, opportunity and instability. There are three main factors to look for: 1) compensation is higher, 2) candidates are selective and not settling for the first offer, 3) job movement occurs, causing increased turnover.
How Does This Impact Contingent Labor?
Current inflation also means that candidates have more bargaining power to demand a higher hourly rate. As “prices and wages go up,” recruiters can offer more money but in manufacturing or commercial labor sectors, “workers may unexpectedly flake on their first day just because they got an additional 50 cents per hour” at a competing job, as reported by Bersin & Associates. Contingent labor is particularly susceptible to this dynamic because hourly rates can fluctuate depending on the contractor role and industry.
Inflation doesn’t help either. “The annual inflation rate in the US unexpectedly accelerated to 8.6% in May of 2022, the highest since December of 1981.” This was a significant jump from its prior point at 8.3% and by the end of August 2022, it decreased to only 8.52%. Employers have also had to set aside an “average 3.9% of total payroll for wage increases in 2022—the most since 2008,” according to the Conference Board Research Group.
Understanding The Economics: What Causes a Candidate’s Market To Form?
For starters, the 2020 pandemic redefined the “normal” workforce. Millions of Americans were fired or furloughed and that change of lifestyle caused the Great Resignation’ (also known as the ‘Great Attrition’) where many employees left unfulfilling jobs to re-evaluate their goals. McKinsey reported that “more than 19 million US workers– and counting–have quit their jobs since April 2021” and this “record pace” isn’t slowing and is “disrupting business everywhere.”
As the threat of COVID-19 subsided an influx of jobs became available and the economy shifted towards recovery mode. “Historically, economic recoveries tend to shift employer driven markets to candidate driven markets,” according to HR Daily Advisor. For Nick Bunker, economic research director for North America’s Indeed Hiring Lab, “we’re in a situation where the bargaining power and the labor market has shifted toward job seekers.” Think of this in terms of numbers: if 1 out of every 10 jobs are open and you have over 4 million people leaving their jobs each month and wages increasing at the highest rate ever, that equals a “crazy labor market.”
How To Compete in a Candidate’s Market
Recruiters should be mindful that candidates will move for the next best opportunity without hesitation. To compete for top talent in their industries, employers and end-clients should be prepared to offer higher salaries and better benefits. But recruiters also have to start getting more creative in cultivating distinct talent pools according to their distinct “workplace priorities.” McKinsey research from summer 2022 revealed that paying attention to these differences helps recruiters “take a multi-faceted approach to attract and retain talent.”
Recruiting with nuance “doesn’t mean that organizations have to change their mission, values, or purpose. Rather, they can showcase different facets of their employee value proposition to a broader number of workers and get more creative in their offers to current and potential employees.” Labor specialists have also encouraged recruiters to think of candidates according to 5 different types of talent pools. These are described based on personality and lifestyle preferences such as the traditional 9-5 workers, the non-traditionalists, gig autonomous workers, young idealistic workers and older workers who work as caregivers but need supplemental income. Often, the type of work a candidate wants aligns with an industry. The better a recruiter can match and pair these two, the more successful a match.
For Recruiters: Our Strategic Guide to Navigating a Candidate’s Market
With these insights in mind, here’s our recommended strategies to help recruiters pick the best candidates in an overflow of candidates.
#1 Look for Candidates that are chasing experience AND pay
Candidates who want experience working within a given industry are more likely to stay put. A 2022 study by The Avra Review found that candidates chasing the highest pay alone are less emotionally invested in their work environment, so they are more likely to say, “no to an opportunity that doesn’t check all their boxes.”
#2 Recruit within industries that are growing at the same rate as the economy
Focusing your recruiting efforts on fast growing industries means that each hire can be more rewarding and impactful. Recruiting across several areas also means you are diversifying your efforts and increasing your placement rate. People are naturally inclined to work for a growing industry because there’s a greater chance for pay and upward movement.
These strategies are key but successful staffing also is about personalization and building relationships so recruiters must also dig deeper to re-engage candidates one-on-one. Here’s some additional recommendations:
#3 Be receptive and adaptable to changes.
Even in a candidate’s market there are periods where hiring slows, so follow the market shifts and use those slower moments to strengthen your talent pool and re-strategize.
#4 Keep perspective.
Remember that even with successful placements, contractors may still want to move and temporary labor shortages can still occur. According to Indeed’s Bureau of Labor Statistics, “quit rates have grown the fastest among industries often associated with lower pay, led by the leisure and hospitality industry, and followed by manufacturing and retail trade.”
#5 Write a compelling job description.
Spotlighting the skills and specifics of a job can go a long way in engaging top-notch talent. This is also a chance to personalize your outreach.
#6 Promote the job posting on multiple platforms and correspond with candidates via text to convey a modern communication style.
Meet your candidates where they live: on their phones.
#7 Go the extra mile with personal touches.
Take detailed notes during phone screens and preliminary interviews, keep insights and conversational anecdotes specific. Anything that will help you remember the candidate with detail will strengthen the depth of conversations.
#8 Prioritize standout candidates without losing placement speed.
Recruiters may know immediately if a candidate is stellar but as you cultivate that one candidate, remember to still cast a wide net. You must still target as many best-fit candidates as possible.
#9 Work towards rehiring and retention.
If you cultivate a talent pool of candidates, follow up with them to build your relationship. If the contract is coming to an end for an hourly gig– connect ahead of that point to place them into another job. These are simple ways to retain talent which promotes rehiring. Hiring is hard but losing a great worker is even harder. It can be costly to recruit someone but losing an employee can be even more expensive.
#10 present a holistic version of a job for a candidate so that the individual gets a full picture of the hours, tasks, job site, culture, and community.
If that doesn’t convince the candidate, take a different tact. Recruiters can explain how working in this job is a way of growing experience.
As you recruit, keep these strategies in mind and remember that staffing is a shifting industry that is reactive to cycles in the economy. A candidate’s market has its own unique challenges but pace yourself to stay mentally sharp.
Be mindful of your time and energy when you have a lot of jobs to fill in a short time, don’t waste time waiting for non-responses, submit new candidates on a regular basis and spotlight key distinguishers of a job and how they pair with a candidate’s skill set and worker priorities to recruit in a straightforward, personal manner.