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Recovery - The Challenges of Hiring in This Changing Market
In recruitment, as in other industries, annual reports for 2013 from UK businesses frequently describe market conditions as having been ‘challenging’. Analysis of the figures often reveals that, in fact, it was the clichéd ‘year of two halves’ and that over the course of the second half, a sense of cautious optimism and quiet confidence crept into the recruitment market, just as it did into the wider economy. Our clients across a variety of different sectors began to feel more positive about prospects and market opportunities, leading to an increase in both strategic and operational hiring.
The beginning of 2014
At the end of the first quarter of 2014, it is very clear that the economic recovery is real, gathering pace and has all but left the caution behind. There has been some discussion about the nature of the improvement and the factors driving it, but as indicator after indicator confirms the breadth and depth of the recovery, this debate is dying down. Inflation is at its lowest level in four years and employment figures have hit record levels. Economic forecasters and trade bodies all agree that earlier forecasts of the UK economy for 2014 were too cautious.
A recent study by accountants BDO and the Engineering Employers Federation (EEF) reports that manufacturers in the UK plan to hire at the fastest rate in more than a decade. The EEF's chief economist, Lee Hopley, said: "This is the most positive set of indicators we have seen for some time, demonstrating that we've not just turned the corner, we're actively heading down the right road. Manufacturers are clearly feeling more confident as their order books fill up and exports are strong.”
‘Risk off’ to ‘risk on’
The recruitment market is likely to experience a degree of tension as a result of this change in sentiment. During the downturn, the market provided significant challenges for employers, candidates and consultants and recruiting often proved more challenging than anticipated. The market was conservative in tone, expectations were high and there was wider than usual stakeholder involvement which frequently extended timeframes. A common misperception of those hiring was that the market would provide a wider choice of candidates. In many instances this led to ‘profile creep’ where the expectation bar rose, while the reality has always been that it is the candidate of the highest quality who has remained in demand, regardless of the overall volume of those available.
Conservative decision-making has been widespread, particularly in the form of narrow sector focus and an unwillingness to ‘risk’ transferable skills or experience, with recruiters seeking the comfort of market expertise and in some cases, established relationships. Until very recently, remuneration increases for the majority of the professional population have been modest at best.
Encouragingly, many of the businesses that we meet and work with are describing ambitious growth plans, far in excess of the Chancellor’s forecasted 5% for the economy as a whole over the next two years. Some aspire to increase market share and to launch new products and services into established markets, others intend to extend into new markets and many plan to grow in both ways. Companies recognise the need to add to or refresh the leadership that will drive this growth.
As we move further into the upturn, competition for the best talent will only intensify and the market and those in it must respond accordingly. We are already seeing an increase in the volume of new assignments across a variety of functional leadership and general management disciplines. Some of the less welcome dynamics that we are encountering include issues such as the return of candidates with competing job offers, even at the most senior level, and increases in the frequency and scale of the ‘buy-back’.
Here are a few thoughts as to how to deal with the challenges of this changing market:
- Recruitment processes should be clearly defined in advance, ensuring that the number of stages involved can be established at the outset and candidates’ expectations managed accordingly.
- Establishing effective ‘triangular’ communication channels (client – consultant – candidate) at the outset is crucial, as is maintaining and developing them throughout the process.
- In addition to defining the role and person specifications, significant effort needs to be invested in developing and sense-checking all aspects of the proposition, ensuring that the most compelling and appropriate messages are conveyed clearly to the right target market.
- Sourcing methodologies need to be innovative, diverse and effectively executed, taking into account all aspects of the requirement and its context.
- Remuneration packages and expectations need to be set and managed realistically. A good recruitment partner will be able to access live data before and during the recruitment process to ensure that all parties’ expectations are aligned and met.
- Having begun by saying that processes should be defined, hiring organisations may also need to be responsive and agile where they find themselves in competition for an individual. Ironically, defining the process and its necessary stages at the outset will make this easier.
Ultimately, we must respond to the changing dynamic of the market and look to exploit the opportunities that arise from it – just as hirers become less risk-averse, so do prospective candidates and this provides a good opportunity for ambitious businesses to attract, engage and secure ambitious professionals.
Companies looking to add to their leadership teams during this period will benefit from a well conceived and executed recruitment process run by an experienced partner. Get in touch to discuss your requirements.