Candidate-Driven Market Continues to Complicate Hiring Top Talent
September 27, 2023 – More movement in the job market appears to be on the way. According to a survey of more than 2,500 workers in the U.S. from Robert Half, one-four respondents are currently looking for a new role, and an additional 24 percent plan to start searching by year-end. The combined percentage (49 percent) is up three points from December 2022. “The takeaway for employers, especially those facing recruiting challenges, is that skilled workers are willing to make a move for the right opportunity,” said Dawn Fay, operational president of Robert Half. “If you’re not offering competitive pay and benefits and a work culture that promotes employee well-being and professional development, you’re at a big disadvantage. Being efficient and open to negotiating is also critical to landing the best talent.”
“While there are plenty of opportunities out there, landing a better-paying position doesn’t guarantee greater job satisfaction,” Ms. Fay said. “Before making a career move, workers should ask themselves: What are my personal and professional priorities, and what will help me achieve my long-term goals?”
Those most likely to make a career move in the remainder of 2023 are: GenZ (74 percent), technology professionals (64 percent), working parents (63 percent), and employees who have been with their company for two to four years (62 percent). The report found that contract work is a viable route for many professionals, with four in 10 workers being open to pursuing contract roles.
Workers exploring other employment opportunities are motivated by: A higher salary (55 percent), better benefits and perks (38 percent), and remote work options (28 percent). These rankings are unchanged from the previous survey. Compensation, benefits, and remote work options are also the top elements professionals look for when evaluating job postings.
When applying for an open role, professionals said they’d lose interest and withdraw from consideration due to: poor communication and follow-up from the hiring manager (52 percent), excessive — or more than three — rounds of interviews (40 percent), and a lengthy hiring process (39 percent).
“In the private equity world, operating partners and portfolio company leaders know that finding and retaining brilliant leaders is their largest challenge and opportunity,” said Geoff Votta, partner in the private equity practice at Acertitude. “In today’s environment, recruitment speed becomes paramount. CEOs, CFOs, and other highly sought-after executives, especially those with successful exit experience, are often presented with numerous opportunities. Forward-thinking PE-firms and their portfolio companies have a greater shot at recruiting top-tier talent by adjusting and truncating their hiring processes, striking the delicate balance between rigor and efficiency. While due diligence should never be compromised, it is imperative to fast-track candidates whom you believe in and not rely on a process that may have worked in the past.”
“Efficient hiring processes help to eliminate dropouts and offer turndowns, reduce the likelihood of counteroffers being accepted, retain engaged and diverse talent, and attract strong individuals who appreciate both a streamlined approach and a productive partnership,” Mr. Votta said. “There is a symbiotic relationship between accelerating executive recruitment and the ability to attract and hire high-caliber candidates.”
“As the private equity landscape evolves and the competition for leadership talent intensifies, it is essential to demonstrate agility throughout the hiring process,” said Mr. Votta. “Maintaining a competitive edge in a candidate-driven market depends on it.”
“Often the best executives/candidates are motivated by opportunities to drive and lead outsized impact,” said Joe Suliman, managing director and head of Daversa Partners’ Boston office. “This can most commonly be achieved by owning a large part of the business and leading that organization through a scaling period and then an outcome. While no one has a crystal ball, the candidates are making an investment in their future whenever they take on a near leadership role, so selling the candidate like you would an investor on the future of the business and the critical role they will play in driving key initiatives is paramount to hire top talent in a candidate-driven market.”
“There are always going to be hires that don’t work out, but a bad hire can be more detrimental than taking the additional time to make the right hire,” Mr. Suliman said. “Making a good hire starts with clearly defined company values and a clearly defined responsibility of the role you are hiring for so that you can pattern match against these criteria during your interview/courtship process. It is cliché to say but if it isn’t a hell yes then it is a no. Do not abandon your standards under pressures of time or other ancillary factors. Listen to the advice of people you trust, not the ones you don’t. Meet the candidates in person. Take them out to dinner. Be vulnerable and see how they respond. Ask them for advice on real issues in your organization. Understand their motivations. Listen to your instincts.”
Mr. Suliman notes that he loves asking: “Who is the best X (product manager, engineer, BDR, whoever it is you would be interested in building your network around) you have ever worked with?” This is very different than asking for recommendations for the role because people’s first reactions are usually to refer someone they know is looking, according to Mr. Suliman. “Asking for the best gives you a reason to get an audience with the individual under a non-transactional setting and build a relationship from there,” he said. “Not only will your network begin to up-level from a caliber perspective, but you will have opportunities to market your business to the very best. Word will spread and people will start to become candidates.”
“In today’s war for talent, companies must approach this effort strategically and focus solely on knowing the talent in the marketplace and having a plan on how to develop talent where it cannot be readily identified,” said Lisa Buckingham, president of Ellig Group. “An essential way for employers to stay ahead is to market map for each critical role in their organization intentionally. In a candidate-driven market, it’s critical to adapt and innovate continuously to stand out and secure and retain top talent. Knowing the talent in the marketplace, thinking through different lenses, and continuing to build the knowledge of talent, especially those that are not on the market.”
“In addition to the typical best practices of competitive compensation, innovative total rewards, flexible work arrangements, continuous learning and development opportunities, and a strong diversity and inclusion culture, organizations must demonstrate terrific leadership, high employee engagement, and future growth opportunities,” said Ms. Buckingham. “Today’s talent marketplace is competitive, and it is simply different. Organizations must change to stay competitive. Candidates expect a smooth recruitment process with effective tools, high-touch communications, and transparency throughout the process.”
Ms. Buckingham also says that the cost of a bad hire is immeasurable. “Avoiding bad hires requires a systemic approach that values both the company’s needs and the candidate’s qualifications,” she said. “A well-structured hiring process reduces the chance of costly hiring mistakes and contributes to a more productive and harmonious work environment and culture. Creating clear job descriptions is a critical starting point. Clearly outlining the role, responsibilities, and expectations is table stakes for a successful process. This helps the manager define the future skills for a role and provides candidates the opportunity to self-select whether they should apply. Although, at times, it is difficult to truly get the job description precise, putting the time into defining the role will likely reduce the potential for mismatches. Defining the interview process and who will participate is key.”
“Having a structured interview with standard questions for each interview can be helpful and will help make the decision-making process easier,” Ms. Buckingham said. “It further creates a fair, equitable, and consistent evaluation. Behavioral Interviews can be helpful as you learn about the candidate from their past accomplishments, adaptability, problem-solving skills, and potential cultural fit. We firmly believe deep reference checks are critical, especially at the C-suite and board levels. You can delve into the candidate’s strengths, weaknesses, and overall performance. Background checks are also essential. Varying levels of assessments are also helpful to inform the hiring process.”
“In a candidate-driven job market, where skilled professionals have more options, it’s crucial to adopt proactive strategies to attract and retain top talent,” said Pete Petrella, practice leader, executive search at TalentRise. “Articulate your organization’s unique value propositions and the compelling reasons that make it an appealing workplace for potential candidates. Today’s job seekers are discerning, placing a premium on alignment with a company’s values and culture. They’ve become more astute in evaluating corporate environments, delving beyond compensation and stability. Factors such as the office atmosphere, DEIB initiatives, the quality of leadership they’ll encounter, and the organization’s overall reputation now play pivotal roles in their decision-making process.”
Mr. Petrella says leaders should develop strategies to gain the attention of top talent within the attention economy. “In today’s attention-driven landscape, hiring top talent requires innovative approaches that recognize the value of attention as a limited resource,” he said. “With numerous distractions vying for people’s focus, it’s essential to acknowledge that candidates often lack the time for in-depth exploration when encountering job-related messages or postings. Therefore, it’s imperative to meet potential hires where they naturally engage.”
Attracting passive candidates requires a strategic and personalized approach, according to Mr. Petrella. “Clearly defining the type of candidate you are targeting,” he said. “Identify companies you admire and familiarize yourself with their workforce to better understand your target demographic. Once you’ve identified individuals who appear to be a good fit for your company culture, actively engage with them on professional platforms like LinkedIn by liking and commenting on their posts. Take the initiative to network and arrange a meeting to establish a more personal connection, even if an immediate job opportunity isn’t available. Adopt a give before you get mentality—look for opportunities to provide assistance or showcase your strengths as a potential mentor or collaborative team member. This approach fosters a mutually beneficial professional relationship.”
“Establish a distinct employer brand, reflecting how current and past employees perceive your organization,” said Mr. Petrella. “Invest in defining and effectively promoting this brand. Celebrate your culture and create an advertising and marketing plan to showcase your value as an employer of choice. Why? Your standing as an employer holds greater significance than is commonly acknowledged. Job seekers conduct extensive research on potential employers before making decisions. Platforms like Glassdoor and Google Reviews wield significant influence and should be reviewed and managed. When viewed as a top workplace by your employees, it can significantly enhance your ability to attract top talent.”
With so many technology vehicles in operation today there are plenty of options when considering how to get in touch with potential candidates, says Tim Tolan, founder and managing partner of The Tolan Group. “With the plethora of social media platforms, job boards and executive recruiters, accessing candidates is much easier these days than in years gone by,” he said. “It’s a networking world we live in. The world today is connected through social media. The advent of these resources has made it possible for executives to connect with candidates effortlessly. Getting in touch with candidates however, is only half of the equation. The other half is all about the approach. If you were to look at any job posting on LinkedIn or one of the popular job boards, you’d be hard pressed to see much differentiation between the posts. They all look and feel very similar. With the fascination of AI and non-direct touch communication, the personal touch is fast becoming the differentiator when interacting with prospective candidates. Regardless of the efficiency that software platforms provide, the truth remains that candidate procurement is still a one-on-one personal endeavor.”
As a recruiter, when working with a client for the first time or approaching a client with the proposition to handle a search, much of the initial dialogue is about how to ensure a successful placement that results in long-term tenure of the candidate, according to Mr. Tolan. “No credible recruiter can guarantee retention,” he said. “But discerning recruiters can set the client and the candidate up for a fruitful and profitable relationship. Reasons for bad hires vary, but the No. 1 contributor to making a bad hire is the desire to fill the position quickly. A commitment to be swift in placement can often result in a lower quality candidate and important background information being missed. It’s not uncommon for me to consult our clients to avoid substituting quality for speed. A rapid placement has its benefits but if a placement is completed too quickly it might result in a replacement thereby causing an even longer recognition of success. Successful recruiters follow a regimented candidate vetting sequence. To subvert the steps in the process that has made them successful is to compromise the integrity of the search and the quality of the candidate.”
Other aspects to ensure against a bad hire include diagnostic questioning early on in the search. Many recruiters suffer from what Mr. Tolan calls the “dump the bucket” syndrome. “They’re armed with a job description and bullet points of typical day-in-the-life responsibilities followed by a brief discussion on compensation,” he said. “Little time is spent getting to know the candidate, their personality, and understanding their career objectives. Not having this information can be a liability to search success. It can certainly impact the length of tenure of the newly hired candidate. There’s plenty of information out there concerning what causes candidates to leave opportunities and many times it boils down to misalignment that could have been identified early on in the vetting process. Transparency and thoroughness go a long way to ensure against a bad hire whether the candidate is hired by internal efforts or external recruiting firm efforts.”
“As the market slumps, pricing for these firms drops,” said Juan Gaitan, founder and chief experience officer at Talento Human Capital Management. “Those with cash have an opportunity to buy once higher priced assets at a discount. Owners start to feel weary as the economy fizzles and hiring is impacted as a result. This drives open minded-ness to a transaction of some sort. Those buying have a broader-lens to consolidate and attack functions, industries or particular geographies as they roll up.”
So what is driving sellers? “Owners are seeing a major slowdown in business, an aging owner-base who wants to protect their futures, as well as weak succession plans or dependency on a few key people,” said Mr. Gaitan. “Multiples are sliding down – value diminishing, financing is much tighter , and some are just tired of the grind. Relationships can also start to age or deteriorate on the client side.”
Private equity firms help grow and support a struggling search firm and buying an asset and aligning it strategically with the right platform for growth, according to Mr. Gaitan. “Support can mean the transaction itself or an investment to bring in new leadership or invest in marketing or human resources – many times the story telling and the people side are not where they need to be to sustain the current book or drive growth. Facilitating transactions to secure top value or preserve a legacy – every buyer has a price they are willing to pay – some more than others depending on what they think can do growth-wise.”
Related: Essential Leadership Skills For A “Work Anywhere Anytime” World
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
