The War for Talent – the battle is turning the candidates way…

However what is happening with the war now? Who is winning? In discussions with businesses in New Zealand and overseas, both large and small, we are hearing that many are now finding it much harder to get good candidates.
I think it was around 2004 that I first heard the phrase the ‘War for Talent’. Back then in ‘the War’, things were very much going the candidate’s way. Employers knew skilled and experienced staff were in short supply. As a Sales Director back then, I was very well aware of the difference that a ‘good’ salesperson could make to delivering revenue. Top performers often delivered multiples over the average salesperson and building a team of top performers was an essential part of my job. Consequently I was really keen to secure good candidates and would pay agencies well if they could help.

The GFC (Global Financial Crash) threw things into reverse of course. HR managers in my observation adjusted very quickly to it now being a buyers market. The tide of the ‘War’ had turned. Indeed attitudes to candidates and recruitment changed with many noting the difference in treatment.

However what is happening with the war now? Who is winning? In discussions with businesses in New Zealand and overseas, both large and small, we are hearing that many are now finding it much harder to get good candidates. In our business, we have an international perspective with close links to UK, European and US business partners both in our technology business and for recruitment in general. What we have been hearing for some months now is that in many sectors the availability of good candidates has tightened up. Good candidates i.e. those with readily marketable current skills and experience in truth have always been hard to find and attract but it does seem recently to be getting much more so.

Getting candidates to actually make the move is especially hard. Perhaps it is the ‘devil you know’ syndrome. But it seems candidates are considerably more wary of making a move if already in employment. Yet we are seeing greater numbers of candidates entering the fray, having a look and testing the market. It seems that a significant proportion of the workforce is feeling restless and are indicating they are interested in making a move. However we are hearing that many are very wary indeed. This lack of confidence in making the move seems very much a result of the current overall business market and the feeling that the recession is still here. Surveys and attitudes seem to suggest they will make the move when the business climate improves. If true this could result in a large number of job moves. We will write a future post on this issue as it will, we believe, have a major impact on employers in the mid-term and perhaps represents a shift to a different relationship between staff and their employer.

However, what does all this currently mean for the New Zealand market?

In our view, assuming you have reasonably marketable skills and experience and are in work currently, you are likely for most job sectors to find that you are now increasingly in demand. Recruitment forecasts are never that reliable but there is much to suggest that jobs-wise the worst has past. Unless we have a second round to the GFC, we will see increasing numbers of NZ employers struggle to fill skilled positions. This will in our view very likely have to result in a change in behaviours from many employers who have behaved as if it has been a buyers market. Expect to see employers making much more of an effort to market to you for many this will be a very welcome change...

If NZ follows international experience, then this will mean provision of much more useful information around; opportunities, the organisation you would work for as well as systems that support better candidate communication from the employer. We may even see more transparency around salaries with them being stated up front in the advert as is done in many other markets.... If only…

The last couple of years where employers have seen relatively few of their employees leave voluntarily is likely to soon be over. Retention ratios are likely to move at least back to the norm and may exceed the historical average (around 20% for NZ). The evidence overseas is that there is now a greater natural propensity to move employer than there has been previously. This is especially pronounced in Generation Y, the younger workers. Corporate loyalty is very weak in that demographic group. The bottom line is that we think you will see significant numbers of staff ‘move job’ as soon as market conditions get better. We are going to write on this topic separately but this does not seem to be just a pent up demand from the years following the GFC. We think we are seeing in many case a change in employee attitudes to their employers and a general shift in behaviour.

In addition to the issue of employee retention above, we believe that it will prove harder to attract good candidates to take up positions. It will in our view need a mindset change from those employers who have relied on it being a buyers market. Candidates will expect much more than they have been prepared to accept in the last few years. Those employers with; strong systems for providing information, for communicating with prospective candidates and who are cultivating their employer brand will secure the better, more in demand, candidates. Others will likely see candidate acquisition costs rise and in addition, see quality drop…

As a recruitment systems supplier I must acknowledge that we do have vested interest in equipping employers with systems than enable best practice. Systems are important as they provide the means. However as much as anything else, employer behaviours and mind-set are the key factor. Candidate expectations from your; process, advertising and treatment of candidates is very likely to rise considerably. This will increase the challenge for those recruiting in employers. Agencies will also not be immune. The agency business model is already under pressure and this will only add to it. Also, if we do see retention rates raise in the mid-term as outlined above this will place further demands on recruitment functions in businesses. All in all it looks to be a challenging time for recruiters.

In the War for Talent, the position of the employer is on the wane, that of candidate is on the rise.