Market Impacts Of Changing Candidate Expectations & Cautious Hiring Practices
Despite a high volume of job listings, the time to hire has increased significantly. Why?
Let's have a look at some of the reasons.
Candidate Expectations Have Changed
Candidate expectations have undergone a transformative shift in the post-Covid job market. The current scenario reveals a more discerning candidate pool than ever before. A very high percentage of the current market is built up of passive candidates.
What is a Passive Candidate? Someone who is open to a move, and who will move, but they are not unhappy in their current role, and will only move if all or most of their expectations are met. Passive candidates hold very specific and narrowed expectations.
For these individuals, the key factors influencing their decisions include:
location preferences
hybrid policy
flexibility & work-life balance
benefits & annual leave
salary, which I’ll come back to
Candidates are more focussed now on working within commutable distances with most favouring a maximum commuting time of 45 minutes or an hour for 2-3 days per week.
Flexibility has become paramount, particularly in embracing hybrid work models, with candidates seeking simplicity in their commute.
Aside from tangible factors, it goes without saying that candidates still place a high emphasis on intangibles, such as finding a role that aligns with their career goals and interests. Cultural fit, mentorship, and reporting structures, but whilst these were once the main drivers, they now stand on a par with the tangible factors mentioned above.
Benefits, including healthcare, maternity leave, and annual leave, have also become substantial determinants of a candidate's willingness to move. Lifestyle benefits, such as work-life balance, now take precedence over traditional perks, reflecting a broader societal shift in values.
Disjointed Salaries
Salary structures in Ireland have become disjointed. Over the past two years, the job market experienced significant fluctuations. Post-Covid, a surge in job changes triggered a war for talent, which in some cases led to significant salary increases.
Many of these candidates who received increases now make up a large proportion of the passive candidate pool, but are mostly priced out of the market due to their higher than average salary.
So ultimately there is a standoff.
Was the great war for talent driven by the tech industry? And if so, are the other industries now dealing with the consequences, now that there is a ‘tech recession’? We also have had the cost of living crisis and inflation narrative which impacted salaries in some sectors.
The reality is that many companies now face challenges in aligning salaries with candidate expectations.
Challenges for Companies
So, what we have now is a bit of a stale-mate when it comes to salaries. But this isn’t the only stale-mate taking place.
Employers, for the most part, when hiring have a clearly defined expectation of what they are looking for, they want A, B, C, and they also want X, Y, and Z, and they will not compromise.
Why Won’t They Compromise?
They won’t compromise because whilst a lot of these positions are very important, they're not always deemed critical by the business. Employers will often leave them unfilled for longer, which puts more workload on the existing team. Yet another factor that contributes to having a disengaged workforce.
On the flip side, candidates have also become quite passive. I've never known a job market with so many passive candidates before. More than ever, candidates are also less likely to compromise. After all, they are in no rush, so why would they compromise?
So unless a candidate has A, B C, and X, Y and Z and the company meets all the candidate's expectations, no one’s budging.
Another challenge for employers is the parity with their existing staff. For example, if you've got a team of ten and they've all got their different commuting requirements, e.g. two days from home, three days from home, plus certain variations in salaries. The disparity between the existing employees and the external market will create more issues for employers.
Cautious Hiring Practices
Companies are also cautious due to scar tissue left behind from previous hires and a fear of potential turnover spikes.
For example, when hybrid working initially set in, it expanded companies’ geographical reach for talent, but as the balance shifted back towards office working (even if only for 2-3 days per week), employees sought roles closer to home. So now candidates have become more localised again with their searches.
The simpler times of the ‘bums on seats’ era when employers were less specific and more willing to offer training have gone. Companies want the proven article, the safe pair of hands, and are less willing to hire someone who needs development.
Why is this happening?
I can only think that it is a combination of business pressures, and the new remote/hybrid working style affecting time teams spend together.
The companies that are suffering most, are the companies that were still stuck in that kind of pre-COVID sort of bubble, where they might be offering decent salaries but they're just not offering very good flexibility or work-life balance. They haven’t adapted.
As we head into 2024, the job market reflects a societal shift towards prioritising benefits, work-life balance, and well-being over traditional parameters. The key, I think, lies in understanding and adapting to this evolved landscape, where caution and discernment shape the employment journey.
Companies need to be agile when it comes to flexibility, and hybrid working. It's not a one size fits all. For example, a HR Manager may be travelling three hours per day to get into the office, only to sit and have Teams/Zoom meetings with global stakeholders. Is this logical?
HR professionals understand the business and its needs come first, so if key stakeholders are onsite and working onsite for X amount of days has clear benefits then you rarely hear an argument.
Problems arise when a blanket approach is taken, and people are asked to unnecessarily spend endless hours commuting due to company policy.
Maybe CEO’s aren’t listening to their HR partners, maybe HR doesn’t sit at the top table, or decisions are being made at a global level. Each company has its reasons, but understanding the business and making decisions at a local level has never been more important.