A tight labor market typically means that unemployment numbers are low and that employers will be fighting over a smaller pool of candidates to fill open positions. While those conditions are currently present in the “Gig Economy,” the shifting nature of employment and the pressure on workers to remain upwardly mobile have changed the way employers should approach that fight for talent.
One of the big issues facing candidates and recruiters in this current labor market is that employers are not just fighting over a small pool of candidates—they’re fighting over the top 10% of that small pool of candidates. Companies don’t look for jack-of-all-trades executives; they look for high brainpower. Finance experts need to have knowledge of tech, and operations execs need to boast HR skills. Companies of all sizes and structures, particularly start-ups, want the highest level of talent who can hit the ground running with a very small learning curve.
On-the-Job Training Is Out
Many employers no longer want to invest in on-the-job training or allow their candidates to grow into a role. This could be due to the shifting approaches that Millennial and younger generations are taking. Working the same 9–5 office building job and working your way up the corporate ladder over a few decades are practically unheard of these days, and plenty of people jump from role to role and company to company every 2 or 3 years as a matter of principle. Always seeking out a better position, a better culture, a more prestigious title, or a higher salary is common practice among workers, even those who are relatively happy in their current roles.
Employers wonder why they should invest in training someone they’ll only have for a couple years, and who can blame them? The problem then becomes how they can land one of those 10-percenters they ostensibly won’t have to train. Will they spend more time looking for that person than they would training someone slightly less qualified?
In this environment, start-ups are sharks circling the talent pool waiting to jump on the biggest fish, and they will fight each other hard to reel it in. Tight labor markets usually mean employers come out strong with big offers. Throwing money at a problem can certainly be helpful sometimes, but that doesn’t always cut it, especially in start-up/Millennial employment culture. The paycheck isn’t the sole motivator for everybody, but neither are perks like work-from-home time, ping-pong tables, and beef fridges.
Making Your Company a Desirable Place to Work
One of the best ways companies can attract the highest echelon of talent is by making themselves places those people want to work for. The prestige of certain names on their résumé can be enough to get those people to make a career shift. By that same token, companies that are perceived to be on the way out or no longer leaders in their field will have a harder time drawing up-and-comers, even with big money offers.
So other than money, what makes a company attractive?
Name recognition alone does make a difference, but even then it can’t be guaranteed. People know the names JC Penney and Sears, but those are brands that are perceived to be on the downslide, so a promising start-up could still be more attractive to a top-tier candidate.
Culture is important, but now that every company knows that, a few office perks and some remote work privileges won’t make you competitive. You have to go above and beyond the basics of “workplace culture” to make your company stand out.
Corporate Responsibility Is in
A more recent phenomenon has been the increased emphasis on social awareness and corporate philanthropy. Millennials and younger generations in particular want to work for companies that align with their social values, as well as their economic needs. Companies with a conscience and a well-documented values system that participate in philanthropic efforts as an organization and give their employees time to pursue their own causes are in higher demand among candidates.
Companies that are looking to stay competitive in top-tier recruiting should understand that people are increasingly demanding a different kind of employment. In a tight labor market, being considerate of the demands of your candidates can mean the difference between you scoring one of those top 10-percenters and losing out to another company.
James Philip is the founder and managing director of global executive search firm JMJ Phillip Holdings, where he serves as a subject matter expert for the recruitment of supply-chain, manufacturing, and technology positions. Having more than 20 years of experience growing brands and businesses from the ground up, Philip also founded Heavy Hitter Holdings, which is home to more than a dozen brands spanning recruiting, market research, human capital consulting, digital marketing, CPG products, music, digital media and publishing, and start-up investing.