The shift from an employer to a candidate driven job market has put candidates in the driver’s seat and has left employers scrambling to find the talent they need. The lack of top candidates and high competition for skilled talent has created a candidate drought.
In this survival guide, you will learn how to adapt your recruiting efforts, hiring strategies, and your mindset to hire and retain top-performing employees in today’s candidate drought.
SECTION 01 – UNDERSTANDING THE CANDIDATE DROUGHT
The ‘Candidate Drought’ Defined
Why You Need to Adapt
What Are Your Employees Thinking?
SECTION 02 – ADAPTING YOUR MINDSET
Be the Talk of the Town
Create a Stand Out Job Description
Revamp Your Compensation Plan
Craft a Compelling Counteroffer
SECTION 03 – ADAPTING YOUR HIRING
Think Like a Sales Rep – Engage the Right Candidates
Most Effecting Recruiting Strategies
Treat Your Candidate Like a Customer
Create the Perfect Offer
SECTION 04 – HIRING IN THE CANDIDATE DROUGHT IN 2019 AND BEYOND
Always be Recruiting
Hiring and Employment trends
Conclusion and Summary
SECTION 01 – UNDERSTANDING THE CANDIDATE DROUGHT
Whether you’re aware of it or not, the candidate drought is changing the way employers recruit and hire top talent and it’s changing how employees search for new opportunities.
In this section, we will explain how both employers and employees are directly affected by the candidate drought.
THE CANDIDATE DROUGHT DEFINED
First off, you might be thinking, what exactly is the Candidate Drought?
Well, over the past couple of years, the unemployment rate has started to drop. Starting in January of 2017, talented people became scarce. The unemployment rate fell to just under 5 percent in the U.S.
To give you some perspective, the unemployment rate was nearly 10 percent in 2010. Today, the National unemployment rate is less than 4 percent and the U.S. labor market is unusually stretched.
And while the low unemployment rate provides more opportunities for job seekers, it can also spell trouble for employers. The competition for top talent is tough and talent retention becomes increasingly important.
This unique combination of a low unemployment rate, lack of top candidates, and high competition for skilled talent creates what we call the ‘Candidate Drought.’
WHY YOU NEED TO ADAPT
Now that you have a better understanding of today’s labor market, it’s important to be aware of how the candidate drought affects your business.
DIFFICULTY GROWING YOUR COMPANY
As the demand for top employees has increased, the supply of highly skilled workers has dwindled and puts companies in a difficult position. Companies want to take advantage of the booming economy but aren’t able to find the skilled talent they need to grow their companies.
Thirty-six percent of small-business owners had job openings they couldn’t fill in June, matching the record high set in November 2000, according to the National Federation of Independent Business’s monthly survey.
INABILITY TO PROPERLY SERVE CUSTOMERS
While a lack of talent will hinder your company’s growth and potential revenue, it can also create holes in your business where you need talent. Customer service roles that are left unfilled, for example, will cause a negative effect down the line. You won’t have the support staff in place to assist customers, making it harder to retain clients and earn repeat business.
INCREASED WAGES FOR IN-DEMAND POSITIONS
Certain industries and positions are more affected than others by the candidate drought.
Even as demand increases for top talent in the tech industry, for example, the available talent pool remains shallow. When this happens, it creates a highly competitive labor market and wage growth. The wage growth for the technology industry has grown almost 15 percent since 2006 and show no sign of slowing down.
Jobs in the IT industry also see more wage growth depending on which city they’re located. Tech-savvy cities like Seattle, San Francisco, and Boston, all experienced an annual wage growth of more than 3.9 percent for IT positions.
It’s important to know what a competitive salary in your industry is if you want to hire the best talent.
LONGER HIRING PROCESS
The average time to fill a position is 44 days, and that number is up from 23 days in 2014. Today, the hiring process could take even longer since you have a much smaller talent pool to find top candidates.
Make sure your process isn’t too long or you risk candidates becoming unengaged and accepting an offer from another company while they wait for your decision.
CURRENT EMPLOYEE TURNOVER
Today’s hiring environment not only affects your ability to recruit top talent, but it also affects how you approach the retention of your current team. The cost of turnover is extremely high by itself, but it will cost you even more money and time to find a replacement candidate in today’s market.
According to a Gallup poll, of actively engaged employees, 37 percent said they would leave their current positions for a 20 percent raise. It doesn’t take a much higher salary offer to lose some of your most productive and happy employees.
And even more worrisome, 54 percent of actively disengaged employees would consider making the leap to a new job for a raise.
If you have an exceptionally productive or skilled employee, it’s essential to recognize their contributions to your company. If they’re producing great work and not being rewarded for it, they’re likely going to consider new positions.
WHAT ARE YOUR EMPLOYEES THINKING?
The candidate drought not only has an effect on employers, but it also has an effect on employees.
Many employees are looking to take advantage of today’s candidate drought to increase their earnings, find leadership opportunities, and develop in-demand skills.
TOP EMPLOYEES HAVE OPTIONS
Today’s employees know they have ample employment opportunities and know what they’re worth. Job hopping is common during a candidate drought and employers should do everything they can to retain top employees.
EMPLOYEES AREN’T MAKING LATERAL MOVES
In the past, many employees would consider making a lateral move if they were unhappy in their current position. However, today’s employees are happy and aren’t willing to make a lateral move for similar compensation or role responsibility. If you want to hire top talent from your competition, then you need to have a competitive offer.
EMPLOYEES ARE LOOKING TO ADVANCE THEIR CAREERS
Many employees are taking advantage of the lack of skilled employees and are working to advance their careers either by pursuing leadership roles or outside opportunities. If you’re not able to provide opportunities for advancement for your employees, then they’re going to look for a company who can.
SECTION 02 – ADAPTING YOUR MINDSET
As an employer, the candidate drought will not only affect your ability to hire top talent, but it will also affect your ability to retain top talent.
If you want to be successful in the candidate drought, you need to adapt your mindset around your recruiting, hiring, and retention strategies.
BE THE TALK OF THE TOWN
In the past, employment opportunities were scarce. A company could post a job opening on its website and have their pick of eager, qualified applicants to hire.
Today, top candidates know they have many employment options. However, that doesn’t mean they’re actively looking for new jobs. The odds of a successful employee stumbling across a job description on your website or responding to a job outreach are very slim.
On the other hand, if an employee recognizes your brand or thinks your company has a good reputation, then they’re more likely to respond to you. Building your company brand is not something that will happen overnight, but there are ways you can get started today.
ENGAGE ON SOCIAL MEDIA
A great place to start building your brand is on social media. Try to post content that showcases your company culture and why someone would want to work there.
Did your team volunteer at a local food bank over the holidays or have a jersey day to showcase their favorite football teams? These are just a starting point for sharing more about your company and what it’s like to work there.
Also, don’t think of social media as a one-way broadcast. Instead, respond to people who are messaging your brand or talking about your company on social media. Get involved in conversations, hold contests, and interact with your audience.
Remember, the goal of promoting your company culture on social media is to get top employees and candidates back to your website. Make sure your website is in top shape and regularly update content and include any company news or awards.
RESEARCH THE COMPETITION
You should also research the competition. What are your competitors doing differently to stand out and attract top talent? What companies are your current employees leaving you for or where are candidates accepting other offers? You can learn some of this information by performing exit interviews with employees or searching sites like Glassdoor.
Then you can craft your employer branding strategy around what is working for your competition and adapt it for your company.
CREATE A STAND OUT JOB DESCRIPTION
Now that top employees have their choice of employment opportunities, they’re more selective in the jobs they apply for and the offers they accept. Before they even apply for a job, they want to know what the culture is like, whether there is room for growth and even the leadership style of the hiring manager.
If you can paint a picture of what it’s really like to work at your company and sell the opportunity, then you will attract the right candidates to apply to your position. If you want to create a unique job description that stands out from the competition, consider adding these elements:
- A catchy opening sentence to grab candidates attention
- Company culture and workplace environment
- Perks and benefits
- Responsibilities and key tasks
- Compensation or salary range
- The contribution the employee will make to your team
- Hiring manager’s personality and approach
- Promote the hiring manager’s leadership style and how long people have stayed under that individual
- Language that embodies your company’s personality
- Bullet points
- Company name, logo, and contact information
Don’t be afraid to stand out and stray from the norms. You’re trying to attract people who will be the best fit for your company and crafting an appealing job description is one of the best ways to do that.
REVAMP YOUR COMPENSATION PLAN
The competition for top talent today is at an all-time high. If you want to beat out your competition and hire a key employee in today’s candidate drought, then you need to offer a competitive compensation package.
Employees have done their homework on sites like Glassdoor and Payscale to find out exactly how much they should be getting paid. They’re not going to accept similar or low ball offers from employers. If you do try to low ball a top candidate, then you’re going to lose out on them to your competition.
If you don’t know what is competitive, then do your research. Seek out a compensation specialist or salary guide to find out what the market is paying for certain positions and skill sets. You can then develop your salary ranges around that data.
Similarly, in order to retain the talent, you already have you will also need to research competitive salary ranges. While your employees may not be actively looking for a new position, they may still be tempted to leave if offered a position with more money.
According to a Gallup Poll, a pay bump of 20 percent or less is all it would take for employees to consider taking a job with a different company.
The best thing you can do is make sure your current employees are being compensated competitively so they have less of an incentive to leave.
Even if you think your employees are well compensated, you should double check. What was competitive even six months ago, depending on your industry, may be outdated today.
CRAFT A COMPELLING COUNTEROFFER
After an employee resigns, you have one of two choices – counteroffer or let them go.
Now in the past, we would advise employers to let them go. This is because there is most likely some disgruntlement that underlies their decision to leave, questions about their long-term commitment, and setting precedents that other employees may follow to get a similar counter-offer.
However, in the candidate drought, you need to shift your mindset when considering a counteroffer. As we mentioned above, the National unemployment rate is less than 4 percent and the average time it takes to fill a position is 44 days, and it can take you even longer to fill a position depending on the role and industry.
Based on those numbers and today’s unemployment market, we would recommend presenting your top employees with a counteroffer. Use the steps below to come up with a counteroffer that will entice your top talent to stay with your company.
(For a more detailed explanation of the steps you should take before making a counteroffer, check out this post)
- Maintain composure and change the focus of the discussion from resignation to retention and learning.
- Find out why your employee is leaving. Learning this information early on is especially valuable since the majority of reasons why employees quit their job are under your control.
- Ask your employee if they would be open to exploring the idea of staying at your company. If they say yes, then repeat back their reasons for leaving and tell them you’d like 24 hours before you come back with a solution.
- Create and present your new offer. Pay attention to why your employee wanted to leave in the first place and work to address those concerns.
- In the end, your counteroffer will either be accepted or rejected by your employee. And even if it doesn’t go your way, you have to remember that if you never asked your employee to stay, then there was a 100 percent chance they would leave
SECTION 03 – ADAPTING YOUR HIRING
Once you’ve adapted your mindset to hiring in the candidate drought, you need to create a hiring strategy to match.
In this section, we will go through each stage of the hiring process and what improvements and adjustments you can make in each one to improve your chances of hiring the right candidate.
THINK LIKE A SALES REP – ENGAGE THE RIGHT CANDIDATES
An outdated recruiting strategy is waiting around for top candidates to apply to your job posting.
When talent is scarce, your recruiting strategy needs to focus on pursuing and engaging with your preferred candidates, not waiting for them to come to you.
LINKEDIN TARGETED RECRUITING STRATEGY
Many employers believe a LinkedIn recruiting strategy consists of reaching out to professionals in your network. However, a true LinkedIn recruiting strategy is much more involved.
If you want to make sure you’re hiring the best talent for your position, you need to see the best talent out there. And you’re going to be limited to your connections if you only use your personal LinkedIn account to recruiting.
Instead, you need to look into LinkedIn’s subscription options if you want to hire the best candidate for your position.
A subscription to LinkedIn Recruiter allows you to see profiles outside your network and you will have access to 100 InMails per month. You can use these InMails to reach out directly to potential candidates about your open positions. InMails are a great way to get candidates to respond too — the response rate is three times higher than a regular email.
However, these features don’t come without a price. A subscription to LinkedIn Recruiter can cost upwards of $6,000 per user each year. And, having a subscription doesn’t make candidates magically appear. You still need a skilled user that is able to find the candidates that fit your needs. Candidates are less likely to respond to job opportunities during this low unemployment market.
SOCIAL RECRUITING
LinkedIn isn’t the only effective way to target top candidates. Facebook and Twitter are also a great way to narrow the candidate pool more effectively and quickly find targeted, qualified candidates. These sites have search criteria that will help you narrow down your ideal candidates.
According to Jobvite, 83% of job seekers prefer Facebook over any other social network. It’s also a great option if you’re looking to hire Millennials. 73% of 18-34-year-olds found their last job through social media, according to Capterra.
A few ideas are to help reach the right candidates are to amplify your message using a consistent posting schedule, promote your employer brand with images and videos, and even create your own Facebook groups and discussions.
There are many ways to use social media to recruit top candidates, but you will have to try out and test which strategies work best for your target audience.
NICHE JOB BOARDS
Finally, another great way to get your job description in front of the right people is to use niche job boards.
There are job boards for specific industries, regions, and even job function. Many professional associations and clubs will also have their own job boards for their members.
While these niche job boards won’t have the volume of using LinkedIn, you will have access to candidates with more specialized skills and relevant experience.
Niche job boards are also a great option if you’re in a high-demand technical industry or if you’re looking for candidates with a unique skill set or expertise.
MOST EFFECTIVE RECRUITING STRATEGIES
If you’re having trouble recruiting top talent in today’s candidate drought, you need to turn left. And by that, we mean you need to stop recruiting using outdated methods and try new strategies that are proven to work.
INVEST IN YOUR RECRUITING TEAM
Do you have the right people devoted to recruiting and hiring top talent? It takes a lot of sustained effort to find the right candidates and you can’t expect to find the best talent if you’re only recruiting part-time. In fact, on average it takes 45 days for a company to identify and fill their open position.
Many companies don’t have the time or resources in place to perform all of the necessary tasks needed to hire top talent. Some of these activities include:
- Creating a job description and sourcing top candidates (20 hours of labor)
- Reaching out to candidates on the phone, email, and LinkedIn (30-40 hours of labor)
- Following up with candidates who don’t return your messages (7 hours of labor)
- Performing qualifying interviews and in-person interviews (30 hours of labor)
- Reference checking and assessment (15 hours of labor)
- Craft and extend an offer (5 hours of labor)
If you don’t have the time or resources to devote to finding top candidates, then you should consider partnering with a recruiting expert.
Not only will a recruiting firm be able to devote the necessary time and resources it takes to find a talented professional in today’s candidate drought, but they will also have access to the most talented professionals.
Recruiting firms work to find candidates every day and have robust networks of qualified professionals. They also have the necessary LinkedIn subscriptions and databases needed to find passive talent and skills needed to entice them to your open job.
EXPAND YOUR SEARCH CRITERIA
Another effective recruiting strategy in the candidate drought is to expand your search criteria. Doing so will help you greatly increase the size of your talent pool and help you find qualified candidates quickly.
Some areas you can consider opening up are the requirements, background, location, industry, work schedule and experience level.
For example, could you open up the location requirements to include remote talent? The job market is saturated in large cities but having a remote position would enable you to hire top talent from anywhere in the country.
Or you could consider opening up the background requirements. In the past, employers have overlooked candidates who had taken a sabbatical or candidates who are transitioning from a radically different field. In today’s market, if you find a great candidate with a good background, you should take a second look.
And finally, consider hiring talent from other industries but with relatable skills. There are many benefits to hiring candidates outside your industry, including fresh ideas about ways to go to market.
CONTRACT STAFFING
In today’s candidate drought, hiring top employees on a contract basis a great way to access to top talent and quickly hire the talent you need.
According to Randstad Sourceright’s 2017 Talent Trends Report, more HR leaders are turning to a contingent workforce due to rampant skill shortages and a lack of qualified and available talent. The Randstad report shows 80% of HR leaders think their organizations will be affected by the scarcity of talent this year.
Unfortunately, there is a misconception that employees working on a contract basis are just looking for full-time positions and are not as talented as full-time employees. In fact, just the opposite is true. Those who work on contract are hard-working, and they are looking for rewarding, well-compensated experiences, just like any other employee.
Whichever option you choose, make sure there’s a dedicated person on your team or an outside resource to drive and lead your recruiting efforts. If you’re not willing to put in the hours to call, email, and text candidates, then you’re not going to find the right candidates, no matter which strategy you choose.
TREAT YOUR CANDIDATE LIKE A CUSTOMER
Once you’ve found top employees that are interested in your position, your job is not over. Top candidates will be observing your every behavior, especially throughout the hiring and interview process.
They will be watching how fast you respond to their emails and communication. If you take too long to respond to them or stop responding completely, this reflects poorly on your employer brand.
While giving this type of candidate feedback is voluntary and may not seem productive or worth your time at first, in reality, it helps to improve the candidate experience and is a major factor in building a competitive employer brand.
Throughout the interview process, you need to be giving your candidates feedback. Reach out to them every few days to ask how their day is going, even if you don’t have any real feedback for them yet. They’ll appreciate you going the extra mile for them.
If a candidate emails you or has questions, make sure you respond to them immediately. It’s the little things that will make a candidate feel special and important in your process. And the more interaction you have with your candidates, the less time they will have to talk to competitors.
Another area to pay attention to is who is on your interview and what they’re telling the candidates. If your interviewers tell candidates conflicting stories or appear to be a drag, then these can be red flags for candidates.
Overall, everyone who interacts with candidates – from the initial phone screen to the in-person interview – is a reflection of your brand. And you need to be aware of how these interactions are affecting your hiring process.
CREATE THE PERFECT OFFER
And finally, just because you make a top candidate an offer, doesn’t mean they will accept. Top candidates often consider multiple job offers at once and will accept the offer that is most in line with their needs.
However, there are strategies employers can use to increase the likelihood of candidates accepting their offer and beating out the competition.
ASK THE RIGHT QUESTIONS
One way to figure out your candidates’ motivations and interest in your position early on in the interview is to ask them the right questions. Start off by asking about whether they’re interested in new opportunities or what it would take to get them to make a move. Finding out this information early in the process will save both you and your candidates a lot of time down the road.
Another good conversation to have with a candidate early on is why they want to leave their current company. Once you understand what is motivating them to leave, you can reinforce this with them throughout the hiring process. Remind them why they want to leave and why you’re the better fit for their long-term objectives.
ADDRESS THEIR CONCERNS
Once you’ve uncovered their motivations and possible concerns, you should work to ameliorate these concerns throughout the process. For example, you can say ‘I’m hearing that you’re nervous about xyz, what can I share with you about our company to help ease your concerns?’ Oftentimes, candidates will want to know about your company’s financial standings, your projected plans, and job specifics.
And remember, most candidates are doing well and business is good overall. In sales especially, candidates view starting a new job as a risk in starting over in their compensation and commission structure. Make sure you can overcome their objections and think about how to compensate them while they ramp up to make it worthwhile for them to join your team.
MAKE IT COMPETITIVE
The world of work is changing quickly and what was once considered a competitive salary a few years ago, might not be competitive today. So how do you know if your job offer is competitive?
You should start by doing your research. Look up current salary trends in the market and even in your industry. Use salary guides or reach out to a compensation specialist to help you determine the right amount to offer for your role.
Also, listen to what your candidates are asking for in the interview stage. For example, maybe flexible work hours are extremely attractive to one candidate but another candidate is worried about ramp-up time and would prefer a sign on bonus. You have to be flexible and look at what is important to your candidates when crafting their job offer.
TIMING IS KEY
Momentum is key when moving through the hiring process and this becomes even more essential when you get to the offer stage. You need to keep a steady cadence of communication to keep the candidate engaged. If you lose momentum, the candidate will start viewing that as a reflection of how your company does business, how you communicate internally, and what your company culture is like.
And most importantly, make sure you communicate with your candidate how long it will take for them to hear about a job offer and then deliver on what you say. Don’t tell them it will take a week when you know it will take longer. It’s better to be upfront and then continue to communicate with them while the offer is being crafted.
SECTION 04 – HIRING IN THE CANDIDATE DROUGHT IN 2019 AND BEYOND
The candidate drought is not going away any time soon so you need to be prepared for this trend to continue. Fortunately, there are ways you can stay ahead of the candidate drought and anticipate potential hiring roadblocks.
ALWAYS BE RECRUITING
Even if hiring is not an urgent need for your company at the moment, chances are, you will need to make some crucial hires this year. The best thing you can do is to start anticipating potential new hires you will need to make in the future or potential turnover.
You can connect with employees on LinkedIn and talk with them about potential job openings in the future. Build a friendly relationship with them and check in with them every so often to see how they’re doing. Then, when you do need to make a hire, you will already have qualified, interested candidates.
Also, recruiting firms are extremely skilled at this tactic. They’re always recruiting top talent, and oftentimes, out of dozens of qualified candidates, only one person gets the job. However, they will stay in touch with these candidates for future jobs. If you need some assistance forming these relationships, then reach out to a recruiting firm in your industry or who focuses on the positions that are most difficult for you to fill.
HIRING AND EMPLOYMENT TRENDS
It’s also important to stay on top of current and future employment trends. For example, many positions that were not even around ten years ago and now in very high demand.
Also, according to a new study by Clutch, 39% of small business hires this year will be sales and marketing staff, followed by customer service and IT. Sales and marketing roles drive a company’s growth but can be difficult to find. If you’re also planning on hiring sales and marketing staff in 2019, you need to start recruiting today.
If you can stay on top of these trends, you can find the best talent early on and not have to pay a high price.
CONCLUSION AND SUMMARY
As we look forward into 2019 and beyond, the employment outlook remains positive for job seekers and difficult for employers looking to hire top candidates.
In fact, according to a recent CareerBuilder study of prospective hiring and recruitment trends, half of the HR managers polled said they couldn’t fill open positions due to a lack of qualified candidates, even though those candidates exist.
Also, the 2019 figures are similar to the 2018 findings, which were 44 percent and 51 percent respectively. These numbers show us that the candidate drought is not going away anytime soon.
If you want to be successful in the candidate drought, use the strategies and tactics detailed in this article to help guide your recruiting and hiring plans.
