2015 -10 Realities of the Executive Talent Market: The Good & The Bad
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Companies are in “blue sky” hiring mode
10 reasons why that’s both good and bad:-
“Blue sky” hiring mode? Is that an industry insider phrase? Not exactly, but it does serve to describe the current state of executive hiring in which we find ourselves as we enter 2015. Perhaps it may benefit both corporations and executive candidates to offer a brief review. Here’s the meteorological decoder ring:
Companies traditionally slow down executive hiring when they are either experiencing recession, or have recently come out of one. This stage we can refer to as either “clouds overhead” or “in the rear view mirror.”
Companies behave the same way when there are worries about an economic slowdown—“clouds visible ahead through the windshield.”
When companies see neither clouds in the rear view, nor through the windshield, we can call this the “blue sky” phase. This is the phase many industry sectors are experiencing today.
The good in the blue sky hiring phase?
• Unemployment drops: More are earning, and the trickle-down effect for the economy benefits all.
• Compensation & promotions increase: Employees can improve their compensation, the opportunity for promotion, or both.
• Employees are easier to woo to another company: For employers, employees are less conservative about switching employers, feeling emboldened by stronger economic conditions.
• New positions are opened up that didn’t exist prior: Completely new positions that require new hires materialize: New executive positions are created for the first time due to corporate growth and expansion into new markets, new geographies, and new products.
The darker impact of the blue-sky hiring phase includes the following:
• Increased job volatility: Many positions are put out to search, and these bidders drive up the volume of job changes, generating greater attrition of those who are more often the “A” talent.
• Increased compensation packages: These bidders also drive up the cost for talent due to the strain on demand for it and the increase in bidders for that talent.
• Higher search fees: Executive search firms get busy, also driving up the cost of talent acquisition as search fees are driven up by pressure created by the ensuing imbalance of supply and demand.
• Shorter hiring windows: Decision times for companies to evaluate individual executives often drop because talented candidates are presented with multiple simultaneous opportunities and offers.
• Longer searches: Length of searches often increases, because it is harder to find a deep slate of finalist candidates who all remain available in parallel.
• More new employment offers get counter-offered: These counter-offers are put forth by employers who are pressured by employees who seek to resign for better opportunities in an effort to reverse their decisions to resign and remain in their current roles.
There is no doubt that the blue-sky hiring phase is symptomatic of a healthier economy and greater prosperity for many. However, it does come with a parallel set of challenges of which we might all benefit from being reminded as corporations continue to grow in the New Year.