Throughout her 20+ years working in the recruitment space, Andrea MacMillan, director of our permanent search practice, has never seen a labor market quite like this. We spoke with her recently about the current challenges and opportunities facing employers and candidates alike.
What’s your assessment of the current hiring market?
I have never seen a hiring climate like this one in twenty years. It is so competitive and super-heated; it’s like the housing market. Good candidates are in the driver’s seat, and they are changing jobs more frequently to make more money. Even if they’re in a position they love with people they love, they will leave if they can get a significant jump in salary that their employer cannot match.
So, employers are having to match or beat offers?
If they want to keep someone, yes. The top candidates can elicit multiple competing offers, and they often use that as leverage with their current employer to seek more money or a promotion. In some cases, they are not even completing interviews; they just get far enough along to be able to tell their boss that they have another opportunity that pays better.
As a recruiter, how do you sniff out candidates just interviewing as a negotiation tactic?
We do our due diligence and screen heavily for why candidates are interested in making a move and what is motivating them to change jobs. If they are going to make a job change, we want to know where they are in the process with other offers and opportunities to gauge if we are wasting our time or if someone is sincerely interested in our client.
Suppose a candidate is trying to leverage their employer. In that case, we encourage them to withdraw from the process and let us counsel them on how to get an increase or promotion without wasting our client’s time or potentially burning a bridge.
How has the Work from Home trend changed the market?
It’s huge—a fundamental shift in how companies hire and how candidates approach their job searches, especially in IT.
If you are an employer, the biggest benefit is opening up the talent pool. Hiring is nationalized, and there are also some savings and efficiencies on the front end of the process. For example, you are not flying candidates in for interviews, and you’re not paying for relocation. In the two years since COVID, we have only had one candidate go onsite for an interview, and only a couple have physically relocated to new jobs.
If you are a candidate, your opportunities are nationwide, even global, and if you don’t want to uproot and move, you don’t have to for most jobs, with some exceptions, of course.
Have salaries nationalized as well?
Overall, salaries have gone up since last year, and yes, localized salaries are less relevant because candidates can live wherever they want. That is why it is so crucial for employers to do regular compensation analysis and, if necessary, bring their IT people up. Unfortunately, many institutions do not have flexibility within their salary bands to match the marketplace or make exceptions for specific roles. They will lose out on some good talent as a result.
What are employers to do if they have less flexibility on salary?
They have to cast a wider net. Some organizations are still looking for local or regional candidates but doing a national search and having some flexibility around a hybrid or remote work situation helps.
Some candidates will make a lateral move if they are genuinely interested in the work and the hiring organization, if benefits, workplace culture, and title align. Of course, paid time off is also very important, and for more senior candidates that are further in their career, retirement matching and a pension make a big difference.
We also encourage employers to tighten up their hiring processes. If you can interview and make hiring decisions quickly, you have an advantage over organizations that drag their feet. Hiring managers used to lead with a decent offer toward the lower or middle end of their salary range. Now, they need to start with their best offer if they truly want to hire that candidate because that candidate likely has multiple competing offers.
Put us in your seat, if you will. What do you think about your job amidst all this change in the market?
It’s never dull (chuckle). But I love it, and I think clients now more than ever appreciate working with an experienced search or staffing firm to help them navigate this market. Ours is a unique vantage point in that we are recruiting for senior roles all over the country. We know what different institutions are doing well, and we generally have a broader view of salaries, hiring trends, and the candidates’ motivations. Beyond the day-to-day recruiting, I view my job as one of acting as an advisor to our clients and helping them process all this information and all the changes of the past few years.
But at the end of the day, it’s still about finding that perfect match. It is incredibly satisfying when I can put a candidate and employer together and know that it will be a good, long-term fit for both sides.