Things are about to get weird. Let’s talk about the unemployment rate in the United States. In May of 2016, the U.S. unemployment rate was 4.7%. That is the lowest it has been since 2007. In June the unemployment rate in Austin was 2.9%! I have seen quite a few recessions in my lifetime, but it has been awhile since I have seen unemployment this low. It appears on paper that the economy has turned around. Has it though?
Making sense of all of this is difficult. Candidates thoroughly understand what is going on in the market. Just as I predicted a year ago, the “candidate’s revenge” has happened. There are more open roles than there is good qualified talent available. Candidates are getting bombarded with offers and are getting tempted by every competitor with lucrative and exciting opportunities.
Start-up companies are coming out of the woodwork. Every Tom, Dick and Harry has a brilliant idea and most people are listening. If candidates and investors are going to take risks, then this is the year to take them.
There are simply not enough good recruiters to keep up with the demands either. There is a true shortage. Every company is looking for a recruiter to help represent them and their vision for growth. If you are a recruiter, you are in a pretty good position. I’ve seen what it is like to be a recruiter in a recession and it isn’t pretty.
So, the talent shortage is real. Every company wants to hire the young, energetic, no- experienced individual. Companies are also looking for someone with the EXACT experience that the position requires. That leaves a pretty big gap doesn’t it? What about the other 95% of the individuals who have really good skills but don’t have the exact skills.
Well, as a headhunters, that is what we are paid to find. We are looking for those diamonds in the rough. The purple squirrels that no one else can find. At some point, however, those individuals are going to be harder and harder to find. As the unemployment rate continues to shrink, recruiters will continue to multiply and opportunities are going to be abundant. Plain and simple- It is going to be harder and harder to attract those individuals!
Let’s put an even deeper spin on this for a minute. Yesterday, Microsoft announced that it was buying LinkedIn. LinkedIn has been the primary recruiting tool for the recruiting industry for years and they are no longer the industry leader. LinkedIn is no longer the king! We all predicted this too!! Watch out, the industry is about to be spun on it’s head. As an Austinite and watching Indeed Interactive, my prediction is that Indeed will soon be crowned the industry king. They have some great ideas and some of the best leadership from around the globe are jumping ship to join Indeed.
LinkedIn won’t go away, but there will be some significant changes. Recruiters and candidates won’t abandon LinkedIn immediately and time will only tell if Microsoft can pull them out of the weeds.
I hope for the recruiting industry, Microsoft cleans up LinkedIn and their image. LinkedIn is a huge database that basically grew too big too fast. There are too many people (recruiters, candidates, employers) that are disenchanted with LinkedIn. The model they have simply doesn’t work and people don’t want to spend the money that LinkedIn is asking for them to spend.
So, back to the original question. Has the economy turned around? Is this the new norm for the foreseeable future? Is this candidate’s market going to continue? Is money still going to be dumped into start-ups? I don’t know.
History is not on our side with this one though. It feels like one big bubble that is about to burst, but what the hell do I know?! Look to the graph to the right. I’m just a recruiter. I’ll let you and the economists decide, but brace yourself.
The average tenure for someone staying at an organization is shrinking. Rather than trying to hire the best possible fit who checks every single box, hire for culture and current need. Who knows what the future holds and you need to take advantage of the market while it is hot. The 95% who you discounted immediately can and will make a difference today and may be the ones that stick around when things aren’t quite as hot.
I would love to hear your thoughts. There is far too much going on in 2016 to ignore.