By Brian Mitchell, Managing Partner & CEO
In March 2020, the world stopped in many respects including hiring. In the second quarter, companies laid off significant numbers of staff from junior team members to C-level executives and froze hiring in many departments no matter how great the need. In times of uncertainty, cash is king and smart operators do what they need to do to conserve capital for lean times. It can be harsh for individuals, but captains need to ensure the whole ship doesn’t sink. That’s just business. The same environment took shape in late 2008 when the global economy sunk to near unprecedented lows and the underlying housing and mortgage crisis took hold. It was like a faucet was turned off in terms of hiring and it was a scary time as a professional recruiter.
During Covid, the job world was a “company driven market” meaning companies could be highly selective on the few roles they continued to fill or backfill, and had many many candidates to consider. The tables are now turning. Widespread vaccinations are becoming commonplace, public places and facilities are opening up, people are getting out of their homes and consumer spending is increasing, and there is a general sense of optimism and confidence in the air. Along with that optimism and confidence, companies are reinvesting in their personnel in many areas and institutional investors are pouring more capital into new or existing ventures. The bottom line is that a lot of capital that has been parked on the sideline is being fed into businesses again, and when that happens hiring can be explosive. During the first half of 2010, about 12-18 months into the “great recession”, many industry sectors started to hire again particularly in tech spaces like software, internet, data, and health. And very soon thereafter, it was gangbusters as the economy came roaring back, unemployment eroded to all-time lows for white-collar jobs, and businesses invested in new tech, new innovations, new markets and models…and new people. That is what is starting to happen again now.
Are you ready for a “candidate-driven market”?
Candidate-driven markets are characterized by the inability of companies to fill critical leadership roles (or even tactical line-level roles) with high-quality candidates at fair market compensation. Simply put, candidates have more options and exceptional candidates can dictate their own terms in many cases. Good people are not “lucky to have a job”, rather they’re highly marketable and become more passive and selective as demand for their competencies goes up. So, as CXO of your company or division, what can you do to compete for that difference-making talent?
- Throw money at the challenge. This doesn’t seem terribly creative, but it often works. Companies that can pay higher salaries are in a good position. That said, companies who can offer lucrative variable compensation incentives such as commissions, bonuses, profit sharing, and tie them to individual goals or departmental or company objectives are most fair to the company. Paying someone for over-performance is a fantastic problem.
- Throw ownership at the challenge. Stock options for private companies are motivating for some and not for others. However, employees who are motivated by the company doing well tend to have some skin in the game. These are the type of people who never say “that’s not my job” and the people you want on board. RSU’s and other grants which vest and pay annually are terrific incentives to keep people around for the long-term. In general, owners stick around and are enthusiastic about their organization.
- Give them more. Hiring execs tend to want someone with the proven experience to ‘plug-n-play’ into their needed role, someone who has already done it. The problem is that great people don’t want to move laterally. Why would a high-performing, well-paid, and well-respected SVP of Whatever leave their current situation to lead the same function at your company? Give them more. More scope of responsibility, a new initiative, a product to build or transform, a new market to go after, P&L accountability vs. just budgetary. People want to be challenged so stretch them and help them grow.
- Be inclusive. Yes, you need a job to get done, but you need to bring A-players into the tent to contribute to strategy and direction, not just execution and management. Give them a voice, ask their opinion, have them deliver information to others when appropriate, empower them.
- Inspire. If you don’t believe in the company or opportunity, why should they? This is simple – you need to evangelize the vision and opportunity and do so authentically.
- Run a tight process. I see SO MANY MISTAKES here. Strong candidates are turned off by sloppy processes, a lack of defined steps, gaps in communication, the key hiring exec vanishing through stages. Explain the process up front, carry out that process, stay communicative throughout, provide material for their digestion, provide demos, keep them as engaged and interactive as possible. If your competitors take hiring seriously and you don’t, guess where the preferred candidates are going?
The war for great top-tier talent never truly stopped, but it’s about to be amped up again in a big way. Average candidates will have options and you don’t want your options to be average candidates. Recognize the hiring wave that is coming and prepare your company to attract and keep the best of the best.