According to the Bureau of Labor Statistics, unemployment in the United States has continually dropped over the past year. As of November the number dropped to 7.0 percent, down from 7.3 percent.
So, we must ask ourselves — how does the improved economy affect employer recruiting initiatives?
While organizations should maintain the same overall headhunting strategies as in any economy, some adjustments are necessary. Since adaptation is crucial, it’s important to take a look at the challenges hiring managers ought to expect when staffing employees.
Only when we define these hurdles is it possible to formulate and implement strategic solutions to over-leap them.
The primary staffing hurdles that surface as unemployment subsides consist of the following:
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- Supply and demand fluctuates (and increases) applicant price. In a competitive market, salaries and commission packages must align with what other employers are willing to compensate their team members. Since employees are less apt to leave their current position due to the potential of a bonus or promotion at their current job, a strain is put on the supply of available hires. This means more companies are vying for the same job seekers. Naturally, this will result in costs (both base salary and bonus packages) edging upward.
- Quicker recruitment processes become the norm. An improved economy means heightened opportunity costs (i.e. lost potential sales) when organizations don’t have the manpower to service clients. Moreover, the longer the interview and hiring cycle is, the better odds organizations will lose applicants to other offers along the way. Managers and HR representatives must maintain accuracy despite speedy search methods. The staffing process has to mitigate turnovers and ensure return on investment on the part of the new hire, in a good economy or a bad one.
- Non-salary demands of job seekers rise. In an environment of dropping unemployment, applicants’ expanded choice of positions leads them to negotiate intangibles such as working from home, expensive health reimbursement and other non-W2 facets of the comp package that require both budgetary and management flexibility.
In order to optimize employee staffing, hiring managers and HR representatives must rise to the occasion and meet the challenges head-on. Here are four ways to do so:
- Increased organization – Since opportunity cost and the likelihood of candidates getting other offers increase with a better economy, companies must move rapidly. Thus, increased organization is necessary throughout the process. This includes keeping candidate profiles readily available, scheduling interviews one after another, having a comprehensive job description and donating the right amount of time to get the search done within a timely window.
- More attention to marketing – Although my staffing agency has recruited for organizations with no website, this makes the executive search process more difficult on the part of the employer. Employees want to work for firms that portray a positive, confident and well-groomed image.
- Recruiting based on tomorrow’s potential rather than today’s qualifications – As jobless numbers subside, highly specialized employees become harder and more costly to recruit. To combat this, recruiting for tomorrow’s potential becomes a more viable option and also gives the employer more hires to choose from.
- Flexibility in fringe benefits – Whether your company has significant cash to throw into budgets for commute reimbursement and gym memberships, or whether you are hiring at a startup firm running on razor-thin margins, any company out there can signal to job seekers that they are forward-thinking and employee-friendly, a huge benefit as unemployment drops. For instance, offering the option to telecommute once a week after a trial period of three months signals to your prospective new hire that your firm is more interested in their productivity over the long haul than in their reporting to the office just to show up.
The more things change, the more they stay the same. While a recovering economy and dropping unemployment has clear effects on the supply/demand of job seekers and the companies they consider, the basic best practices of hiring never change.
Companies that approach the hiring process with organization, open-minded criteria, and the ability to offer job seekers trust in the form of non-monetary benefits will always have their pick of the candidate pool.