“The number one reason companies succeed, struggle, or fail is who they hire,” according to John Younger, co-founder of the RPOA. But hiring is becoming extremely competitive in the current U.S. economy. Job openings increased to their highest levels ever in July 2015, with reported 5.8 million open jobs according to U.S. Bureau of Labor and Statistics. Within the industries, the largest increases between 2014 and 2015 were in real estate and rental leasing (37.8%); health care and social assistance (25.5%); and professional and business services (24.6%). See the full industry list here.
What are the current job market conditions from a professional recruiters' perspective? In this edition of #AskAnRPOExpert, Pam Verhoff, president of Advanced RPO, describes the job market from her experience working with RPO customers across industries in the country.
RPOA: Can you describe the job market from your perspective working with clients to meet hiring demands this year?
Verhoff: The job market, within our client organizations, has been strong to date in 2016. I’m defining strong as the rate in which they are adding new jobs, as well as backfilling vacated positions. All of our clients have added new jobs in 2016. However, we have seen a slight stall (in growth positions) in Q3, which is not uncommon with this being an election year. Advanced RPO works with clients across many different industries and this theme remains consistent regardless of industry. Client confidence continues to remain strong, however, many are hesitant to make major investments in people until our new President is elected.
While many new jobs have been added in 2016, we continue to see the requirements for the new roles becoming more specialized. Within the IT & engineering industries, for example, many of the new roles require unique skills and experience, therefore the number of individuals with these skills is very limited. This skills gap makes finding the talent to fill the new positions very challenging.
We are also experiencing a different challenge in the clinical research industry. In this case, there is a very high demand for CRA’s (Clinical Research Associates) with specific therapeutic experience (oncology, for example). This demand has driven a very competitive marketplace for talent, so our clients are competing with large sign-on bonuses, inflated salaries, and perks in excess of anything we’ve seen historically. This scenario creates yet another challenging recruitment environment.
Are hiring demands and challenges different across industries or geographical regions? Can you elaborate?
Verhoff: Yes, both the demand and the challenges are different across industries and geographical regions. [For example], one of the biggest challenges recruiting for a government organization is best managing the candidate experience. The process for this specific client has a lot of screening steps (10+), therefore it requires that we have the appropriate resources and technology solutions to provide continuous, on-going feedback to candidates to minimize our drop-out rates, while quickly and effectively screening candidates to ensure the most highly qualified are submitted to hiring managers.
The challenges recruiting for a non-profit healthcare provider are much different. In this case, like with recruiting for IT jobs, the skills and experience are very specific, yet non-profit don’t have the budget to relocate talent and often salary ranges are in the lower percentiles. Therefore we are limited to recruiting within a fairly small geography and selling the positions to passive candidates requires we appeal to making a difference for those in need.
Geographically, we continue to see very tight recruitment challenges in markets across the US. For example, we have several clients (across different industries) recruiting within the San Francisco market. That particular market has a lot of highly skilled talent, however “everyone” is looking for the same skills making it very challenging. In Chicago, the recruiting challenges we’ve experienced are more confined to the Accounting & Finance industry. Then there is Boston, which is a highly educated market, yet the demand for those skills is much higher in that area. Scientists and R&D professionals are available in that market, however, the competition for those skills is fierce.
The geographic challenges are not limited to these three markets, however, each demonstrates a different recruitment challenge. To be fair, I must also state that the challenge doesn’t end once you’ve recruited and on-boarded the employee. The greater challenge is sometimes retaining that talent within the organization.
Do you have any expectations on how the the labor market should behave in the upcoming year?
Verhoff: I expect that we will continue to see moderate job growth in 2017. I also expect we will see this “skills gap” continue to widen. Considering the rapid pace of change with technology, that alone, will continue to drive the need for unique skillsets when recruiting. The upcoming election may also have a significant change on the labor market, should we see a shift in control of the White House. Regardless, the constant theme is a continuously challenging recruitment landscape.
About Advanced RPO
With over 20 years of hands-on experience in recruitment process outsourcing and talent acquisition, Advanced RPO possesses the industry’s most experienced leadership and delivery teams devoted to building progressive RPO solutions that are highly tailored to clients’ unique needs. Advanced RPO is part of the Advanced Group.