We continue our coverage of the current employment situation and talent market with this edited interview with Joe Marino of Hueman RPO. From labor market analysis to trends in diversity and inclusion and recruitment marketing to talent acquisition strategy, Joe offers unique insights based on making thousands of hires for clients nationwide and across all industries.
Since February of this year, we saw the inflection point of supply and demand start to really change across all types of candidates: hard-to-fill positions, higher-salaried roles, as well as hourly roles. There has been a sharp decline in talent supply and the demand has gone up significantly. We’ve seen the gap between supply and demand increase, especially for hourly workers.
According to the US Bureau of Labor Statistics (BLS), the total workforce in the US is around 166 million. The figure dropped during COVID but came back. Right now, there are about 7 million people filing for unemployment. This number doesn't represent 10% of the workforce; it represents a very small percentage of the workforce of probably below 3%. Furthermore, many of those folks are working while receiving governmental assistance. The point is, the supply of talent hasn’t decreased as much but the demand has spiked creating additional pressure on employers.
The other thing that will take us a little while to correct is making up for the baby boomers that will be leaving the workforce and won't come back. It's going to take us three to four, or even five, years to replenish that group that is still working. Some of them may not come back and that represents about one and a half million people within the workforce. So it's a material number of the overall decrease before COVID. But it's not the true cause of it.
When I think about where things are heading, with schools being open around the country and not as many schools closing now as even there were just a couple of weeks ago with the covid variant, that you'll have people going back to work. The Northeast will be the last group to go back to school after Labor Day, and we’ll then see whether or not we have an increase in the workforce. I think the challenge will be that the economy's still going strong. So we're gonna have high demands for services and products with all that pent-up energy, pent-up dollars that were saved. My view on the economy once we get to the holidays around November and December, is that people are wanting to buy things, they may want to go on vacation in the winter, then you'll have a January, February resurgence of the workforce.
Today, the two biggest factors impacting employers are higher turnover and an increase in wages. Also, something not a lot of folks are talking about right now is the shortage of recruiters.
The demand for recruiters has gone up 143% since January. Their salaries are going up 50 to 100%, in some cases. So, everybody's scrambling for the talent to find talent. There is also an urgency to hire fast because wages are going up. The reality is, the demand for RPO services is probably at the highest level it's ever been at, based on the dynamics that we have today
“The reality is, the demand for RPO services is probably at the highest level it's ever been at based on the dynamics that we have today.”
For the last nine-to-twelve months, there has been a lot of conversation around diversity and inclusion strategies.
Currently, the conversation has subsided. It’s not because people care less about D&I in the workplace but because of the shortage in supply as mentioned. Employers are more focused on finding qualified talent right now. If the talent happens to be diverse, great! If they’re not diverse, they still have to hire someone.
From a recruitment marketing perspective, investing in employer branding has become more expensive. However, it’s crucial to continue to spend on recruitment marketing.
A recent Staffing Industry Analysts (SIA) survey showed that most organizations in the next 12 months are going to continue to focus on creating a better candidate experience. If your hiring managers are not on board with that, then you need to get them to adapt otherwise try to replace those individuals. Because we know wages are going up, therefore, employers need to create a differentiator for their organization. You need to create a great candidate experience, which really means a quick interview, a quick offer, and a quick way to get them to accept the offer before the noise of all the other options they have.
Recruitment marketing is more important than it ever has been for candidates that are actively looking. The challenge today is that even for easier to fill roles where typically, you attract people through digital recruitment marketing because there's a lot of active candidates, those roles are being shifted slightly. And even a 10 or 20% shift means now you have to have recruitment activity to source hourly workers that are passive. And it's much harder to do that in a cost-effective model like you're normally running with hourly workers.
The caveat I see for talent acquisition departments that are continuing to do it themselves is that if they try to explore new technologies, the implementation timeframe for those new technologies is very long.
Now, as for us as an RPO provider, we have relationships with technology providers, some of the technology is ours, most of it is industry best-in-class technology that we help deploy based on the situation and the circumstance of our customers. And because of our relationships with the tech vendors, we can deploy some of those technologies very quickly.
Talent acquisition leaders themselves will have a challenge to really get the ear of some of those technology firms that are being creative because they're overwhelmed themselves. And ironically, they're overwhelmed, because they can't find their own staff and engineers and coders and developers to keep up with some of those things.
Looking at where we are today, if you're able to future-proof your talent acquisition function, then you're at the top 10% of all recruitment functions within the country, probably even worldwide.
We’ve seen during covid that organizations working with RPOs were able to adapt to hiring fluctuations much better than those that don’t. For example, the partners that we worked with before COVID, or started working with during COVID, are now dealing with this totally different environment since March of this year. These organizations have had the ability to scale up quickly by leveraging a partner that focuses exclusively on talent acquisition. That's what we do. That's what our core competency is. So as an RPO provider, when our partners need to go up three or four or five recruiter seats, we're able to do that quickly. And why are they asking that? Because their demand is going up and also they're losing their own recruiters and they can't replace them and train them fast enough to meet their demand.
Long term, it's more about what’s the next covid? What's the next expansion? When does a CEO come to an HR leader saying “we're going to be expanding in four different cities”, or “we're opening up a new location and we need to hire 500 people in three months.” An RPO provider allows you to scale up very quickly and efficiently.
As an RPO provider, we know our clients’ systems, we know their culture, we know their story to help drive the right candidates. We deploy our proven model and follow our playbook to be able to find good candidates very quickly. That's more the longer-term approach for RRO. But in today's environment, it's a little bit frenetic, unfortunately.
“Outsourcing anything is a big decision. Outsourcing your people, no matter what organization, is a critical component of your overall success. But when you can find the right RPO partner that fits with your organization and you've got great communication with a great ability to scale and deliver, then your future-proofing of TA is really at its highest level.”
What I love about being in this space, and being part of our recruitment process outsourcing industry, is that we're very much peers. And we're friendly competitors in many different situations. We want to grow our business. We want to help different organizations. But we also are HR leaders, and we care about the people that are out there and the people that are working across the country. You don't get that if you're in the staffing industry; it’s a little more intense, a little more cutthroat. RPO organizations within the RPO Association, and in general, are always talking about making the industry better.
About Joe Marino. Joe is the Executive Vice President at Hueman RPO, an award-winning RPO company, and RPOA member. Joe has over 25 years of experience in talent acquisition building world-class cultures. He’s also a frequent guest speaker on the RPO Leadership Forum, a monthly webinar program hosted by the Recruitment Process Outsourcing Association.