Despite thousands of layoffs in tech and other sectors this year, the economy added over 800,000 jobs to the labor market; the January and February job reports showed. It can be challenging to understand the full picture of the talent market relying on news headlines. What can front-line talent leaders tell us about the reality of the global talent market?
I moderated the most recent RPOA Expert Panel discussion, where global talent leaders Rob Navarette of WTW, Trent Cotton of Hatchworks, Kelly Burlage of Lineage Logistics, and workforce analyst Zach Chertok of IDC provided valuable insights into how talent market volatility and hiring uncertainty affect strategy, what employers can do to navigate today's talent landscape, and why employers love recruitment process outsourcing (RPO).
Because this discussion was so informative, we are sharing highlights of the conversation in a blog post series. In this first blog post, we cover current general talent market conditions and certain industries. If you hire talent globally, this post will be helpful to you.
Zach Chertok: Release of Bottlenecked High-Skilled Tech Talent
Zertok is a workforce analyst with IDC, a global research firm focusing on technology and consultative services market trends. It provides comprehensive insights into digital transformation, labor market trends, and employee experience to show how these elements impact organizational design.
Zertok shared that the massive layoffs increased the availability of bottlenecked, high-skilled tech talent. His multi-sector analysis showed that the talent market and industry dynamics are shifting in tandem with the changes in the market and industry, trying to keep pace with each other. He noted that automation driving industrial change allowed certain sectors to dominate the talent market, which created a bottleneck of skilled talent for the last 30 years. As a result, other industries had to delay digital transformation and fight to retain older talent because they couldn't hire new talent. But now, with the layoffs, he said that highly skilled talent has been let out of the bottle and made available to more and more industries than before the layoffs.
He also pointed out that the pandemic created a strange bump where some industries benefited over others. But he noticed that coming out of the pandemic, a forked economy appeared. Upper-tier industries could spend money on hiring while lower-tier industries could not (partially because of interest rate hikes by the Fed to control recent inflation). However, he added that rising interest rates forced some industries to become more business-efficient and to lay off talent. Therefore, making the laid-off talent available to other industries.
Regarding the economy and talent market, Zertok said that rising interest rates will slow economic transformation, but with an unemployment rate of 4.6%, this is not a major cause for concern.
Make informed hiring decisions by knowing the reality of the global talent market.
Rob Navarette: Building Talent Pipelines, Rehiring People, and Bringing Back "Boomerangs"
With a global workforce of 46,000 employees stretching across 140 countries, WTW is a worldwide company that focuses on people risk management, human capital management, insurance, and the brokering space. Navarrete, Global Talent Acquisition and Transformation Leader at WTW, said the firm made just under 10,000 hires last year.
He shared that WTW was going through a proposed acquisition with another company during the pandemic. WTW's hiring demand was impacted, but Naverette said it's hard to determine whether the impact was from the proposed merger or the pandemic.
Unfortunately, the merger collapsed, and hiring demand did decrease, but he said that WTW could create pipelines, rehire people by targeting other companies, and bring back "boomerangs."
Navarette added that despite layoffs in North America, WTW is hiring technical staff in offshore locations like India, Manila, and Mexico City, where competition remains strong.
He also pointed out that things are showing promising signs. "We're not seeing as many people ghosting us anymore, although it still exists," Navarette said. "And we are not seeing as many people accepting offers and then ultimately not joining. So there's been a bit of a shift."
Trent Cotton: Adjusting Hiring Outputs To Gain Balance
Cotton is vice president of talent and culture at Hatchworks. Hatchworks is a global technology solutions provider that offers services such as modernization projects and agile team building, helping clients build digital products to increase revenue and client engagement. Hatchworks is a high-growth company with 200 employees; it's looking to double its revenue this year by taking on various projects. It plans to hire up to 200 people this year; its scope of hire can change.
Hatchworks' change in its scope of hiring is based on the service demand. Cotton explained that this dynamic is all about gaining balance. While one project increases revenue, another project might call to cut costs. "As one is going down, the other one's going up; as long as we keep that at some type of equilibrium, we'll be okay," he said.
As Hatchworks looks to achieve balance in an uncertain economy, Cotton said that he has not yet seen any significant increase in the supply of tech talent due to the massive layoffs.
Listen to Cotton's assessment of why the layoffs in the tech sector are not increasing the pool of tech talent.
Cotton also shared that the current situation has affected talent less than expected because of these two other factors:
The economy is exhibiting mixed signals, with increased job reports, but the Federal Reserve is still determining how to manage rates, inflation, and economic slowdown.
Consumer spending has mostly stayed the same, suggesting that the impact of the current situation on the talent world is less than expected.
Kelly Burlage: Retain Existing Talent
Burlage is vice president of global talent acquisition at Lineage Logistics. Lineage Logistics has 441 facilities in 20 countries that focus on eliminating waste and safe food delivery through refrigerated or frozen means; it's expected to hire 18,000 new employees this year.
Burlage shared that her company has been fortunate not to be too impacted by the changes in the market and food consumption. People still need to eat, providing us with a unique opportunity to continue offering our services.
For Lineage to continue offering its services during uncertainty, retaining employees is important. Burlage said that retention is the critical focus of Lineage and should be given more attention than recruiting activities. She also pointed out that hiring warehouse workers has been competitive this year, but some positions in key markets (in Spain, the UK, and the Netherlands) still need to be filled.
As the demand for hiring continues to change due to an erratic talent market, organizations must focus on incoming high-skilled technology talent. This can ensure that organizations can manage the output of their hiring needs as they gain a better balance. Building talent pipelines, rehiring people, and embracing “boomerang” hires are great ways to bring in new talent and retain the existing ones. If you want to learn more about these strategies, visit the RPO Academy to watch our complete discussion!