How to be proactive in a “Cautiously Optimistic” Job Market
Payrolls were up 162, 000 last month and the unemployment rate fell to 7.4 percent, the lowest it has been since December 2008. The report shows continued improvement in the job market, but at a rate that remains moderate, in keeping with an economy that is reliably expanding but has yet to really accelerate.
Most of the decline in unemployment was due to more people getting jobs but part of it was due to a slight fall off in the labor force, a signal of not-too-strong labor demand. The participation rate ticked down one-tenth, to 63.4 percent, lower than it was a year ago (63.7 percent). Also, May and June payroll gains were revised down by 26, 000.
The reality is, many executives at all types of organizations, from start-ups to the Fortune 50, are continuing through 2013 with the same cautious optimism with which they muddled through 2012. While improvement has shown enough consistency to be positive, it lacks the pace to be promising. Unfortunately, for organizations with pent-up demand from past quarters, it can make the business case for hiring a daunting task. Approvals take longer, hires, even interviews, are more heavily scrutinized and budget barely covers natural attrition.
First, you have to know who is on the market and understand the competition. By knowing “who to watch” in the market, you can be proactive. Avancos’ Talent Intelligence practice recently provided a global financial institution with a comprehensive market intelligence report, which included a “who to watch” deliverable for the most talented candidates in the market. During 6 months awaiting budget approval and being “cautiously optimistic”, the client had exploratory discussions and attracted the top candidates without formal interviews. Once the budget was approved, they expedited the formal interviews and were able to on-board their top candidate in less than 3 weeks. (Another process example)
Secondly, pipe-lining should be an active part of your recruiting strategy, not passive. With knowledge of who to watch and who is in the market, you can constantly be recruiting and attracting talent. Pipe-lining done correctly allows HR to create a manageable candidate pool for their business clients, so that time invested in interviews meaningful and the ATS is not bogged down with useless data.
Finally, communication and realistic expectations are a must. In the case of the financial service organization, they maintained a structured communication plan with all of the potential candidates, even when they were just holding for next steps and budget approval. It was a far more powerful tool than they realized for maintaining the attention of the candidates. Many of the candidates were approached by competitors while awaiting the formal interview process. However, they felt invested in the opportunity and wanted to see it to fruition. The candidates knew what to expect from a frequency of communication and that allowed the client the luxury of an undefined timeline for hiring.
As job reports continue to success, cautious optimism may be with us for a while. We’ll need to adjust our expectations and best practices to ensure it doesn’t negatively impact the talent we can hire. A proactive approach, knowledge of the market and strong HR/Business partnership will provide invaluable opportunities to take advantage of the optimism and use the caution to make good decisions.