![]() ![]() These hiring managers became less accommodating, often asked potential recruits to go through additional rounds of interviews, and generally paid less interest to how job applicants perceived their process. After the Great Recession of the previous decade, we worked with hiring managers who expected candidates to bend over backwards for a role. ![]() Given that wages and salaries account for more than half of company costs, being frugal on compensation packages when companies are resource-strapped and have the negotiating upper hand can certainly make sense. If it is an employer’s market, they slash benefits and wages, try to drive a hard bargain, or turn their attention elsewhere if candidates balk at their strong-arm tactics.īasic economic theory suggests this approach is a logical use of hiring budgets and management attention. During a hot labor market, characterized as a candidate’s market, they raise wages, hire fancy baristas for their offices and shower candidates with gifts ranging from Moleskine notebooks to Swell water bottles. Many executives assume that their firm’s power in the labor market correlates with the unemployment rate and general state of the economy. Here is a better way for employers to think about the current job market. ![]() Assuming that we are in an employer’s market could lead companies to miss out on talent they desperately need to boost their revenues – and help revive the economy. But a closer look at the data, as well as our frontline experience of recruiting executives, indicate that the situation is more complex. It’s therefore unsurprising-given the Covid-19 downturn-to hear that a number of thought leaders are concluding that we are back to an employer’s market. In the past, the intensity of competition for talent followed the ups and downs of the economic cycle. To get all of HBR’s content delivered to your inbox, sign up for the Daily Alert newsletter. ASSUME THAT FOR THE LAST WORKER HIRED FREEIn these difficult times, we’ve made a number of our coronavirus articles free for all readers. Employers should go out of their way to try to attract talent. However, a more important conclusion for employers might be that, given an economic crash, job openings have remained at unprecedented high levels. The common narrative focuses on the fact that unemployment rates are currently at unprecedented high levels. Third, many Americans are moving out of areas with the highest employment needs. Second, many jobs are going unfilled as workers try to avoid jobs that might put them at risk of contracting Covid-19. But while we are in a recession, this one is different and the typical playbook doesn’t apply. If it is an employer’s market, they slash benefits and wages, try to drive a hard bargain, or turn their attention elsewhere if candidates balk at their strong-arm tactics. ![]()
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