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In uncertain times, British managers are looking for a sure thing. Two years ago, to recruit a new employee, bosses would interview three candidates before making a hire, according to recruitment firm Hays. Now it’s around seven. Others say it can be as many as 10.
“There is no confidence in the market,” said Dirk Hahn, chief executive of Hays. “Clients are more selective and if they want to hire, they want to find exactly the right person. The process is taking much longer.”
In short, there has been a shift in the balance of power in the labour market towards employers, and not just in the UK.
This is in contrast to the hiring frenzy that occurred as the world emerged from the pandemic, when employers scrambled to meet every demand from potential recruits. A London salary while working in Eastern Europe? Fine. Working reduced hours? If necessary. Extra holiday time? Sure. Office perks proliferated, staff wellbeing was prioritised, while working from home became the norm.
But cost pressures took hold over the past year as the post-Covid recovery slowed. Major corporations laid off thousands of white collar workers While the looming global elections have restricted public sector hiring, some companies have cut back on graduate hiring, something managers typically say they like to maintain even in tough times. There have also been significant changes cuts to internship programs at companies such as Goldman Sachs and JPMorgan.
The labour market turnover is not the same as last year. In the UK, the share prices Major recruiters have suffered a setback, but companies are not. Advertising many new jobs and unemployment —although low compared to historical levels— is increasing. The unemployment rate is also Highest in the USwhere workers have He stopped quitting smoking as they have been doing. While layoff rates have slowed, hiring rates have also slowed.
When companies are looking for new employees, they take a tough stance and put candidates through more hoops, including lengthy interview processes and labor-intensive assessments, from psychometric tests to preparing elaborate presentations.
In today’s market, employers “hold the upper hand,” says Lucas Shaw, who advises companies on how to improve their hiring practices. He recently heard about a 43-step process for hiring a technology director at a large company. Hiring the wrong person is costly and time-consuming, so “everyone wants to reduce the risk,” he adds.
Shaw himself recently had five interviews for a job at a management consultancy that involved writing a strategic report. The company ended up hiring another candidate for a lower salary and accepting his ideas for free. According to him, the fact that candidates are nervous and some are so unhappy that they walk away from these processes halfway through.
LinkedIn is rife with stories about the “tasks” (or, frankly, unpaid work) that candidates are expected to do for companies. “It’s sold as a way to measure skills, but let’s call it what it is: exploitation,” said Ives Tay, a Singapore-based consultant specializing in adult education.
The extra work and time required to complete these assessments is less appealing when the huge pay increases of just a few years ago, at the height of the “great resignation” period of 2022, are greatly reduced. A 20% raise is worth getting out of bed for, but is a 5% raise worth it when you know that in today’s market, if you’re the last one in, you’ll likely be the first one out if a company’s fortunes change? Changing jobs sounds good in theory, but for most people, re-evaluating life goals and designing the ideal career path pales in comparison to being able to pay the bills.
Another thing to keep in mind is that the way companies access skills is changing, with many turning to additional workers hired “on demand” and on short-term contracts, said Sunny Ackerman of executive search firm Heidrick & Struggles. These include independent consultants, executives, project managers and subject matter experts. This way, companies can assess whether the role or job is something they need long-term while also checking whether candidates are a good fit.
Hiring may be returning to business as usual after the COVID-related hiring surge and inevitable pullback, but one thing is clear: after a period where workers called the shots, the power dynamics are now back in favor of their masters.