We’re here to tell you: This is not the time to panic. Sure, there is a frenzy in the recruitment world right now. Top talent is leaving to test the open market in unprecedented numbers. They are being lured away from existing jobs with the promise of salaries that are double or even triple what they’re making, and gaudy signing bonuses are more the rule now than the exception.
It would be easy to throw caution to the wind and join in the competition to win talent. After all, this isn’t the first time many industries and organizations have suffered through a shortage of skilled workers. For a company that has struggled to fill all its key roles, the consensus may be that, notwithstanding the huge cost, they cannot afford to be left out of the war for talent.
However, there are a number of ways to meet new expectations of employees and retain your talent without putting your organization at risk of outspending.
Employee expectations have changed.
There’s no doubt the pandemic forced a lot of changes in the workplace - including the expectations employees have of their employers. Those companies who don’t evolve to meet these new expectations will be left behind. This is no longer a debate; we see it in the stats. The ‘Great Resignation’ has been followed by a number of iterations - the ‘Great Rehire’, the ‘Great Realization’, the ‘Great Reevaluation’. All point to a trend of employees and companies alike pausing and evaluating the current state of work.
So how do you navigate this new job market and stay competitive in your hiring practices?
Whatever you do, don’t panic, and don't abandon the best practices built into your hiring processes.
It would be a mistake to hire rashly and overpay without properly vetting candidates, despite the perceived scarcity of talent right now. If you need to match the market rate for a particular kind of skilled worker, you need to make sure they will bring value to your organization. Overpaying for unproven talent is particularly risky in this kind of market. However, if you stick to your hiring process and do all the requisite assessments, you may be able to justify a higher salary and bonus structure. Remember, be agile but don’t be rash in your hiring decisions.
Is there something other than money that could be used to attract top talent?
Prior to the current hiring frenzy, surveys consistently showed that money on its own was not the most important issue for top talent in choosing an employer. It’s worth remembering that whenever salaries go up and new benchmarks are established, they almost never go back down again. That makes it extremely important for all employers to take a thoughtful approach to talent recruitment that is not only effective at luring skilled workers, but also affordable for the long-term. A reasonable salary is an expectation, but highly skilled workers also want to go to organizations with strong leadership cultures and a psychologically safe working environment. They want to work for employers who share their values and invest in future career development. Prior to the pandemic, we were already seeing a trend toward hybrid work schedules, non-traditional benefits and enhanced PTO. There are many ways to incent talent beyond cash remuneration.
Tie higher pay to performance.
Some of the world’s biggest companies are offering higher overall compensation packages but tying increased salary and bonuses to performance. A deferred pay or bonus system can ensure that an employer is getting top value when paying top dollar. You can offer new hires the opportunity to review pay and performance in three to six months, as opposed to annually. Create a culture where new hires are encouraged to prove their value and earn their way to higher pay and bonuses.
Have a plan in place to make new hires successful after they’re on board.
In previous hiring frenzies, many organizations made the mistake of taking new and unproven hires and throwing them directly into the deep end with an expectation they would start producing right away. At the best of times, new hires need onboarding support to fully integrate into their new companies. There needs to be regular check-ins and dialogue to ensure they are getting everything they need to succeed. If you’ve been forced to match market rates and overpay for talent, making a commensurate investment in onboarding and integration will not only get people up to speed quicker, but it will also ensure you don’t lose some of these hires in the first six months.
Keep one eye on your existing talent.
In 2022, 1Password, a Toronto-based password manager firm, announced it was offering a 7.5-percent cost-of-living adjustment to its existing employees as well as a restructured PTO program. The message from the company was clear: it does not want to lose people to the Great Resignation even as it competes in an overheated talent market to hire new people. It’s a cautionary note that all employers should heed. Forgetting about your current workforce to focus all your time and resources on acquiring new talent is a recipe for disaster. And as is the case with recruiting new talent, taking care of the people you already employ does not necessarily involve huge bumps in salary and bonuses. Offering additional non-compensatory incentives resonate in today’s talent marketplace, particularly with individuals who are looking for a longer-term gig.
Evaluate your Hiring Practices
One thing is very clear: organizations need to move quickly through the hiring process, while still maintaining the integrity of their search. Make sure you’ve identified the qualities of the talent you’re looking for, but be open candidates who aren’t a complete match on paper. Have a process in place for quickly moving through interviews and offer negotiations. And lastly, partner with a recruitment firm to help find the most qualified candidates for your positions and streamline the process.
What do long-term hiring trends look like?
Current trends—many accelerated by pandemic forces beyond our control—have changed the rules of recruiting and hiring, requiring organizations to adapt and embrace new practices to compete and triumph in the future war for talent.
Competition for top talent and the best jobs remains fierce.
It’s become clear that the dynamic employment market that exists has done nothing to change some of the basic rules of the talent management game. In fact, top talent and good jobs remain in high demand. Top candidates who are on the open talent market will likely have to sort through multiple job offers, putting pressure on employers to quickly identify preferred candidates and get them offers. Employers who hesitate will find they are too late to land the best candidates.
Organizations will need to leverage data-driven recruiting resources.
Increasingly, organizations that need to hire—and in some cases hire huge numbers of people—are going to need tools to dig much deeper into the available pool of talent and, relying on hundreds of data points customized for an employer’s needs, quickly and accurately identify the right people for the right jobs.
Inbound methods of recruiting typically fail to generate relevant candidates — with 80% to 90% not qualified for the advertised role. If employers are using LinkedIn to source talent, a lot of time is spent combing through profiles and contacting people who may not be interested. Getting to the right candidate can take as long as 45 days, a lack of efficiency that wastes time and money. This is where utilization of a digital talent broker to help organizations make the best hiring decisions faster is imperative.
Looking toward the future of hiring and recruiting.
Organizations focused on the future should consider looking beyond present challenges and prepare now for what’s ahead. If you want to attract, retain and manage a more resilient, well-rounded workforce, start by paying top talent the right price.