THE STOCK MARKET AND THE LABOR MARKET – YOU’RE NOT IN CONTROL . . .
I never worried about money. Oh, I don’t mean to say that I haven’t had a few financial “glitches” in my lifetime (two kids in college at the same time was tough). But, for the most part, I have always felt, in a Seinfeld kind of way, that all things financial would work out in the end.
This was confirmed last week when I got my 401K statement. I was pretty pleased with it. When I set up the account, at the strong urging of a good financial advisor, I reluctantly agreed to subscribe to the philosophy of not micro-managing. He wisely counseled that even though the funds in the account could be easily changed online with a simple click of the mouse, I should not fall prey to the temporary whims of the stock market. In other words, ignore the market and take a longer term view. I have done that and can see that it’s paying off.
It’s the same with the labor market. For example, the Massachusetts unemployment rate is 4.6%. In Texas, it’s 4.3%. Those are practically “full employment” states. And, similar to the “whims” of the stock market, the reality of the labor market is one that can’t be changed. There is precious little managers can do to make a difference in the pool of available recruits. Short of moving to a place with a greater population of skilled workers, managers have to live within the reality of their market.
THE NEW METRICS OF THE CANDIDATE POOL
A few years ago, hiring managers may have seen 4 to 6 candidates for an open position. In this market, that number has dramatically shrunk. That means if you’re not seeing lots of candidates, the process that must be in place to recruit those you do see has to be good. Here’s a formula to follow:
FEWER CANDIDATES TO CONSIDER =
GREATER CONTROL OVER THOSE CONSIDERED =
With this formula in mind, if you have a strategy and act fast, you will be on your way toward hiring success in this tight labor market.
Here’s four strategies that you can easily implement . . .
- TIGHTEN THE TIME TO HIRE: More than ever before, time can be your enemy. Candidates are being wooed by many companies and have many choices. They are entertaining multiple offers (some with sign-on bonuses). Make sure you have a short schedule for the recruiting process. In this market, that should be between two to three weeks maximum after you have identified candidates.
- UNDERSTAND YOUR CANDIDATE’S MOTIVATION: Make sure you understand fully why your candidate would consider a move to your company. Get to the bottom of his motivation. (Hint: it’s usually never about the money.) One question that would give you some insight is, “What is it about your current position that you would change if you could?” Then, sit back and LISTEN to their answer. (If you are using a recruiter, this question should be fully vetted by them and there should be no surprises at the end of the process.)
- SELL YOUR OPPORTUNITY: That’s right! Tell your candidate why now IS a good time to come to work for you. Paint a picture of the opportunity that exists and what the future will look like. If there are strategic plans for dramatic growth, international markets to enter, or plans for “end game” acquisition, share these strategies in your interview process. Give her the big picture.
- SWEETEN THE POT: Go the extra mile in putting together a compelling compensation package and additional “sweeteners.” This may mean stock options, accelerated bonus plan, or any compensation guarantees for the first year to ameliorate the risk on the candidate’s part. Or, if it’s not a senior-level position, use extra vacation or personal time; possibly even a small signing bonus.
Using these strategies will go a long way toward sealing the deal and getting the talent you need, no matter what the market – stock or labor – looks like.