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Ep 458: Recruiting & Retention In The Current Market

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After almost three years of constant disruption, the talent market still shows no signs of normalization. Even with rising inflation and layoffs in some parts of the economy, US and UK job openings remain at record highs.

So what are the implications for employers recruiting in times of economic instability and a cost of living crisis? How do TA teams need to think, and what are the most successful employers doing to hire and retain the talent they need?

My guest this week is Jon Wilson, CEO of Totaljobs, which is part of the Stepstone Group, one of the largest online recruitment companies in the world. This means Jon has access to a vast amount of data and insights into the current hiring market and has some valuable advice to share.

In the interview, we discuss:

• The current state of the market

• High job openings and fewer job seekers

• The impact of high inflation

• How demographic factors are driving scarcity

• Why the great resignation will to continue

• Increasing mobility in the workforce

• Flexbility and upskilling

• What are the most successful employers doing?

• Forecasts for the next six to twelve months

Listen to this podcast on Apple Podcasts.

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Matt Alder (Intro) (55s):
Hi, there, this is Matt Alder. Welcome to Episode 458 of The Recruiting Future Podcast. After almost three years of constant disruption, the talent market still shows no signs of normalization. Even with rising inflation and layoffs in some parts of the economy, US and UK job openings remain at record highs. So, what are the implications for employers recruiting in times of economic instability and a cost-of-living crisis? How do TA teams need to think, and what are the most successful employers doing to hire and retain the talent they need?

Matt Alder (Intro) (1m 42s):
My guest this week is Jon Wilson, CEO of Totaljobs, which is part of the Stepstone Group, one of the largest online recruitment companies in the world. This means Jon has access to a vast amount of data and insights into the current hiring market and has some valuable advice to share.

Matt Alder (2m 1s):
Hi, John, and welcome back to the podcast.

Jon Wilson (2m 3s):
Good morning, Matt, how you doing?

Matt Alder (2m 5s):
I’m very well, thank you. A pleasure to have you back on the show. For everyone listening, could you just introduce yourself and tell us what you do?

Jon Wilson (2m 14s):
My name is John Wilson. I’m the CEO of Totaljobs in the UK. We help companies hire people, and we help people find great jobs. We’re part of the StepStone Group, which is one of the biggest online recruitment companies in the world.

Matt Alder (2m 28s):
You’re the perfect person to have this conversation with. Because obviously, being a major US, you’re born in the UK, part of that sort of big European company. You’ve got access to lots of data in terms of what’s going on at the moment. And that’s kind of what I really want to talk about. Talk us through what you’ve seen happening in the market over the last sort of six months or so. Because it’s very complex, isn’t that?

Jon Wilson (2m 53s):
It really is. And, you know, I think most of us that are listening to this podcast will look back on the last two years and just kind of understand there’s never been a steady state. And we’re obviously seeing a lot more change, as you rightly say, in the last six months. So, like in the UK, the number of open positions is incredibly high. It’s declined very slightly recently, but we’re still seeing 50% more job openings available in the UK economy today than there were in 2019, so pre pandemic. So crazy amount of competition for talent out there.

Jon Wilson (3m 34s):
We’re also seeing that there are fewer people looking for those jobs. So, it’s a multiplication of those two things. Many more people looking to hire talent, and fewer people looking for those jobs, that creates a lot of competition. And that impacts businesses in many, many different ways in which I’m sure we can talk about. And then most recently, in the last six months, I can remember not too long ago talking about inflation rates of 5%, and how challenging that was. Yet here we are just a few months later, that’s double. With some predictions, taking us to territory that we probably haven’t seen since the 80s.

Jon Wilson (4m 15s):
So that then in itself just adds a real human layer of challenge, difficulty, and complexity to companies that are trying to hire the people that they need to run their businesses. But clearly for people that are trying to have the right money, the right conditions in order to be able to just meet the needs of life today, particularly when there’s so much uncertainty. Obviously, we saw the energy cap increase this morning. So that’s almost double what it was before. So, energy bills going up from October. Just all adds a lot more challenge for businesses and people as they think about their working life.

Matt Alder (5m 1s):
It’s incredibly volatile, complex situation as you say, here in the UK, we’ve just had noticed that, and energy prices are likely to go up by 80% in the next couple of months. So hugely kind of impacts the way that people think about work, the way that people think about employment. Also, as you say, we hear a lot in the news about layoffs and redundancies, but still, so many companies trying to hire people and struggling with that. Tell us a little bit more about how you think that everything that’s going on is impacting the talent market?

Jon Wilson (5m 33s):
Well, we could, this could probably be an answer that goes on for quite some time, Matt. But obviously, the number of openings in the market tells you that companies are trying to bounce back from all of the challenges that existed with COVID. What we’re seeing really is a number of different demographic groups that are that are not here in the employment market. So older workers have retired. Through Brexit, we’ve got a lot fewer people from the rest of Europe in the world, and then other younger people deciding to stay in education. So, that creates a lot of scarcity for that talent.

Jon Wilson (6m 13s):
And so, it does a number of things really, companies need to understand, what is it internally that I need to do to keep the people that I have, because clearly recruiting is going to be challenging? So, can we double down and invest in the teams that we have right now? And then also, how do we maximize what we’re doing to appeal to the right talent? And when you layer on what we’re seeing right now to both in terms of competition, but also in terms of the real world, price increases that people are experiencing? It inevitably crystallizes around, like, how much are we paying people?

Jon Wilson (6m 57s):
What flexibility can we offer? What benefits can we offer that are attractive for workers? And give you a little bit of an example is the hiring trends index, which is one of the quarterly surveys that we do. We talk to about 1000 HR directors and people leaders across the UK to get an understanding of what are they experiencing? And we also talked to around 2500 employees in the country to understand what’s driving their thought processes and decision making. And so one of the stunning facts, I think, is that we see, it’s about 148% of people are saying that they haven’t had a pay rise at all in the last year.

Jon Wilson (7m 44s):
So that’s creating a lot of challenge. And then that drives the consideration that people have to maybe move jobs. And we see 37% of people consider changing a job. And then when you drill down a little bit further and you kind of go, okay, so what areas are impacted most by that is when you get into key worker territory. So people working in the health care and the care industry, people working in education actually rises to just under 50% of people considering changing jobs right now in this present moment, predominantly due to the rising cost of living.

Matt Alder (8m 22s):
I mean, that’s obviously unsurprising but very unprecedented, isn’t it? It’s like normally if there’s a recession, or there’s hard economic times. People are more likely to stay put on like.

Jon Wilson (8m 32s):
Yes, clearly, the story that we’ve been telling for the time pre this cost-of-living crisis is about the competition out there in the market. And I think we all know that when we were in lockdown suits those face to face, businesses, hospitality and retail, experienced, probably some of the hardest times and then those essential businesses deliveries and care, etc. They experienced a lot more growth. And I think through that time, we did some research on transferable skills to really help people think about the industries that they could be successful in.

Jon Wilson (9m 17s):
And I think most workers understand that there’s a competition in the marketplace. So people know that there are opportunities for them to go and find work elsewhere. And it’s really interesting, I think, before the pandemic, you would ordinarily see the majority of people when they consider moving, they consider moving within their own kind of industry or sphere of influence. But we see that changing quite a lot. The most recent survey showed that 48% of people. If it meant more money would consider moving industry as well. So people’s idea of what they’re capable of, what’s out there. I think I think that’s changed a lot over the last couple of years.

Jon Wilson (9m 58s):
So people are more inclined, not only to have a look at what options are out they’re within their own industry, but also to across industries as well, and kind of work out where they’re where those transferable skills lie. So the workforce has definitely become much more mobile. I think in the last two to three years.

Matt Alder (10m 20s):
TEC employers responding to that, enabling that, offering more training, offering reskilling being more flexible with their qualification or skills requirements for the job.

Jon Wilson (10m 28s):
So yes, is what I would say. I mean, the majority of training, incidentally, that we see is actually training people to do the job that they’re doing today, only better. So, a lot of companies when they’re thinking about training, they’re not thinking about bridging those skills. But actually, what companies are trying to understand is for the role that I need, like what are the core competencies that would make someone successful in this role? And whereabouts in other functions, roles or industries do those same competency competencies exist. And so, you’ll find companies now that are much, much more willing to not be stipulating must have five years or four years’ experience doing X role, and actually must be able to demonstrate particular core competency.

Jon Wilson (11m 17s):
So, we definitely do see that. And then we actually see the numbers really quite high over 90% of companies that are actively changing things within their business to lessen the impact of the cost-of-living crisis, too. So, I think most businesses are aware that they need to be flexible when they’re looking for talent. But also, they need to be meeting the challenge of the day, which, obviously is how people can meet their commitments in their daily lives.

Matt Alder (11m 48s):
And what kind of initiatives are you seeing companies adopting there? Because obviously, pay increases would be the first thing that comes to mind. But what else are organizations doing?

Jon Wilson (11m 58s):
It would probably come as no surprise to you that the idea of working flexibly working hybrid is massively important for people. And when you think about what does that help people with when it comes to the cost-of-living crisis? And a lot of that is about, well, if I’m working flexibly, I can minimize childcare costs, or I can travel at peak times. If I’m hybrid as well as it means I’m not having to travel five days a week, and I can travel fewer times during the week. And then actually, there’s some expectation as we go through the winter, that actually, what you might find really is that people start to come back to the office more as heating bills, and what have you increased so that they can go there?

Jon Wilson (12m 44s):
And then even things like making sure you’re offering even like food and drinks and stuff like that, why you have an office location, as is high on candidates list of things that would make them attracted to a particular company. So, they’re talking about that a lot. I think then, within companies, there’s an awful lot of things that that we can do for existing employees. And we see that coming out in the surveys. And these are things like matching inflation for pay rises, but also benchmarking to make sure that not only are you increasing salaries, but that the salaries are at the right level for the market, as well as the bonuses etc.

Jon Wilson (13m 26s):
There’s quite a lot of that going on. And then things like it seems so simple, but employee assistance programs that can help people both with financial questions, as well as mental health questions and get employee support around that is actually really, really quite important. And then feeding on from that it’s those kind of well-being activities that happen within the company. So, part of it is financial, part of it is flexibility, and then part of it is supporting people. Regardless of whether those issues exist inside the workplace or outside of the workplace.

Matt Alder (13m 57s):
Focusing on the recruitment aspect of this, we said at the beginning of the conversation, that there are lots of employers still competing in very, very difficult markets for talent. You obviously mentioned lots of things there in terms of compensation, and benefits, and the employee experience that employers can be doing to make themselves an attractive place to work. What should they be doing in the way that they market themselves? What are the employers who are kind of sort of cutting through the noise and really sort of getting to the talent that they need? What are they doing?

Jon Wilson (14m 31s):
So, I think that clearly when you’ve got those foundational elements around, you know, how do you attract the right people? And what is the package that you’re offering? What is your core value proposition, etc. Once you’ve got all of those in play, it’s really about making sure that you’re able to tell people what’s happening there. And so, I think, if I take it right back to the nuts and bolts as we think about advertising, and it’s making sure like actually we see a 20% uplift in the amount of click troughs on advertising, when you’re actually able to mention and like five non-salaried benefits with within that job advert. So really making sure that you’re talking about that.

Jon Wilson (15m 13s):
But also, if you think, how do I make sure that I’m competing out there in the market, it’s really about understanding. And we talked a little bit about benchmarking before, when you’re thinking about paying your staff the right wage for the market. That’s really critical when you’re advertising as well. Because when you want to generate the maximum number of candidates, you really need to understand well, what is everyone else around me doing to make sure that you’re in line so that you can be competing with the people around you? But then also the programmatically. So within the total jobs group, we also have a product outcast, which allows companies to essentially target their advertising, where it makes most sense.

Jon Wilson (15m 58s):
And so that way, then you’re getting the maximum amount of exposure, but you’re also able to make sure that when it’s valuable to you that you can increase that exposure, and when it’s not valuable to you, you can decrease that exposure, so that you’ve got that flexibility in there to meet the needs of your own business. But I think that making sure that you’re covering all of the angles when you’re thinking about exposure is a critical success factor to getting those internal applications. The second part, then, that I think is becoming much more prevalent for companies is like, how do I engage with people that are already in a job?

Jon Wilson (16m 39s):
How do I think about those passive candidates? And so, we see a lot more uptake within our business in a number of different things. One, it’s that CV database search, and how do we identify ideal candidates. And so, as a company ourselves, we build tools that help you communicate with people that are already in other roles and direct them to yours if they want to apply. And then also using AI conversational tools to be able to really understand what it is that people want, and then be able to redirect into your roles, if that’s possible for you. So, I think a lot of companies will traditionally advertise and then screen the candidates as they come in. And there’s a number of different things that you can do there.

Jon Wilson (17m 23s):
But I think it’s also important in this market, that we’re identifying those candidates that are passive for want of a better phrase, and actually helping them to attract them to your job advert as well.

Matt Alder (17m 34s):
Final question, get a difficult question, given that we’ve been talking about just how sort of changeable and disruptive everything is. Do you have any kind of insights in terms of what might happen in the next six to 12 months in the market? Are there any kind of predictions or forecasts out there that we should be aware of?

Jon Wilson (17m 53s):
My goodness, Matt, if I could tell you that I would probably be retired already. I think. If we extrapolate forward, what’s happening, the tightness that we see in the market has been driven from the shutdowns through lockdown. Companies are trying to grow. And I think we’ve seen it a little bit, there’s volatility in certain industries. We know, within the tech industry, we’ve seen some layoffs and stuff advertised over the last couple of months. But that’s off the back of stellar growth in terms of the number of employees that they’ve had. And when you look at what’s what we see with the ONS data on the total number of job openings in the UK, like I say, it’s slightly less over this last month, but it’s still 50% higher than 2019.

Jon Wilson (18m 42s):
So, one thing I think is we can all be really confident in is the competition to hire people will continue over the next six months. When you look at the forecasts for inflation, so they range anywhere between 13 and 18%, over the next six to nine months. So, that really is going to impact actually what companies are able to afford to do. When we’ve done the surveys, through the hiring trends index, a lot of the companies that haven’t given a pay rise, it’s because they’ve been unable to give a pay rise 30% of companies say they haven’t been able to pay people because they don’t have the profitability in the organization to do that. That’s going to continue to put pressure there and force companies to think about, well, how do I balance both of these things?

Jon Wilson (19m 30s):
How to reorganize workloads, and what elements of my strategy take priority over others? So, we’ll continue to see competition, we’ll continue to need to see upward pressure on salary and benefits. And so, I can imagine the next six to eight months is going to be pretty challenging for companies as well as for individuals looking for their next job.

Matt Alder (19m 51s):
John, thank you very much for talking to me.

Jon Wilson (19m 56s):
Thanks again, Matt. Appreciate it.

Matt Alder (19m 59s):
My thanks to John. You can subscribe to this podcast in Apple podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to the mailing list to get the inside track about everything that’s coming up on the show.

Matt Alder (20m 50s):
Thanks very much for listening. I’ll be back next time, and I hope you’ll join me.

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