Looking out over my garden on a predictably wet and downcast bank holiday Monday, it’s hard not to recognise the changing of the landscape. The grass is woefully overgrown, I urgently need to locate my secateurs from wherever they’re hiding and it’s hard not to marvel at just how many weeds one very modest garden can house. And as spring evolves soggily into summer, there’s a number of fairly clear analogies for both the economy and the employment market to be drawn.
Last week saw some fascinating news around the UK economy. It’s very apparent that the last year has seen a return to buoyancy not witnessed since pre-recession. And this is telling. Although GDP rose 1.9% in 2013 and is set to hit 3.4% this year, it is only this quarter that the economy has finally edged over its previous peak of 2008, before the lights, rather dramatically, went out. It has taken us six long years to reach that point. For me, though, this is about looking forward and not backwards. It can be all too easy to have half an eye on where we were rather where we are heading.
Take interest rates, for example. The Bank of England has a major challenge on its hands in terms of timing when and at what pace to ease up interest rates from their record low of 0.5% – the point at which they have loitered for the past five years. Looking at economic growth and, in particular, a housing market that looks dangerously over-heated in some areas, the argument appears clear to raise rates now and decisively. The counter view, however, is about damaging our nascent economic growth and stopping the fledgling recovery in its tracks. For me, there is also a sense that we have become used to economic caution and wariness.
This is all too clear to see in the employment market. For those employers who have been in recruitment mode over the last few years, is there a sense that hiring has been easy (maybe too easy) across a number of labour pools? That perhaps they haven’t had to try that hard? That recruitment has been directed at low hanging candidate fruit? A fascinating piece of external research conducted very recently by TMP across a variety of labour pools paints an illuminating picture.
Because of the economic gloom of the last half decade, many employees have stayed longer at their current employers than would have been the case in happier economic times. No surprise, but what are some of the implications? People feel more entrenched and embedded financially – their salaries have not risen meteorically but they have progressed. And what do they see from recruiting organisations? Employers who appear to be lowering the salary bar and offering money designed apparently to attract potentially those without work or without choice. It doesn’t end there.
These same employees, because their tenure is longer than might have been the case, have more skin in the game from a benefits perspective. Pensions, sharesave schemes and staff mortgages all make leaving a current employer harder to do in the absence of a perfect offer, in the absence of a recruiter who is cognisant of how interwoven many potential hires are with their current employer.
The same scenario is apparent too with people’s personal lives. Staying that bit longer in their current roles is likely to have created a far greater degree of flexibility. Many people will have built up the licence or space whereby their employer allows them the latitude for the school run, the odd early departure or volunteering needs. They fear that by changing jobs, that will disappear.
So, if the market has not become entirely employee driven, smart employers will recognise that the landscape has shifted. They are no longer hiring in a soft market. The CBI suggests unemployment will hit 6.2% by the start of 2015, and the latest PMI index hit 59.3 for April (London’s was an eye watering 62), a significant rise on March’s already strong figures.
But, more to the point, those same employers need to walk in the shoes of their target hiring pools. These people do not sense that employers are reaching out to them. They feel that salaries of hiring organisations are lower than they should be and certainly not high enough to prompt a move from an employer they feel used to and comfortable (if not delighted) with.
Those employers wanting to recruit right now have to realise the sense of comfort and convenience (less so true engagement) that their would-be hires feel and shape their value proposition messaging, channel selection and financial offer accordingly.
Getting to the heart of your employee mindset 