You want absolute clarity about the current jobs market?
Nah, not going to happen.
It’s pretty easy to take a quick look at some of the key relevant indicators and end up feeling rather queasy. The Purchasing Managers Index (PMI) for the services sector – some 75% of the entire economy, fell for the fourth month in succession to 47.9. Any figure below 50 indicates an economy in retreat. Equally unlikely to prompt a hearty laugh was research from APSCo which suggested a 24% decline in vacancies in London between Q1 and Q2 this year. Yes, 24%.
However…
Look elsewhere and the picture feels somewhat different. Research from REC earlier this month suggests that employers ran active ads for 2.25m jobs in the week to July 9. A figure up 53% on the equivalent month in 2022. Different research from the same source suggests that UK employers’ confidence in their hiring decisions strengthened in their most recent reading, between April and June this year. There was a net balance of +7 of those optimistic businesses over those with more negative sentiment.
Hope that clears things up.
The other noteworthy stats over this period reported earlier this week from Broadbean indicated that applications for UK jobs declined by a huge 30% in June compared to the previous month. There were 2% fewer vacancies but there are clearly other factors influencing such a huge decline. Firms too, according to REC, were also forced to leave jobs open for longer periods.
Is this the start of the usually quieter summer period or are potential candidates increasingly concerned about the economic outlook and wary about making a potentially risky career move?
What’s perhaps clearer is the sense of pressure on many TA and EB professionals. On a daily basis, the green Open to Work icons are appearing on LinkedIn. This does not feel like an easy market for the industry. And yet we’ve been here before. Every recession in living memory – the Lawson one of 1990, the dot com crash of 2000, the global financial crash of 2007-08, the pandemic, as well as the one we currently find ourselves in – have provoked redundancies within the sector and its supporting industries.
“I’ve been through all the financial downturns this article mentions. Unfortunately, nothing has changed. TA & EB teams ultimately have to drag the organisation out of it, once they get their jobs back. And the cycle starts again, albeit at a lower starting base. When will senior financial stakeholders realise the reputational and talent (read financial) damage. We, as an industry, have to be better about making our own case”, Andy Hendon, Global EB Consultant (Formerly of Syneos Health & KPMG).
There’s plenty of talk that this will be a shallow recession – if it is one, technically, at all – and that Q4 should see some form of both economic and employment recovery. But what can TA and EB professionals do in order to make sure that, come the next downturn, they are not facing a similar fate?
How can the profession create more resilience?
Here’s some thoughts, certainly not exhaustive.
Outline to senior stakeholders the employer brand reputational damage associated with making short term, hasty headcount decisions. It’s not hard to remember which organisations behaved in an exemplary fashion during Covid, and which ones did anything but. The same point exists here. If 2024 does prove to be a year of economic and employment resurgence, then what are the implications of making redundancy headlines now, particularly amongst the TA and EB community?
“We are already seeing TA teams being let go as recruitment freezes are in play for some organisations. Without doubt, they will all have to be rehired in a year or so when the inevitable uplift happens. As a volume employer, we have seen retention vastly improve, which in part is down to the investment we have made in our people but furthermore due to colleagues looking for more stability in uncertain times. Gen Y and even Gen Z, who struggled so much in Covid, are now of working age and I expect they want to feel their feet on solid ground for a little while.
Applications for us have been falling month on month and whilst some of it is seasonal, the reality is that people are sticking with what they know. So, whilst we have seen a large reduction in vacancies, candidates are much more difficult to attract which means there should be greater emphasis on employer brand and talent attraction and certainly not less.
Again, we need to make the case internally that recruitment challenges do not simply go away when the economy struggles, they just evolve,” Adele Swift, Talent and Attraction Manager, Toolstation.
(A study by Charlie Trevor of the University of Wisconsin–Madison and Anthony Nyberg of the University of South Carolina found that downsizing a workforce by 1% leads to a 31% increase in voluntary turnover in the next year).
“At the back end of 2022, organisations were keen to contain costs as they slammed the brakes on their hiring. Some teams then went on to cull their internal teams to reduce costs further, even though all of their hiring data suggested that was not the right thing. As we head into September, we’re getting more inbound enquiries asking how our model might work for a Q4 ramp-up, ahead of hiring back their own team in Q1/Q2 2024.
How does the profession make a stronger case for itself when things go south in the future? By proactively outlining a strengthening labour market and making plans now as to how to address this. Get ahead of things, don’t wait”, Martin Dangerfield, CEO, immersive
What has your investment in EVP and EB delivered over the course of the last year? what money have you saved through direct hiring over third party use? The work you’ve done on your candidate experience, what difference has that made to your talent pipeline and what money has been saved as a result? The employee experience, how has that impacted retention? And even employee referrals? But don’t tell me, show me the spreadsheet.
“I believe we can safely say that EB is here to stay and being embraced by organisations across the globe. Your EB has an intrinsic value – just as a corporate brand does – which will be damaged by headcount cutting. We don’t make this point nearly loud enough” Andy Hendon, Global EB Consultant (Formerly of Syneos Health & KPMG).
One of the many key learnings from both the financial crash of 2007-08 and the pandemic was the relatively speedy return to hiring. Many organisations made swingeing headcount cuts, including across the TA community, only to find themselves needing to hire again rather quickly. Doing this with either no TA team or an extremely depleted and de-motivated one is not a recipe for success.
Make the point very clearly that leaving recruiting to non-recruitment specialists, in the event of the TA team being decimated, creates real vulnerability, reputational damage and potential litigation. This is a highly specialised and nuanced field, in which mistakes relating to diversity, inclusion and bias are all too easy to make.
Making redundancies is simply too late now. Harvard Business Review makes the case that redundancies should be made quickly, in the sight of declining economic activity, so that appropriate planning can be made. At the fag end of a flat economy is too late. And if we’re being super cynical, it’s easier to remember which organisations made the more recent cuts, rather than those who did so several months ago.
“It’s been a bit of a roller coaster in terms of employer brand and EVP work for us this year, with real fluctuations in terms of activity. Q3 has certainly felt quieter, with projects being delayed and even cancelled. The talent attraction challenges our clients face are still there and, indeed, escalating, but short-term budget reductions over the longer-term employer brand creative development are not seen as their priority! And this is the crux of the challenge the industry faces. Branding, employer or otherwise, is a long-term strategic investment, not a tap to be turned on and off.” Mike Heal, Managing Director, WDAD Communications.
What have been the big successes in terms of hiring this year? What have those people you and your team have brought on board added to the business? What products, services and innovations have these people delivered? Consider your key talent rivals, are you net up on hiring from those organisations, compared to losing employees in the opposite direction?
“Despite the partnerships that EB should create, it can feel as though Brand, Marketing & Communications teams are seemingly more immune to difficult market conditions than TA & EB teams? History tells us these latter teams are targeted first to reduce costs. Which begs the question, does the company brand/services differentiate the organisation or is that down to the people that provide them and the skills they deploy? Surely, it’s difficult for a business to plan ahead without a talent pipeline and a blinkered view to future employer reputation?” Andy Hendon, Global EB Consultant (Formerly of Syneos Health & KPMG).
Research from the University of Colorado between 1990 and 1998 demonstrated that the negative stock market returns of those firms making cuts was greater than the financial benefits resulting from those redundancies. Those firms downsizing performed more poorly than those avoiding such cuts.
There are so many talent intelligence metrics out there – you’ve already waded through several at the beginning of this blog! We’re still suffering from a sizeable post-Brexit and post-Covid hole in the workforce. Make use of such metrics, build a case which makes it abundantly clear how challenging the market is. Make yourself and your team indispensable.
“This is a good opportunity to make your candidate journey a slick one. How easy is it to apply to you? What experience do candidates come away with? What impression is this experience giving? Still asking for cover letters – maybe in a difficult marketplace, now is the time to stop? Be sympathetic to the market”, Julie Griggs, Director of Reward, People Insights and Performance, The Open University.
Your organisation is likely to have spent time and reputation building and communicating your values. How do such values appear if people are now disappearing at pace? Do they still stand up? Are they still authentic? You could make the same point about your EVP. You’re likely to have invested in this within the last two years – does it continue to feel authentic if suddenly firing takes precedence over hiring?
We’ve touched on previous downturns and recessions. They’re little fun to work through. They engender worry, distraction and even paranoia. But they don’t last forever. Indeed, they are over surprisingly quickly. Take the pandemic. Nothing any of us had previously experienced. Apocalyptic. The end of days. All true, except for the fact that the recruitment market was highly competitive just months after the initial lock down. Make this case. What will it cost you in terms of resourcing costs, internal morale and external reputation if you’re shedding staff in August and seeking to hire in January?
“If you’re not actively recruiting, it’s a good opportunity to turn your focus inward. Focus on the talented colleagues you’ve got and how to retain them. Be cross-functional, work with your reward colleagues on the attractiveness of your benefits – are you shouting about them? Work with your OD colleagues on spotting the colleagues who could be likely successors, support in workforce planning. You can play a key role in ensuring your existing great people remain your existing great people when the job market improves”, Julie Griggs, Director of Reward, People Insights and Performance, The Open University.
I’m sure this happens anyway, but make it very clear how tough hiring is. Although we’re living through an economy apparently clinging on, there are an awful lot of live jobs being advertised. Potential candidates are staying put, waiting out the downturn, not pressing the send button on their applications.
Just some thoughts, some possibly more practical than others, and I’m sure there are plenty of other options out there. Be interested in hearing your own views.
Getting to the heart of your employee mindset 