We are piloting aspects like the Simpsons Diversity Index in our diversity sets, the metric that has been used in ecology for a long term. It would be interesting to see what new insights we can gain on diversity through this model. Such innovation will help you, as our clients, standardize how you analyze the data sets. Such standardization is also critical in transitioning to the concept of Platform Services
In an MIT panel discussion last week, the Global Vice President of Talent at Coca-Cola mentioned that organizing through platform services means organizing through the lens of consumer and consumer for HR is employees. This approach often removes inefficiency and focuses on outcomes. HR wants to strive to make an impact. Establishing Platform Services for location planning, talent intelligence, and reskilling in an integrated way.
A while back, in one of the weekly emails, I wrote about an Adobe intern who transitioned from being a Network Engineer to a patent filing machine learning engineer. This story touched many readers because this not only brings in talent intelligence from an availability standpoint but also points out the ecosystem parameters of what is feasible in a given location. In other words, in 2022 and beyond, we cannot study skills availability in isolation. Understanding these trends will make their conversations with prospective candidates more meaningful for Recruiters. But to get meaningful context and data support to the Recruiters, we need to understand the current market situation in depth.
Here are the trends that are creating uniqueness in the current labor market
- We hear news about layoffs, but the overall leadership mindset is on growth. A PwC survey of 722 global executives found that executives are focussed on growth rather than activities around recession risk
- Finding the right talent continues to be a challenge. Talent acquisition and retention were cited as a serious business risk, second only to cybersecurity
- For the first time in the front-line labor market history, some tangible upskilling effects have been observed (it is now very common to see a restaurant worker upskilled with computer skills and now employed in a medical office). But we have not understood such stories in detail yet
- Candidates are also “boomeranging back” to their old jobs with relatively high frequency. For example, one survey shows that 23% of engineers, 21% of tech workers, and 19% of finance employees are considering returning to a former employer because of concerns that the recession will impact their current employer. (the numbers may change depending on the survey design, but the overall sentiment is an uptick in Boomerang sentiment)
- Structural issues like an aging and retiring workforce, unstable and expensive child care, and low birth rates mean fewer people are in the workforce, to begin with — something that can’t be corrected quickly. So layoffs as an instrument to course correct may not be a viable option, as per many thought leaders. As companies, we have to develop aging workforce simulations to study the impact of such layoffs deeply
- In Germany, many employees laid off by Siemens have become a very effective Freelance labor force. This trend is very interesting, and Germany is one of the fastest-growing Freelancer ecosystems. Designing a freelance ecosystem may be a more useful cost optimization strategy than a layoff
- When we inquired about the job postings in our database for this quarter, about 6% of the jobs posted still offer sign-on bonuses indicating a difficult-to-hire job market
Here are the challenges facing the Recruiters and how they need to get ready for the talent war
- VC firm, OpenView, suggests that companies looking to hire at this time should be ready and willing to answer candidate questions around cash flow, runway, budget, and other finance-related topics. Showing candidates your finances are in good shape can give them the confidence they need to accept your offer and check one more job off your list. The hiring backlog may last longer than you think as more folks opt to take remote-only jobs or leave the workforce altogether. This applies not only to startups but also to large enterprises. It may be good for Recruiters to read up on these trends (public data/private data)
- Bhushan Sethi from the NYU Stern School of Business recommends leaning into growth amid uncertainty. “Focusing on your growth agenda will be key to competing,” he said. “Pay close attention to the changes and trends that may impact your business, and assess which ones you can plan for. Analyze your strategic workforce needs to understand the skills and capabilities required today and those needed to execute your company’s future strategic initiatives. (this may be an activity between Workforce Planners and Recruiters have a joint session, and we can be the moderator)
- The more traditional industries are still trying to keep up with the rapid pace of technological change and still need talent. If you observe, only the native tech companies have triggered the layoffs, and this aspect may work in your favor, depending on your company
- No two companies are the same, even within an industry segment. Take, for example, Home Depot and Lowes. Home Depot has a very different contract community and market share compared to Lowes. The digital transformation pace is also very different. A recruiter should understand these nuances
- Macro AI and Data Trends are important even if you are a non-tech recruiter. Data and AI dominate all roles, from Recommendation Engine to Crypto to Generative AI. It will be important to understand these trends within the context of the roles you hire
- Supply Chain, Certain Job families in Finance, Cybersecurity, and Data Analytics, and several job families are not really impacted by the slowdown. Getting a sense of Job family specific slowdown may help educate the candidates
- Educating ourselves and educating candidates should be the primary areas of focus in the current labor market scenario
- The narrative should still be focused on development, highlighting aspects of ongoing educational assistance and reskilling opportunities.
We are actively at work to enable this. We plan to provide you with a detailed end-of-the-year labor market trends report. We are doing some cross-sectional analysis across the locations. The key difference will be giving more strategic commentary, not just the datasets. Here is a snapshot of the type of analysis you can expect. (Still a draft, so narratives may change with more data)